Central Nursing Realty, LLC v. Illinois Property Tax Appeal Board , 2020 IL App (1st) 180994 ( 2020 )

2020 IL App (1st) 180994No. 1-18-0994
Opinion filed June 11, 2020
Fourth Division
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
CENTRAL NURSING REALTY, LLC, ) Petition for Review of a Final
) Administrative Decision of the
Petitioner, ) Illinois Property Tax Appeal Board
)
v. )
)
THE ILLINOIS PROPERTY TAX APPEAL )
BOARD; THE COOK COUNTY BOARD OF )
REVIEW; and THE CHICAGO BOARD OF )
EDUCATION, )
) Nos. 11-31329.001-C-3 through 11-
Respondents. ) 31329.010-C-3
JUSTICE LAMPKIN delivered the judgment of the court, with opinion.
Justice Burke concurred in the judgment and opinion.
Presiding Justice Gordon specially concurred.
OPINION
¶1 Central Nursing Realty, LLC (Central Nursing), challenges a decision of the Illinois
Property Tax Appeal Board (Board) assessing the value of its real property. Central Nursing argues
that the Board overstated the fair market value of the property and failed to consider its argument
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and supporting evidence that the property was inequitably assessed in comparison to similar
properties. For the following reasons, we affirm the Board’s decision. 1
¶2 I. BACKGROUND
¶3 The subject property is a 245-bed, skilled-care nursing home located at 2450 North Central
Avenue in Chicago, Illinois, in the Jefferson Township section of Cook County. It consists of
32,334 square feet of land, improved with a four-story, 65,088 square foot building with 52,157
square feet above grade. The building was constructed in 1973 of masonry and steel. Additional
site improvements include a 45-car paved parking lot. Central Nursing purchased the nursing home
business as a going concern, including its real property and tangible and intangible personal
property, for $25 million in 2009. At the time, the buyer and seller attributed approximately $7.5
million of the total purchase price to the value of the real estate.
¶4 In 2011, the Cook County Assessor assessed the land at a value of $127,312 and the
improvements at a value of $1,930,042, for a total assessed value of $2,057,354. Because
commercial property in Cook County is assessed at 25% of its fair market value, the assessment
implied that the subject property had a fair market value of $8,229,416. Central Nursing appealed
to the Cook County Board of Review, which rejected its request to reduce the assessment.
¶5 Central Nursing then appealed to the Board, arguing that the assessment was excessive and
inequitable and that it should be reduced to one of several alternative amounts. First, Central
Nursing argued that the assessment should be reduced to $1,872,875. In support, Central Nursing
submitted the real estate transfer declaration form filed after its 2009 purchase of the going
concern, in which the parties attested that the fair market value of the real estate was $7,491,500.
1
In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this
appeal has been resolved without oral argument upon the entry of a separate written order.
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¶6 Next, under what it called the “Economic Approach to Value,” Central Nursing argued that
the assessment should be reduced to $1,816,666 to reflect a fair market value of $7,266,664. In
support of this argument, Central Nursing attached a 2010 financial statement showing revenue of
$10,222,798. Although the statement showed net income of $1,236,368, Central Nursing instead
(without explanation) “[s]tabiliz[ed]” its expenses at 90% of revenue, producing a 2010 net income
of $1,022,280, which it then “capitaliz[ed]” at a rate of 14.07%, yielding (according to its
calculation) a fair market value of $7,266,664. 2
¶7 As a further alternative, Central Nursing argued that the assessment should be reduced to
$1,087,496, based on a fair market value of $4,349,987, which it calculated using the capital
component of the Medicaid reimbursement rate that it deemed attributable to the real estate. As
support for this method of valuation, Central Nursing cited (but did not attach) an unpublished,
out-of-state trial court decision.
¶8 As its next alternative, Central Nursing argued that the assessment should be reduced to
$1.35 million based on an appraised fair market value of $5.4 million. In support, Central Nursing
submitted an appraisal report by certified real estate appraiser Ryan Korth, which analyzed the
property using three approaches to valuation—the cost approach, the income capitalization
approach, and the sales comparison approach. Under the cost approach, Korth estimated the value
of the land by considering sales of four comparable parcels in surrounding neighborhoods between
2008 and 2011. After calculating the sales prices of those lots per square foot of floor area ratio
(which measures the maximum allowable ratio of building area to lot size) and making relevant
adjustments, Korth concluded that the subject property’s land had a fair market value of $1 million.
