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The Chicago Bears made headlines last year with an ambitious plan to construct a state-of-the-art football stadium on the site of the former Arlington Park racetrack, but this project is now a facing a major hurdle because of property tax issues.
Seeking more affordable and predictable property taxes, the Bears approached Springfield and the village of Arlington Heights for tax relief. Their request, however, is facing opposition, principally from local school districts. Complicating matters further, the property was recently reassessed by the county, resulting in a sixfold increase in the tax assessment.
As a result, the Bears have been reconsidering their options, including demolishing the Arlington Park buildings to save on tax property taxes, and building the stadium elsewhere where taxes promise to be predictably lower.
[ Thomas Olcese: Do we want the Bears to trample all over Arlington Heights? ]
Throughout this ongoing drama and the ensuing debates, it has become evident to me that taxpayers will end up with the short end of the stick in this situation — regardless of where the Bears stadium is built — because of a loophole in the state property tax cap law. Here’s why:
• Last year, the Arlington Park racecourse owners paid approximately $2.8 million in property taxes. This was a win for taxpayers. If the racetrack had not contributed such a significant amount, Arlington Heights residents would have been forced to pay an additional $2.8 million in taxes themselves.
• This year, the assessment of Arlington Park is expected to triple and the tax bill is expected to be about $7.8 million. Another win for taxpayers. Unfortunately, this victory will be short-lived as the Bears are moving forward rapidly with the demolition of Arlington Park, and once the buildings are demolished, this should result in a considerable reduction in the Bears’ tax obligations.
• Once the buildings have been razed, the taxes for Arlington Park could fall to about $2.4 million (based on the current land assessment and most recent equalized tax rates). This would be a loss for local taxpayers as they would be burdened with an additional $5.4 million in taxes (subtracting $2.4 million from $7.8 million) if and when the Bears realize a $5.4 million tax reduction.
Chicago Tribune Opinion
• You may think that Arlington Heights residents will enjoy a decrease in their property taxes once the new stadium is built and the stadium owners are subject to a multimillion-dollar tax bill. Unfortunately, that will not be the case because of a loophole in the property tax cap laws. Property taxes on new buildings do not reduce the tax burden of local residents; instead, taxes levied on new buildings are paid to local taxing bodies and do not bring down local tax rates. So, under the current law, taxpayers lose out when old buildings are demolished and do not reap any tax benefits when new buildings are constructed. This is unfair to taxpayers.
Given that much of the taxes from Arlington Park go to the school districts, it is understandable why the school districts would oppose the property tax relief sought by the Bears. But the additional tax revenue the Bears stadium would contribute should be a pure windfall for the school districts as a new stadium is not likely to generate a single additional student for the local schools.
In the Bears stadium debate, our elected officials face an important question: Whose interests should they prioritize? Should they protect the school districts that stand to receive a multimillion-dollar tax windfall without having to provide additional educational services, or should they consider the welfare of the broader community that would stand to benefit from the prestige, jobs and related business opportunities a new stadium would bring?
No matter what happens with the Bears stadium, our legislature should intelligently tighten the property tax loophole for new property, allowing hardworking taxpayers to experience property tax relief when new buildings are erected in their communities. The existence of this loophole is one reason we have seen our property taxes grow so much as old buildings in our gentrifying county are demolished and new ones are built in their place.
Furthermore, it is essential to recognize the detrimental effect this situation has on ongoing efforts to attract new businesses and stimulate new development in Cook County. Many businesspeople and developers perceive Cook County as a challenging place to do business, and this ongoing saga only threatens to reinforce that perception.
Michael J. Elliott is an attorney who helps property owners reduce their property taxes.
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