EVANSTON, Ill. — The City of Evanston got a major wakeup call in the past couple of months. When commercial property owners there opened up their assessed property valuations, there was something in the envelope they weren’t expecting — some of their valuations had doubled, even tripled.
Evanston was just one of the first cities in Cook County to get its assessed valuations in the mail. The reality is: Everyone in Cook County should take a listen, because your turn is coming.
Some small business owners may fear these valuations could close their doors because the numbers will ultimately dictate their property taxes. All the signs point to a major increase. The numbers in some places leave them speechless, in other cases, with plenty to say.
For 40 years Terry Straker has owned Guitar Works LTD in Evanston. His life and livelihood was built on music, but when he opened a letter from the Cook County Assessor recently, he said everyone probably heard him scream six blocks away.
Across the street, Shaun Chinsky owns Good’s Fine Picture Framing. The business has been in his family for 70 years. He’s still shocked, and preoccupied by what these valuations could mean for his commercial property taxes as well.
“There are people who have told me they don’t think they can survive this sort of increase,” Chinsky said.
The Virag family has owned a Main Street jewelry store for three generations.
The Cook County Assessor slammed these three small businesses along Evanston’s landmark Main Street with valuations they can hardly stomach. It’s all part of the righting of the ship, the new assessor says has been on the wrong path for so long under former Cook County Assessor Joseph Berrios.
This year, Good’s Picture Framing saw its assessed valuation go up by more than 200%. Guitar Works assessment went up roughly 230%. Virag Jewelers is still reeling after learning the assessment of its property went up by over 320%.
Fritz Kaegi is the Cook County Assessor who inherited a messed up tax system in Cook County.
“People are confused, and shame on us in government for not having done a good job in being transparent in how the system works,” he said.
He is trying to fix the problem and the fix doesn’t come without some pain. He said in order to set cap rates and make financial assumptions, he relies on third-party data for some business. Largely, he’s referring to the little guys, like Guitar World, who are forced to appeal their assessments year after year.
“We want to get the number right the first time in the commercial assessment process and we’re in a pretty good position to do that on larger properties, but we don’t have very good data for the smaller properties,” Kaegi said.
SB 1379, the data modernization bill before the general assembly right now, would help the assessor gather better data and in turn provide a more realistic picture when it comes to commercial property taxes.
“For property owners where we got it wrong, they should appeal and bring it to our attention. That’s why the appeal process exists,” Kaegi said.
However, appealing takes time and costs money. This this year, it’s the northern suburbs. Next year the southern suburbs. In 2021 Chicago property will get its assessed valuations and potentially the same wake up call for commercial businesses there who haven’t been paying their fair share — whether they knew it or not.
Now, tax payers are struggling to understand it.
“The tax rate is going to go from 9% to 5.6%, so for an average property whose assessed value increased 100%, actual tax paid will rise in the neighborhood of 20%,” Kaegi said.
In this example, commercial property taxes will go up around 20%. That means for the picture framer whose assessed value went up more than 200%, he’s looking at a potential 40% tax increase.
“You can call it a new calculation. We’re doing the same thing that assessor’s offices do in the rest of the United States. It just seems new here,” Kaegi said.
It’s little consolation to the little guys just trying to keep their doors open after all these years of doing business in Cook County.
“I have 10 employees, all of whom I like enormously, some have been there a minimum of eight to 10 years. Others 20 to 30 years and I can’t throw them out on the street,” Straker said.
There is one bright spot: Residential property owners might come out ahead in this situation. Because commercial property is such a big part of the assessed value in Evanston, residents there are expected to see their taxes decline.