2
As the Board later noted, a correct calculation using Central Nursing’s figures yields a fair market
value of $7,265,672.
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¶9 Korth then used the Marshall Valuation Service (MVS) cost manual to estimate the cost of
reproducing the building. Based on the type and quality of its construction, Korth classified the
building as a Class C—Average Convalescent Hospital with a replacement cost of $11,484,825.
Korth explained that he did not factor entrepreneurial incentive (the profit that a developer can
expect to earn on a project) into the building’s replacement cost because nursing homes are not
typically built by developers on speculation. Korth then calculated the building’s depreciated value
using the age/life method. Based on its condition and maintenance history, Korth estimated that
the building had an effective age of 25 years. In addition, relying on the MVS cost manual’s
estimate for Class C—Average Convalescent Hospitals, Korth determined that the building had a
total economic life of 40 years. By dividing the building’s effective age by its total economic life,
Korth calculated that the building had depreciated by 62.5% and had a current fair market value
of $4,300,184. Finally, Korth estimated that the property’s site improvements had a depreciated
value of $40,000. In total, under the cost approach, Korth concluded that the property’s fair market
value was $5.3 million, rounded.
¶ 10 Under the income capitalization approach, Korth determined that the total value of the
business as a going concern was $25.2 million. He arrived at this figure by dividing the business’s
adjusted net operating income by a loaded capitalization rate. He then subtracted the value of the
real estate (as previously determined under the cost approach) from the going concern value,
yielding a non-real-estate business value of $19.9 million. In a process that the Board described as
“somewhat circular,” Korth then subtracted the business’s non-real-estate value from its going
concern value, which (unsurprisingly) yielded a real estate value of $5.3 million.
¶ 11 Under the sales comparison approach, Korth considered recent sales of four comparable
nursing home businesses. After subtracting the businesses’ non-real-estate values and making
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relevant adjustments, Korth concluded that the subject property had a fair market value of $4.7
million.
¶ 12 In reconciling the results of the three approaches, Korth placed the most weight on the cost
approach, explaining that it provided the best indication of the value of the real property because
it did not require the extraction of the business’s non-real-estate value from its overall value as a
going concern. Although Korth’s initial report concluded that the property had a fair market value
of $5.3 million as of January 1, 2012, he subsequently stated that the value of the property as of
the relevant date of January 1, 2011, was $5.4 million. In addition, Korth explained that he did not
consider the value that Central Nursing attributed to the property on the real estate transfer
declaration form that it filed after purchasing the going concern because the form was not
completed by a professional appraiser.
¶ 13 Central Nursing’s final alternative argument sought to reduce the assessed value of the
property to $1,478,812, based on assessments of allegedly comparable properties. In support of
this equity argument, Central Nursing submitted a grid with details such as age, address, lot size,
building area, construction class and condition, number of beds, and assessment value for the
subject property and eight allegedly comparable nursing homes. According to the data provided,
the comparable properties’ improvements were assessed at values ranging from $5076 per bed to
$7700 per bed, whereas the subject property’s improvement assessment was $7878 per bed. As
the Board later noted, while Central Nursing’s initial grid indicated that the property with an
improvement assessment of $5076 per bed had 176 beds, two additional grids that Central Nursing
submitted listed the property as having only 146 beds, which produced an improvement assessment
of $6119 per bed for that property. The additional grids also identified three other allegedly
comparable properties but provided assessment information for only one of them, indicating an
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improvement assessment of $6001 per bed. In addition, Central Nursing submitted numerous
computer-generated printouts from the Cook County Assessor’s office that listed the assessment
values for the subject property and the eight allegedly comparable properties included in its initial
grid.
¶ 14 In response to the appeal, the Cook County Board of Review submitted data for five
allegedly comparable properties that sold between September 2006 and December 2009 for prices
ranging from $193 per square foot of building area to $307 per square foot of building area. By
comparison, the Board of Review’s assessment of the subject property implied a fair market value
of $8,229,416, which equated to a value of $126 per square foot of total building area or $158 per
square foot of building area excluding basement space.
