Cook County Board of Review v. Property Tax Appeal Board ( 2010 )


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  •                                                       FIFTH DIVISION
    July 30, 2010
    No. 1-08-2060
    THE COOK COUNTY BOARD OF REVIEW,        )   Petition for Review of an
    )   Order of the Illinois
    Petitioner,                        )   Property Tax Appeal Board.
    )
    v.                          )
    )
    THE PROPERTY TAX APPEAL                 )
    BOARD, an Administrative Agency,        )
    and CRESTWOOD CONDOMINIUM               )
    ASSOCIATION, Taxpayer,                  )
    )
    Respondents.                       )
    JUSTICE HOWSE delivered the opinion of the court:
    Following a hearing, the Illinois Property Tax Appeal Board
    (PTAB) issued a decision modifying the assessed value of the
    properties at issue for 2004 and 2005.      The Cook County Board of
    Review (Board) petitioned for review of the PTAB’s order.     On
    appeal, the Board contends: (1) the PTAB erred as a matter of law
    in holding the Crestwood Condominium Association (Crestwood)
    proved a violation of uniformity by clear and convincing
    evidence; (2) the PTAB erred as a matter of law by setting
    assessments that are not equitable or supported by the evidence;
    and (3) the PTAB’s findings were against the manifest weight of
    the evidence.    For the following reasons, we affirm the PTAB’s
    decision.
    FACTS
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    Crestwood is a 30-year-old residential community located in
    Des Plaines, Illinois.   The Crestwood property consists of 154
    buildings, each of which has the same floor plan layout and
    square footage.    One hundred and fifty-two of the buildings are
    configured identically, each being divided into three 2-bedroom
    units, two large one-bedroom units and a smaller one-bedroom
    unit.   The remaining two buildings are each divided into two 2-
    bedroom units and four larger one-bedroom units.     When they were
    developed, all 154 buildings received an individual property
    identification number (PIN).
    In 2002, 12 of the 154 buildings were legally subdivided
    into 72 individual dwelling units.     In 2004, 12 additional
    buildings out of the remaining 142 buildings were subdivided into
    72 individual dwelling units.   Each individual unit received its
    own separate PIN for property tax assessment purposes.
    For the year 2003, all of the buildings were assessed the
    same, at $36,879 a piece.   As of January 1, 2004, the subdivided
    individual units were assessed at $6,959, $6,185, $5,670, or
    $5,669, depending on their size, for an average of $37,628 per
    subdivided building.   The remaining unsubdivided buildings
    received total assessments of $55,350, or an average of $9,225
    per living unit.   Two exceptions applied to the assessments:
    first, the county valued one entire unsubdivided building at
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    $37,637; second, the county valued some of the other subdivided
    buildings at $55,343 per building.     The assessments remained the
    same in 2005.
    Crestwood appealed the 2004 and 2005 assessments to the
    PTAB.   In its briefs in support of the appeals and in its summary
    judgment motions, Crestwood alleged all of the buildings in the
    development were substantially similar, and the fact that 13 of
    the 154 buildings were assessed lower violated the Illinois
    Constitution’s requirement that property tax assessments be
    uniform.    Crestwood alleged the county assessor and the board of
    review allowed for the disparate treatment in the assessment of
    the various buildings in the development based on whether or not
    the buildings were subdivided into individual condominium units.
    Crestwood requested that the assessed values of the 141 buildings
    assessed at $55,350 be reduced to the same assessment as the 13
    buildings assessed at $37,628.
    The Board submitted its “Board of Review Notes on Appeal,”
    wherein the subject properties’ 2004 and 2005 final total
    assessments were disclosed.   The assessment summary noted 124
    buildings were assessed at $55,350; 1 building was assessed at
    $37,637; 11 individual condominium units were assessed at $5,670;
    10 individual condominium units were assessed at $5,669; 22
    individual condominium units were assessed at $6,959; and 22
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    individual condominium units were assessed at $6,185.    The
    Board’s representative presented an analysis prepared by the
    Board outlining the properties’ market values before and after
    being subdivided.    A summary of the sales of the properties’
    subdivided individual units was also submitted by the Board.
