Kraft Foods, Inc. v. Illinois Property Tax Appeal Board
2013 IL App (2d) 121031
Ill. App. Ct.2013Background
- Kraft Foods, Inc. leased a large industrial warehouse in Aurora Township, Kane County under a 10-year build-to-suit, triple-net lease beginning March 8, 2003, with two 10-year renewal options.
- In 2006 Kraft’s property sold in bulk for $62,858,000 ($73.07 per building square foot) without indicating market value allocation.
- For tax year 2007, Kane County Board of Review assessed the property at $13,679,281 (~$41,103,609 market value); Kraft challenged the assessment to PTAB.
- The PTAB, after hearing, concluded a fair market value of $40,000,000 as of January 1, 2007, incorporating three approaches with sales comparison given the most weight.
- Kraft presented McCormick (value ~$30,000,000) and Aurora’s Gibbons (value ~$43.3–$43.7 million); Kraft opposed using leased-fee bulk-sale comparables and adjustments.
- PTAB ultimately relied on Gibbons’ Aurora comparables, discounting some non-Aurora or bulk-sale comparables, and found the subject property equal to a unit value of $46 per sf, including land, yielding ~$39.6 million.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PTAB validly weighed valuation methods and evidence | Kraft argues PTAB relied on improper comparables and created its own value by mixing analyses. | Aurora contends PTAB properly weighed three approaches, with sales comparison given most weight. | PTAB's method weighting affirmed; not against manifest weight. |
| Use of leased-fee bulk-sale comparables in market value | PTAB erred by relying on leased-fee bulk-sale sales not reflecting fee-simple market value. | Gibbons’ comparables included; such sales can reflect market value depending on context and weight. | PTAB properly considered such comparables within overall evaluation; not error. |
| Geographic scope of comparables (Aurora vs outsideAurora) | Three outside-Aurora comparables should be weighted as market-wide for large warehouses. | PTAB appropriately gave less weight to distant comparables and favored Aurora properties. | Not against manifest weight; PTAB validly emphasized Aurora comparables. |
| Whether the PTAB erred by excluding certain comparables | Excluded McCormick’s comparables outside Aurora should be considered; unrebutted market-market testimony should guide weight. | PTAB may credit conflicting appraisals; not required to accept all unrebutted testimony. | PTAB’s exclusions/weights supported; not manifestly erroneous. |
| Overall sufficiency of evidence supporting value conclusion | PTAB made inconsistent weighting and failed to reflect market value for fee-simple property. | Substantial competent evidence supported PTAB’s sale-based valuation. | PTAB's determination of $40,000,000 value affirmed. |
Key Cases Cited
- Chrysler Corp. v. Illinois Property Tax Appeal Board, 69 Ill. App. 3d 207 (1979) (standard of review for administrative valuation decisions)
- Walsh v. Property Tax Appeal Board, 181 Ill. 2d 228 (1998) (fair cash value defined; arm's-length transaction as best evidence)
- Cook County Bd. of Review v. Property Tax Appeal Bd., 384 Ill. App. 3d 472 (2008) (sales comparison emphasis where market data available)
- Omni v. Property Tax Appeal Bd., 384 Ill. App. 3d 472 (2008) (sales comparison approach as central method; market data required)
- AT&T Corp. v. Property Tax Appeal Board, 337 Ill. App. 3d 735 (2003) (weighing multiple appraisals; credibility not tethered to unrebutted testimony)
- Armstrong v. Property Tax Appeal Bd., 2012 IL App (3d) 110045 (2012) (uniqueness of subject property affects comparables and market scope)
- Byer Clinic & Chiropractic, Ltd. v. State Farm Fire & Casualty Co., 2013 IL App (1st) 113038 (2013) (credibility and weight of competing appraisals; deference to PTAB)