¶ 15 The Board of Education of the City of Chicago intervened to defend the assessment and
submitted an appraisal by Eric Dost. Like Korth, Dost analyzed the property using the cost
approach, the income capitalization approach, and the sales comparison approach. To estimate the
value of the land under the cost approach, Dost considered five comparable parcels that sold
between December 2009 and November 2010. After calculating their sale prices per square foot
and making relevant adjustments, Dost concluded that the subject land had a fair market value of
$650,000. Based on the building’s HVAC system and exterior detail, Dost concluded that the
structure was a Class C—Good (rather than Average) Convalescent Hospital. Using the MVS cost
manual for a structure of that type and quality, Dost calculated a replacement cost of $14,776,623,
which included a 15% markup to account for entrepreneurial incentive. Using the age/life method
to determine the building’s depreciated value, Dost estimated that the building had an effective
age of 20 years, based on its maintenance history, lack of functional obsolescence, and capital
improvements of $190,000 between 2009 and 2010. In addition, although the MVS guidelines
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provided that a Class C—Good Convalescent Hospital had a total economic life of 45 years, Dost
concluded that the building’s total economic life was 50 years, based on his experience and
inspection of the property. Accordingly, Dost calculated that the building had depreciated by 40%
and had a current fair market value of $8,865,974. Dost then estimated that the property’s site
improvements had a current value of $42,000, which yielded a total fair market value of $9.6
million, rounded.
¶ 16 Under the income capitalization approach, Dost determined that the market value of the
business as a going concern was $15.5 million, rounded, which he calculated by dividing the
business’s adjusted net operating income by a loaded capitalization rate. He then used two separate
methodologies to extract the business’s real estate value. First, using the quantification of business
value methodology, Dost calculated the portion of the business’s net operating income attributable
to its proprietary earnings and divided that amount by a capitalization rate that yielded a non-real-
estate business value of $1.7 million, rounded. Second, using the cost approach comparison
methodology, Dost subtracted the value of the business’s real estate (as previously determined
using the cost approach), as well as the value of the business’s personal property, from the going
concern value, which resulted in a business value $5,287,500. After averaging those figures, Dost
calculated a business value of $3.5 million, rounded, which he subtracted (along with the value of
the business’s personal property) from the going concern value, yielding a real estate value of
$11.4 million, rounded.
¶ 17 Finally, under the sales comparison approach, Dost considered recent sales of five
comparable nursing home businesses and concluded, after making relevant adjustments, that the
subject business had a going concern value of $14.7 million. Dost then subtracted the business and
personal property values calculated under the income capitalization approach from the going
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concern value to arrive at a real estate value of $10.6 million, rounded. In reconciling the results
of the various approaches, Dost placed primary emphasis on the cost and income capitalization
approaches and concluded that the subject property had a fair market value of $10.5 million.
¶ 18 In rebuttal, Central Nursing submitted a report by appraiser Bradley Braemer that identified
several alleged errors in the Dost appraisal but did not provide an independent view of the
property’s fair market value. Braemer opined that Dost’s decision to factor entrepreneurial
incentive into the replacement cost of the building was inappropriate and unsupported by local
market data. He also questioned Dost’s conclusion that the building had an effective age of 20
years, opining that the capital improvements cited by Dost were relatively minimal. Moreover,
although Braemer agreed with Dost’s classification of the building as a Class C—Good
Convalescent Hospital, he criticized Dost’s decision to deviate from the MVS guidelines when
estimating the building’s total economic life.
¶ 19 In addition, Central Nursing’s rebuttal included a revised version of its initial grid of
comparable nursing homes that added assessment information and property details for the
comparable properties identified by the Board of Review. According to the revised grid, the
improvement assessments for the Board of Review’s comparable properties ranged from $4751
per bed to $11,058 per bed.