    According to the Board’s evidence, the average selling price for
    the six individual condominium units in each of the subdivided
    buildings indicated the aggregate value of the subdivided
    buildings averaged $697,500 in 2004 and 2005.    All of the
    unsubdivided buildings and individual units in the subdivided
    buildings were classified as 299 condominiums, the only
    recognized class of condominiums in Cook County.
    During the hearing before a PTAB hearing officer, Crestwood
    called Sandra Hannon, Crestwood’s property manager.    Hannon
    testified there is no difference in the overall square footage in
    the buildings or the units.    She said the six-unit buildings were
    selling for between $550,000 and $575,000 during 2004 and 2005.
    Individual units sold for an average of $110,000.    Hannon
    testified the monthly assessment and percentage of common
    ownership in the condominium community (.64935%) were the same
    for each building.    Hannon said the tax increases had caused a
    lot of the unsubdivided building owners a “great financial
    hardship.”
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    The hearing officer then questioned the Board’s
    representative at the hearing, Matt Panush.     When asked why the
    County had two sets of assessments for the buildings, Panush
    explained:
    “It seems that out of the 154 buildings,
    according to, you know –- there are six
    buildings that are assessed at this lower
    number.   *** And that leaves us with 148 of
    the buildings being uniform.   So for some
    reason –- And most of the time we sit here,
    and of the many condo units, there’s one that
    seems to have been, you know, misunderstood
    or misclassified or misassessed.   It would
    seem here that the majority of these
    buildings –- of these six-unit buildings –-
    are correct in their assessment and that we
    do not have a problem with the four.   I
    cannot tell you why they have the $37,000.
    *** I’m not sure why the assessor chose to
    put the number at $37,000, but I do know that
    a majority –- 148 or of the 154 –- are
    uniform in this complex and I think, you
    know, that’s –- that is what we are –- we
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    strongly stress here in this case.”
    Panush further explained that the Board believed 96% of the
    development was currently correct or assessed fairly, “and
    somehow 4 percent of this entire development is somehow
    incorrect.”    Panush specifically stressed, however, that the
    Board was not asking the PTAB to increase the assessments on the
    other 4% of the buildings to make the whole development uniform.
    Crestwood’s counsel responded to Panush’s answer to the
    hearing officer’s question by noting:
    “It is clearly not a mistake because they’ve
    continued it.   There were assessment appeals
    filed advising the assessor of what we
    believed to be a lack of uniformity.   The
    assessment relief was denied.   *** This is
    ongoing.   Every time a unit is sold the
    assessors reduce the assessment.   This didn’t
    just happen in 2004, it happened in 2005 as
    well.   So every time a building was converted
    and sold as individual condos, the assessor’s
    pattern and practice has been to reduce the
    assessments to this $37,000 level.”
    On August 12, 2009, the PTAB issued a modified decision
    finding a reduction in the assessment of the property at issue
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    was warranted based on the facts and exhibits presented.
    Specifically, the PTAB found the record was clear that “an
    inequity exists in the assessment process between the subject’s
    subdivided and un-subdivided buildings.”   The PTAB noted the
    evidence demonstrated that although the buildings had the same
    physical characteristics and percentage of ownership in the
    common elements, the assessments of the buildings differed
    depending on whether or not the buildings had been subdivided
    into individual units.   The PTAB found there was “no market data
    demonstrating that the buildings had differing overall values
    depending on whether or not the buildings had been subdivided.”
    Without such market data, the PTAB found there was no basis for
    assessing the similar buildings differently.   The PTAB found
    Crestwood had “adequately demonstrated that the subject was
    inequitably assessed by clear and convincing evidence and
    reductions are warranted for 2004 and 2005.”
    The Board appeals the PTAB’s decision.
    ANALYSIS
    Our review of a PTAB decision is governed by the
    Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2008)).
    35 ILCS 200/16-195 (West 2008); Cook County Board of Review v.
    Property Tax Appeal Board, 
    395 Ill. App. 3d 776
    , 784, 
    918 N.E.2d 1174
     (2009).   Our scope of review extends to “all questions of
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    law and fact presented by the entire record.”   735 ILCS 5/3-110
    (West 2008).    The PTAB’s findings and conclusions on questions of
    fact “shall be held to be prima facie true and correct.”     735
    ILCS 5/3-110 (West 2008); Cook County Board of Review, 395 Ill.
