2020 IL App (1st) 180994
Ill. App. Ct.2020Background
- Subject: a 245-bed skilled nursing facility in Chicago (built 1973); Central Nursing bought the going concern in 2009 for $25M and the parties reported $7.5M allocated to real estate.
- 2011 Cook County assessment implied fair market value (FMV) of $8,229,416; Central Nursing appealed for reduced assessment to the Board of Review and then the Property Tax Appeal Board (PTAB).
- Central Nursing offered multiple valuation theories (transfer-declaration allocation, an ‘‘Economic Approach’’ using stabilized income, Medicaid-capitalization, and an appraisal by Korth ~ $5.3–$5.4M); Central Nursing also argued inequitable assessment vs. comparables.
- Chicago Board of Education submitted Dost’s appraisal (FMV ~$10.5M) and the Board of Review submitted sales/comparable data; Korth, Dost, and a rebuttal reviewer (Braemer) testified at hearing.
- PTAB weighed the appraisals (favored parts of Dost and MVS guidelines, excluded entrepreneurial incentive), set FMV at $7,830,036 (assessed value $1,957,509), and found no inequitable assessment; Central Nursing sought appellate review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PTAB ignored/failed to consider Central Nursing’s inequity (uniformity) claim | Central Nursing: PTAB disregarded or failed to meaningfully consider equity evidence and updated submissions | PTAB/Respondents: PTAB considered submissions, explained discrepancies and weighed updated data; plaintiff bore burden to prove inequity by clear-and-convincing evidence | Court: PTAB considered the claim and evidence, no prejudice shown; affirmed PTAB’s rejection of inequity claim |
| Whether PTAB’s FMV determination was against manifest weight of evidence | Central Nursing: FMV overstated; Korth appraisal and other evidence support a lower value | PTAB/Respondents: PTAB reasonably evaluated competing appraisals, adopted credible parts, followed MVS guidance, reached intermediate FMV | Court: PTAB’s factual valuation not against manifest weight; affirmed |
| Whether transfer-declaration allocation ($7.5M to real estate) required weight | Central Nursing: allocation from the 2009 sale establishes lower real estate value | PTAB/Respondents: allocation unexplained and was not prepared by an appraiser; insufficient basis to accept | Court: PTAB permissibly gave no weight to the transfer declaration; affirmed |
| Whether PTAB improperly relied on parts of Dost’s appraisal after rejecting other parts | Central Nursing: PTAB impermissibly cherry-picked Dost | PTAB/Respondents: PTAB may accept or reject portions of competing expert opinions and synthesize a value | Court: It was proper for PTAB to credit parts of competing reports and craft a value; affirmed |
Key Cases Cited
- Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill. 2d 428 (1970) (fair cash value is based on property’s capacity to earn income).
- Walsh v. Property Tax Appeal Board, 181 Ill. 2d 228 (1998) (party challenging uniformity must prove disparity by clear and convincing evidence).
- Cook County Board of Review v. Property Tax Appeal Board, 403 Ill. App. 3d 139 (2010) (PTAB factual findings are prima facie true; manifest-weight standard governs reversal).
- Kankakee County Board of Review v. Property Tax Appeal Board, 337 Ill. App. 3d 1070 (2003) (transfer-declaration allocations may be discounted if unexplained).
- Du Page County Board of Review v. Property Tax Appeal Board, 284 Ill. App. 3d 649 (1996) (whether comparables prove uniform assessment is a question of fact).
- McCleary v. Board of Fire & Police Commissioners of the City of Woodstock, 251 Ill. App. 3d 988 (1993) (administrative errors do not require reversal absent demonstrated prejudice).