¶ 20 The matter proceeded to an evidentiary hearing, at which Korth, Dost, and Braemer
testified consistently with their reports. On the morning of the hearing, Central Nursing requested
leave to submit updated assessment information for several of the comparable properties that it
and the Board of Review had previously identified. According to Central Nursing, the assessments
for those properties had been revised as a result of tax objection proceedings brought by the
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property owners in the circuit court under section 23-15 of the Property Tax Code (35 ILCS
200/23-15 (West 2018)). The administrative law judge (ALJ) allowed Central Nursing to submit
the updated assessment information but ruled that the circuit court judgments themselves were
inadmissible. Based on the updated grid submitted by Central Nursing, its eight comparable
properties had improvement assessments ranging from $3795 per bed to $7700 per bed and the
Board of Review’s comparable properties had improvement assessments ranging from $4401 per
bed to $8887 per bed. 3
¶ 21 The ALJ allowed the Board of Review and the Board of Education 14 days to file responses
to the updated assessment information and gave Central Nursing seven days to file a reply. In a
joint response, the Board of Review and the Board of Education argued, among other things, that
Central Nursing’s updated grid relied on inaccurate assessment information for the comparable
properties. Although the Board’s decision states that Central Nursing did not file a reply, and no
reply appears in the record on appeal, Central Nursing has included a copy of the reply in the
appendix to its brief, along with a printout of an email from the ALJ acknowledging its receipt. In
the reply, Central Nursing explained that the assessment information in the updated grid correctly
reflected the revised assessments entered as a result of the property owners’ circuit court
challenges.
¶ 22 In a written decision, the Board concluded that a reduction in the assessed value of the
subject property from $2,057,354 to $1,957,509 was warranted but rejected Central Nursing’s
3
As the Board noted, the correct range of updated assessments for Central Nursing’s comparable
properties appears to be $4191 per bed to $7700 per bed. The property that Central Nursing identified as
having an updated assessed value of $3795 per bed is the property that it previously described as having
either 176 bed or 146 beds. The assessment value of $3795 per bed appears to be based on the assumption
that the property has 176 beds. If the property in fact has 146 beds, its per-bed assessed value would be
$4575.
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request for a further reduction. At the outset, the Board identified Central Nursing’s five alternative
arguments in support of an assessment reduction, including its argument that the subject property
was “inequitably assessed.” With respect to the equity argument, the Board noted that Central
Nursing had submitted “varying degrees of information” for its allegedly comparable properties
and described Central Nursing’s evidentiary submission as “nothing less than convoluted” and
containing “numerous discrepancies.” Nevertheless, the Board stated that it did “its best to
ascertain the correct information for each comparable [property] based on the data submitted by
[Central Nursing].” In particular, after “considering the updated assessment information” that
Central Nursing submitted during the hearing, the Board found that the properties identified by
Central Nursing “had improvement assessments that ranged from *** $4,191.14 to $7,700.04 per
bed,” while the properties identified by the Board of Review “had improvement assessments that
ranged from *** $4,400.89 to $8,886.91 per bed.”
¶ 23 Addressing Central Nursing’s arguments in turn, the Board first rejected its request to
assess the property using the “Economic Approach to Value.” The Board noted that Central
Nursing offered no evidence that the historical income it relied on under that approach was
“reflective of the market and the property’s capacity for earning income,” even though “it is the
capacity for earning income, rather than the income actually derived, which reflects ‘fair cash
value’ for taxation purposes.” See Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.
2d 428, 431 (1970). The Board was similarly unpersuaded by Central Nursing’s argument that the
property’s fair market value should be calculated using Medicaid reimbursement rates, noting that
Central Nursing’s own expert, Korth, found the method unreliable because Illinois had not rebased
its Medicaid reimbursement rate in more than 20 years.
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¶ 24 The Board likewise rejected Central Nursing’s contention that the fair market value of the
property could be established by the real estate transfer declaration form that it filed after its 2009
purchase of the going concern, in which both it and the seller attested that the real property
involved in the sale had a fair market value of approximately $7.5 million. Because Central
Nursing offered no evidence concerning the process by which the parties arrived at that figure, the
Board accorded it no weight.
¶ 25 The Board then considered the dueling appraisals by Korth and Dost, as well as Braemer’s
review of Dost’s appraisal. The Board noted that both Korth and Dost placed emphasis on the cost
approach when valuing the real estate and that Braemer agreed that it was appropriate to use that
approach when valuing a nursing home’s real estate. The Board acknowledged that the appraisers
also analyzed the subject property using the income capitalization and sales comparison
approaches, but it gave the results reached under those approaches “diminished weight” because
they were “substantially reliant on the value of the subject’s real estate as determined under the
appraisers’ respective cost approaches.”