    App. 3d at 784.   We will not reweigh the evidence or substitute
    our judgment for that of the administrative agency.   Cinkus v.
    Village of Stickney Municipal Officers Electoral Board, 
    228 Ill. 2d 200
    , 210, 
    886 N.E.2d 1011
     (2008).   Accordingly, we will not
    reverse the PTAB’s factual findings unless they are against the
    manifest weight of the evidence, meaning an opposite conclusion
    is clearly evident.   Cook County Board of Review, 395 Ill. App.
    3d at 784, citing Cinkus, 
    228 Ill. 2d at 210
    .   The PTAB’s
    determination on a question of law, however, is not binding on
    us, “rendering our review ‘independent and not deferential.’ ”
    Cook County Board of Review, 395 Ill. App. 3d at 784, quoting
    Cinkus, 
    228 Ill. 2d at 210
    .
    I. Standard of Review
    Initially, the parties disagree as to what standard of
    review should apply to the PTAB’s decision on appeal.
    Administrative review proceedings present three types of
    questions: those of fact, those of law, and mixed questions of
    fact and law.   Cook County Board of Review, 395 Ill. App. 3d at
    784, citing Cook County Republican Party v. Illinois State Board
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    of Elections, 
    232 Ill. 2d 231
    , 243, 
    902 N.E.2d 652
     (2009).
    Factual determinations should only be reversed if they are
    against the manifest weight of the evidence.   Republican Party,
    
    232 Ill. 2d at 243
    .   A de novo standard of review applies to an
    agency’s determination of a question of law.   Republican Party,
    
    232 Ill. 2d at 243
    .   Lastly, mixed questions of law and fact will
    only be reversed if the agency’s decision is “clearly erroneous.”
    Republican Party, 
    232 Ill. 2d at 243-44
    .
    The Board contends the PTAB erred as a matter of law when it
    held Crestwood proved a violation of uniformity, necessitating a
    de novo review.   The Board also contends the PTAB erred as a
    matter of law by setting assessments that are not equitable or
    supported by the evidence.   The Board further contends, however,
    that the PTAB’s findings were against the manifest weight of the
    evidence.   Both the PTAB and Crestwood counter that no question
    of law is presented here, and, therefore, the proper standard of
    review is the manifest weight of the evidence standard.   We agree
    with Crestwood and the PTAB.
    A review of the record and briefs submitted by the Board
    indicates the PTAB did not address a question of law in reaching
    its decision.   Instead, the PTAB’s decision was based solely on a
    factual determination that the assessments at issue here lacked
    uniformity.   Therefore, we review the PTAB’s factual
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    determinations and ultimate conclusion using the manifest weight
    of the evidence standard.    See Cook County Board of Review, 395
    Ill. App. 3d at 785, citing Cinkus, 
    228 Ill. 2d at 210
    .
    II. PTAB’s Decision
    The Board contends the PTAB’s findings were against the
    manifest weight of the evidence.        Specifically, the Board
    contends the “uncontested and uncontroverted” evidence in the
    record established the parcels subject to the PTAB’s reduction
    were uniformly assessed and valued at their fair market value.
    Contrary to several of the superfluous arguments the Board
    raises on appeal, the only issue properly pending before the PTAB
    was Crestwood’s claim that 141 unsubdivided buildings in the
    Crestwood development were assessed at $55,350 and 13 almost
    identical subdivided buildings were assessed at $37,628, in
    violation of the property tax uniformity provision in the
    Illinois Constitution.
    Matt Panush, the Board’s representative at the hearing,
    specifically stressed the Board was not asking the PTAB to
    increase the assessments on the other 4% of the buildings to make
    the whole development uniform.    Instead, the Board’s sole
    argument before the PTAB was that the 13 “misclassified or
    misassessed” buildings should not impact the other 141 buildings
    that were fairly assessed.   Panush was unable to offer a reason
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    to explain the differences in the assessments.   To the extent the
    Board now attempts to raise other arguments to support the
    difference in assessments for the first time in this appeal, we
    find those arguments are waived and need not be considered here.
