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Tax appraisals must include sales comparison method when data is available.

The Appellate Court of Illinois ruled that the property tax appraisal of a mixed-use commercial building should have included the sales comparison method of valuation as sufficient sales data was available.

Omni Chicago Hotel (Omni) owns a 17,550 square-foot parcel of land on Michigan Avenue in Chicago improved with a 40-story building with office space, retail space, and hotel space. The county assessor issued an assessment indicating a market value of $48,296,794 for the property. Omni challenged the assessment with the county board of review (BOR), which refused to reduce the assessment. Omni then appealed to the property tax appeal board (PTAB), submitting its own appraisal of $43,250,000. Omni's appraiser testified that he used only the income approach to valuation in his appraisal; he found that the cost and market comparison approaches were inappropriate because of the building's unique character and the lack of comparable sales within the area. In response, the BOR submitted an appraisal of $68 million, which its appraiser developed using all three valuation approaches. Under the cost approach, the BOR's appraiser analyzed the sales of 18 buildings that were located in "comparable high end areas"; under the sales comparison approach, he analyzed the office, retail, and hotel spaces independently and found sales of each type that he adjusted for size, age, location, and condition. The PTAB rejected the BOR's appraisal in favor of Omni's, finding that the property was unique in the local market and that the income approach provided the best evidence of its value. The BOR appealed.

On review, the appellate court held that the sales comparison approach must be included in a property tax appraisal when market data is available. The court also emphasized that using the same valuation method for all property is essential to ensure uniform treatment of taxpayers. The court concluded that because Omni's appraisal did not contain the sales comparison approach, it was insufficient to challenge the county's assessment. The decision of the property tax appeal board was reversed.

Cook County Board of Review v. Illinois

Property Tax Appeal Board

Appellate Court of Illinois

July 28, 2008

2008 WL 2924308 (Ill. App. 1 Dist. 2008)
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Title Annotation:Recent Court Decisions
Publication:Appraisal Journal
Geographic Code:1U3IL
Date:Jan 1, 2009
Words:361
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