¶ 26 Although the Board found that the Korth and Dost appraisals “lack[ed] sufficient evidence
to support their respective conclusions under the cost approach,” the Board determined that it could
“us[e] the credible and reliable evidence provided in [the] appraisals” to “craft an appropriate
conclusion of value.” To that end, the Board first determined that Dost’s valuation of the land at
$650,000 was more reliable than Korth’s higher estimate. In particular, the Board explained that
it accorded diminished weight to Korth’s valuation because it relied on comparable sales that were
more remote in time than those that Dost considered and because it compared the various
properties using sales price per square foot of floor area ratio rather than actual square footage.
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¶ 27 As for the value of the building, the Board noted that Korth and Dost agreed that the
building was a Class C Convalescent Hospital under the MVS guidelines but disagreed about the
quality of the building’s construction, with Korth concluding that it was average and Dost
concluding that it was good. The Board credited Dost’s conclusion on this point, noting that
Braemer did not find it to be erroneous. In addition, the Board noted that the building had been
adequately maintained and (in both appraisers’ views) had an effective age that was lower than its
actual age, suggesting that it was in good condition. The Board disagreed, however, with Dost’s
decision to factor entrepreneurial incentive into the replacement cost of the building, due to a lack
of market data supporting the inclusion of entrepreneurial incentive in the value of a nursing home.
Based on the MVS cost manual data for a Class C—Good Convalescent Hospital, but excluding
Dost’s inclusion of entrepreneurial incentive, the Board determined that the building’s replacement
cost was $12,849,237.
¶ 28 To calculate the building’s current value, the Board found that the age/life method used by
Korth and Dost, and approved by Braemer, was “the proper way to determine the subject’s
depreciation.” The Board noted that Korth and Dost agreed that the building’s effective age was
lower than its actual age of 38 years, with Korth estimating 25 years and Dost 20 years. The Board
noted that Braemer criticized Dost’s estimate, but it found Dost’s view more reliable than Korth’s,
noting the “significant capital improvements” made to the building between 2009 and 2010. With
respect to the building’s total economic life, the Board disagreed with both appraisers. The Board
rejected Korth’s estimate of 40 years because it relied on the MVS guidelines for a Class C—
Average Convalescent Hospital rather than a Class C—Good Convalescent Hospital. The Board
likewise rejected Dost’s estimate of 50 years, concluding that Dost provided no support for his
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decision to deviate from the MVS guidelines for a Class C—Good Convalescent Hospital.
Adhering to the MVS guidelines, the Board concluded that the building had a total economic life
of 45 years. Thus, with a replacement cost of $12,849,237 and a depreciation rate of 44.44%, the
Board concluded that the building had a current fair market value of $7,139,036. Additionally, the
Board determined that the fair market value of the site improvements was $41,000, which was
halfway between the estimates provided by Korth and Dost.
¶ 29 In total, the Board concluded that the fair market value of the subject property was
$7,830,036, which resulted in an assessed value of $1,957,509 under the 25% assessment level
applicable to commercial properties in Cook County. Having determined the property’s fair market
value, the Board also concluded that the property was “fairly and equitably assessed” and that “no
reduction [was] warranted based on [Central Nursing’s] equity argument.”
¶ 30 Central Nursing timely petitioned for our review of the Board’s decision.
¶ 31 II. ANALYSIS
¶ 32 Final decisions of the Board are subject to review under the Administrative Review Law
(735 ILCS 5/3-101 et seq. (West 2018)). 35 ILCS 200/16-195 (West 2018). In cases where, as
here, a change in assessed value of $300,000 or more was sought before the Board, review lies
directly in the appellate court. Id. The scope of our review “extend[s] to all questions of law and
fact.” 735 ILCS 5/3-110 (West 2018). We review the Board’s conclusions of law de novo and its
resolution of mixed questions of law and fact for clear error. Cook County Board of Review v.
Property Tax Appeal Board, 403 Ill. App. 3d 139, 143 (2010). The Board’s “findings and
conclusions on questions of fact,” however, are deemed “prima facie true and correct” (735 ILCS
5/3-110 (West 2018)) and will be reversed only if they are against the manifest weight of the
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evidence, meaning that an opposite conclusion is clearly evident from the record. Cook County
Board of Review, 403 Ill. App. 3d at 143.