    See Cook County Board of Review, 395 Ill. App. 3d at 786 (“We
    recognize that arguments or objections that are not made during
    the course of the administrative hearing process but instead are
    raised for the first time on review are deemed waived”).
    The Illinois property tax scheme is grounded in article IX
    of the Illinois Constitution of 1970, which provides in pertinent
    part that real estate taxes “shall be levied uniformly by
    valuation ascertained as the General Assembly shall provide by
    law.”   Ill. Const. 1970, art, IX, §4(a); Walsh v. Property Tax
    Appeal Board, 
    181 Ill. 2d 228
    , 234, 
    692 N.E.2d 260
     (1998).
    Because uniformity requires equality in the burden of taxation,
    taxing officials may not value the same kinds of properties
    within the same taxing boundary at different proportions of their
    true value.   Walsh, 
    181 Ill. 2d at 234
    , citing Kankakee County
    Board of Review v. Property Tax Appeal Board, 
    131 Ill. 2d 1
    , 20,
    
    544 N.E.2d 762
     (1989).   The constitutional provision does not
    call for mathematical equality, however.   Apex Motor Fuel Co. v.
    Barrett, 
    20 Ill. 2d 395
    , 401, 
    169 N.E.2d 769
     (1960).   “The
    requirement is satisfied if the intent is evident to adjust the
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    burden with a reasonable degree of uniformity and if such is the
    effect of the statute in its general operation.     A practical
    uniformity, rather than an absolute one, is the test.”     Apex
    Motor Fuel Co., 
    20 Ill. 2d at 401
    .
    “The party objecting to an assessment on lack of uniformity
    grounds bears the burden of proving the disparity by clear and
    convincing evidence.”    Walsh, 
    181 Ill. 2d at 234
    ; Cook County
    Board of Review v. Property Tax Appeal Board, 
    345 Ill. App. 3d 539
    , 543,, 
    803 N.E.2d 55
     (2003), citing 86 Ill. Adm. Code
    §1910.63(b), amended at 
    24 Ill. Reg. 1233
    , 1247, eff. January 5,
    2000 (“Under the burden of going forward, the contesting party
    must provide substantive, documentary evidence or legal argument
    sufficient to challenge the correctness of the assessment of the
    subject property”).    The PTAB’s rules provide:
    “Proof of unequal treatment in the
    assessment process should consist of
    documentation of the assessments for the
    assessment year in question for the subject
    property and of the suggested comparable
    properties, and documentation of the
    similarity, proximity and lack of
    distinguishing characteristics of the
    assessment comparables to the subject
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    property.”   86 Ill. Adm. Code §1910.65(b)
    (1996).   See Du Page County Board of Review
    v. Property Tax Appeal Board, 
    284 Ill. App. 3d 649
    , 654-55, 
    672 N.E.2d 1309
     (1996).
    “[T]he critical consideration is not the number of allegedly
    similar properties, but whether they are in fact ‘comparable’ to
    the subject property.”     Du Page County Board of Review, 
    284 Ill. App. 3d at 655
    , citing Kankakee County Board of Review, 
    131 Ill. 2d at 22
    .
    Here, the PTAB found the evidence demonstrated that even
    though each of the buildings had the same physical
    characteristics and the same percentage of ownership in the
    common elements of the development, the assessments of the
    buildings differed depending on whether or not there had been a
    further subdivision of the buildings into individual units.
    Accordingly, the PTAB found Crestwood had adequately demonstrated
    the subject property was inequitably assessed by clear and
    convincing evidence.     We find the record before us clearly
    supports the PTAB’s finding of a lack of uniformity, and the
    Board has failed to establish the PTAB’s ruling was against the
    manifest weight of the evidence.
    Hannon, Crestwood’s property manager, specifically testified
    at the hearing that there is no difference in the overall square
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    footage in the buildings or the units between the subdivided and
    unsubdivided buildings.   Hannon also testified the monthly
    community assessment and percentage of ownership in the
    community’s common elements were the same for each building,
    regardless of whether it had been divided or not.
    Notwithstanding, the Board contends the PTAB erred in
    reassessing the higher-valued properties to be in line with the
    lower-valued assessments because “[t]he overwhelming majority of
    the buildings in this development were assessed uniformly.”     The
    Board made a similar argument before the PTAB hearing officer.
    Although the County’s representative, Matt Panush, could not
    explain why 4% of the buildings had been misclassified or
    misassessed, he argued to the PTAB that the assessor’s mistake in
    assessing the 13 buildings at a lower assessment did not justify
    lowering the assessments on the 96% that had been assessed
    fairly.   Panush admitted in his opening comments to the hearing
    officer that all 154 buildings were “pretty much identical.”
    Panush offered absolutely no explanation during the hearing for
    why the alleged “mistake” in assessing the subdivided buildings
    at a lower rate had occurred.   Panush argued the assessments
    imposed on the 142 units were justified under the market value of
    the buildings.   Panush also stressed the Board was not seeking to
    reassess the 13 subdivided buildings at the higher rate.
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    Crestwood’s counsel responded to Panush’s argument by noting
    the lower assessments for the subdivided buildings were still
    ongoing and clearly not a mistake.       Crestwood noted the
    individual units when totaled up sold for an average of $697,000
    per subdivided building, which was more than the buildings sold
    for as individual buildings.     Crestwood argued that,
    nevertheless, the assessor saw fit to actually reduce the
    assessment on the subdivided individual units rather than
    increase it.     Crestwood also noted the assessors reduced the
    assessment every time a building was sold and converted into
    individual condos, even after the Board was made aware of the
    lack of uniformity between the assessments.
    Based on the totality of the evidence presented, we find
    Crestwood proved by clear and convincing evidence a lack of
    uniformity between the assessments imposed on the almost
    identical buildings.     Accordingly, we cannot say PTAB’s findings
    in this case were against the manifest weight of the evidence.
    CONCLUSION
    We affirm the PTAB’s decision.
    Affirmed.
    TOOMIN, P.J., and LAVIN, J., concur.
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    REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
    (Front Sheet to be Attached to Each Case)
    Please use               THE COOK COUNTY BOARD OF REVIEW,
    following form:
    Petitioner,
    Complete                       v.
    TITLE
    of Case                 THE PROPERTY TAX APPEAL BOARD, an Administrator
    Agency, and CRESTWOOD CONDOMINIUM ASSOCIATION,
    Taxpayer,
    Respondents.
    Docket Nos.                             No. 1-08-2060
    COURT                             Appellate Court of Illinois
    First District, 5th Division
    Opinion
    Filed                                 July 30, 2010
    (Give month, day and year)
    JUSTICES                 JUSTICE HOWSE delivered the opinion of the court:
    TOOMIN, P.J., and LAVIN, J., concur.
    APPEAL from the              Petition for Review of an Order of
    Circuit Court of             the Illinois Property Tax Appeal Board.
    Cook County; the
    Hon.___________,
    Judge Presiding.
    For APPELLANTS,      Indicate if attorney represents APPELLANTS or APPELLEES and
    John Doe, of         include attorneys of counsel. Indicate the word NONE if
    Chicago.             not represented.
    For APPELLEES,             For Petitioner, Anita Alvarez, State's Attorney of
    Smith and Smith,           Cook County, of Chicago. (Patrick T. Driscoll, Jr.,
    of Chicago.                Deputy State's Attorney, Chief, Civil Actions Bureau;
    Benjamin R. Bilton and Tatia C. Gibbons, Assistant
    State's Attorneys, of Counsel.)
    For Respondent - Crestwood Condominium Association,
    Joseph Brown,              Donald T. Rubin, Rubin & Norris, LLC, of Chicago.
    of Counsel).
    For Respondent - Property Tax Appeal Board,
    Lisa Madigan, Attorney General, Michael A. Scodro,
    Solicitor General, and Evan Siegel, Assistant Attorney
    Also add attor-            General, of Chicago.
    neys for third-
    party appellants
    and/or appellees.
    (USE REVERSE SIDE IF NEEDED)
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