¶ 33 Central Nursing’s first contention is that the Board violated the Illinois Constitution, the
Property Tax Code, and the Board’s rules by disregarding its argument that the subject property
was inequitably assessed in comparison to similar properties. The Illinois Constitution provides
that “taxes upon real property shall be levied uniformly by valuation ascertained as the General
Assembly shall provide by law.” Ill. Const. 1970, art. IX, § 4(a). Under this provision, “taxing
officials may not value the same kinds of properties within the same taxing boundary at different
proportions of their true value.” John J. Moroney & Co. v. Illinois Property Tax Appeal Board,
2013 IL App (1st) 120493, ¶ 39. “The party objecting to an assessment on lack of uniformity
grounds bears the burden of proving the disparity by clear and convincing evidence.” Walsh v.
Property Tax Appeal Board, 181 Ill. 2d 228, 234 (1998); see also 86 Ill. Adm. Code 1910.63(e)
(2000) (“When unequal treatment in the assessment process is the basis of the appeal, the inequity
of the assessments must be proved by clear and convincing evidence.”). To satisfy its burden, the
challenging party must submit documentation showing the assessments of the subject property for
the year in question and (as the Board recommends) at least three comparable properties. 86 Ill.
Adm. Code 1910.65(b) (1997). The documentation should also show “the similarity, proximity[,]
and lack of distinguishing characteristics of the assessment comparables to the subject property.”
Id.¶ 34 Central Nursing contends that the Board disregarded its equity argument, even though it
complied with the Board’s rules regarding documentary evidence by submitting several grids
containing assessment information and relevant property details for the subject property and eight
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allegedly comparable properties. But the Board’s decision establishes that the Board considered
and rejected—rather than ignored—Central Nursing’s equity argument. The Board’s decision
expressly recognized Central Nursing’s argument that the subject property was inequitably
assessed in comparison to similar properties and discussed the evidence that Central Nursing
submitted in support of that argument. The Board noted that Central Nursing’s evidentiary
submissions were “convoluted” and contained “numerous discrepancies,” but it nevertheless
attempted “to ascertain the correct information for each comparable [property] based on the data”
that Central Nursing submitted. Finally, after determining the fair market value of the subject
property and reducing its assessment accordingly, the Board concluded that the property had been
“fairly and equitably assessed” and that “no [further] reduction [was] warranted based on [Central
Nursing’s] equity argument.”
¶ 35 Central Nursing asserts that the Board did not consider the entirety of its evidence, but the
only example it gives is the Board’s failure to consider the reply that it submitted after the hearing
addressing updated assessment information for several allegedly comparable properties. The reply,
however, contained argument not evidence. There is no question that the Board considered the
evidence of updated assessments that Central Nursing submitted. Indeed, the Board’s decision
noted that the ALJ granted Central Nursing’s request to submit updated assessment information
and discussed the substance of that updated evidence, including the revised range of improvement
assessments for the comparable properties identified by the parties. 4 Moreover, because Central
4
Central Nursing notes that the Board described the updated range of improvement assessments for
its comparable properties as $4191 per bed to $7700 per bed, while its updated submission identified a
property with an updated improvement assessment of $3795 per bed. But the Board earlier explained that
Central Nursing had provided conflicting information regarding the number of beds at the property in
question. It appears that the Board calculated the updated per-bed improvement assessment for that property
based on the lower bed count identified in Central Nursing’s conflicting submissions, which produced an
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Nursing has not alleged, let alone shown, that it was prejudiced by the Board’s failure to consider
its reply, reversal of the Board’s decision on that basis is unwarranted. See McCleary v. Board of
Fire & Police Commissioners of the City of Woodstock, 251 Ill. App. 3d 988, 993 (1993) (an
“appellate court may reverse an administrative ruling only if there is error which prejudiced a party
in the proceeding”); 735 ILCS 5/3-111(b) (West 2018) (“Technical errors in the proceedings
before the administrative agency or its failure to observe the technical rules of evidence shall not
constitute grounds for the reversal of the administrative decision unless it appears to the court that
such error or failure materially affected the rights of any party and resulted in substantial injustice
to him or her.”).
¶ 36 Central Nursing further notes that the Board did not state the standard of review under
which it evaluated the equity argument, but it provides no authority for the proposition that the
Board’s failure to do so justifies reversal of its decision. Central Nursing likewise faults the Board
for discussing the equity argument in the “Findings of Fact” section of its decision, rather than the
decision’s “Conclusions of Law” section. Again, Central Nursing cites no authority that would
support reversal of the Board’s decision on this basis. Although the Board discussed the evidence
that Central Nursing submitted in support of the equity argument in the fact section of its decision,
its determination that the evidence and argument were insufficient to warrant a reduction in the
property’s assessed value was included in the decision’s conclusions of law section. Taken as a
whole, the Board’s decision identified Central Nursing’s equity argument, discussed the evidence
that Central Nursing submitted in support of the argument, and concluded that the evidence and
argument were unavailing. We find no basis for concluding that the Board failed to consider
improvement assessment of $4575 per bed. Central Nursing has not attempted to reconcile the discrepancy
in the bed count it provided for this property.
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Central Nursing’s equity argument or any of the evidence that Central Nursing submitted in
support of it.
¶ 37 Central Nursing also appears to challenge the merits of the Board’s determination that the
subject property was not inequitably assessed in comparison to similar properties. As the party
challenging the assessment “on lack of uniformity grounds,” it was Central Nursing’s burden to
“prov[e] the disparity by clear and convincing evidence.” Walsh, 181 Ill. 2d at 234. “The issue of
whether comparable properties establish the uniform assessment and valuation of properties is a
question of fact.” Board of Education of Ridgeland School District No. 122, Cook County v.
Property Tax Appeal Board, 2012 IL App (1st) 110461, ¶ 31; see also Du Page County Board of
Review v. Property Tax Appeal Board, 284 Ill. App. 3d 649, 653-54 (1996) (“The question whether
the four comparable sales did or did not establish that the subject property was not uniformly
assessed was a factual issue for the [Board] to resolve.”). We thus review the Board’s conclusion
that Central Nursing failed to demonstrate that the subject property was inequitably assessed under
the manifest weight of the evidence standard and will reverse only if the incorrectness of the
Board’s decision is clearly evident from the record. Cook County Board of Review, 403 Ill. App.
3d at 143.
¶ 38 In its brief, Central Nursing identifies four of the allegedly comparable nursing home
properties that it and the Board of Review submitted below. According to Central Nursing, those
properties, like the subject property, are located in Cook County, were built in the mid-1970s, and
have improvement assessments that range from $4191 per bed to $8887 per bed. By comparison,
the subject property’s improvement assessment (as reduced by the Board) is $7327 per bed, which
according to Central Nursing is higher than all but one of the assessments given to the comparable
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properties identified in its brief. Although Central Nursing states that the allegedly comparable
properties have between 190 and 313 beds and range in size from 49,600 square feet to 72,432
square feet (compared to the subject property’s 245 beds and 65,088 square feet), it does not
provide bed-count, building area, or assessment information for any of the comparable properties
on an individualized basis. Nor does it discuss any other details, including type and quality of
construction, that would bear on the similarity or dissimilatory of the comparable properties in
relation to the subject property. Central Nursing likewise makes no argument that the subject
property is more similar to the three comparable properties that received per-bed assessments
lower than its assessment than it is to the comparable property that received a higher per-bed
assessment. Central Nursing has thus forfeited any such argument. See Ill. S. Ct. R. 341(h)(7) (eff.
May 25, 2018). For all these reasons, we cannot say that Central Nursing demonstrated by clear
and convincing evidence that the subject property was inequitably assessed in comparison to
similar properties, nor that the Board’s finding to that effect was against the manifest weight of
the evidence.
¶ 39 Central Nursing also raises two challenges to the Board’s determination regarding the fair
market value of the property. The Board’s “finding regarding the property’s fair market value will
not be reversed unless it is against the manifest weight of the evidence, which occurs only where
all reasonable and unbiased persons would agree that the decision is erroneous and that an opposite
conclusion is clearly evident.” (Internal quotation marks omitted.) Kraft Foods, Inc. v. Illinois
Property Tax Appeal Board, 2013 IL App (2d) 121031, ¶ 51.
¶ 40 First, Central Nursing contends that the Board’s decision was against the manifest weight
of the evidence because it gave no weight to the value attributed to the property on the real estate
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No. 1-18-0994
transfer declaration form filed after Central Nursing purchased the going concern. As Central
Nursing notes, when it purchased the going concern in 2009 for $25 million, it and the seller
attested that approximately $7.5 million of the total purchase price was allocated to the value of
the real property. But Central Nursing offered no evidence at the hearing to explain how the parties
to the transaction arrived at that valuation. And Central Nursing’s own expert, Korth, testified that
he would not accord any weight to a valuation made by a person who was not a certified real estate
appraiser. Accordingly, the Board’s decision to accord no weight to the real estate transfer
declaration form was not against the manifest of the evidence. See Kankakee County Board of
Review v. Property Tax Appeal Board, 337 Ill. App. 3d 1070, 1074 (2003) (“An administrative
decision is not against the manifest weight of the evidence where the record contains some
competent evidence to support the agency’s finding.”).
¶ 41 Second, Central Nursing contends that the Board’s decision was against the manifest
weight of the evidence because it relied on parts of Dost’s appraisal, despite rejecting other parts
of it based on errors identified by Braemer. But the Board was not required to accept or reject
Dost’s opinion wholesale. When faced with competing expert opinions, “it [is] not inherently
improper for the [Board] to credit some of the evidence that both parties presented.” Kraft Foods,
2013 IL App (2d) 121031, ¶ 47. The Board may “consider conflicting appraisals and conclude that
the property is worth a different amount than what any of the experts testified to.” Id. ¶ 48. Here,
the Board considered Korth’s and Dost’s competing appraisals, as well as Braemer’s review of
Dost’s appraisal, and accepted the parts of each expert’s opinion that it found credible and rejected
the parts that it did not. On administrative review, we may not “reweigh the evidence, reassess the
credibility of the witnesses, substitute [our] judgment for [the Board’s], or make an independent
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No. 1-18-0994
determination of the facts.” Id. ¶ 51. Nor will we “disturb the [Board’s] findings where there exists
simply a difference of opinion regarding the actual value of the property.” Id. Central Nursing has
not shown that “all reasonable and unbiased persons would agree” that the Board’s decision to rely
on parts of Dost’s appraisal and its ultimate determination of the subject property’s fair market
value were “erroneous and that an opposite conclusion [was] clearly evident.” (Internal quotation
marks omitted.) Id. We thus cannot say that the Board’s decision was against the manifest weight
of the evidence.
¶ 42 III. CONCLUSION
¶ 43 For the foregoing reasons, we affirm the decision of the Illinois Property Tax Appeal
Board.
¶ 44 Affirmed.
¶ 45 PRESIDING JUSTICE GORDON, specially concurring:
¶ 46 I agree with the ultimate conclusion of the majority, but I must respectfully write
separately. The expert witnesses who testified in the case at bar did not agree to the facts of this
case, and their ultimate opinions varied based on the facts that formed the basis of their opinions.
As a result, I cannot say that an opposite conclusion is clearly evident from the record based on
the board’s factual findings and conclusions. I thus must also affirm.
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No. 1-18-0994
No. 1-18-0994
Cite as: Central Nursing Realty, LLC v. Illinois Property Tax Appeal
Board, 2020 IL App (1st) 180094Decision Under Review: Petition for review of orders of Illinois Property Tax Appeal
Board, Nos. 11-31329.001-C-3 through 11-31329.010-C-3.
Attorneys John B. Wolf, of Ashman & Stein, of Skokie, for petitioner.
for
Appellant:
Attorneys Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz,
for Solicitor General, and Valerie Quinn, Assistant Attorney General,
Appellees: of counsel), for appellee Illinois Property Tax Appeal Board.
Kimberly M. Foxx, State’s Attorney, of Chicago (Cathy McNeil
Stein, John J. Carey, and Benjamin R. Bilton, Assistant State’s
Attorneys, of counsel), for appellee Cook County Board of
Review.
Ares G. Dalianis, of Franczek P.C., of Chicago, for other appellee.
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