By Brian P. Liston
President-Liston & Tsantilis
Recently, Cook County appointed me with seven other prominent local Mayors, Economic Development Municipal leaders and developers and formed a taskforce to provide emergency relief changes in the Cook County Class 6b incentive and Class 8 incentives. Cook County industrial properties vacancy levels outpace the national average. Our task force provided significant changes in the Class 6b incentive and Class 8 incentives that will benefit the land owner in easing their real estate tax burden. The Cook County Board of Commissioners (the “County Board”) makes available certain tax incentive programs to eligible parties through Cook County Code Section 74-63.
The new amended law not only reduces the two year period from the same title owner to one year, it allows businesses operating in the same location for at least 10 years showing hardship “that without such designation the industrial enterprise would not be economically viable,” as long as not receiving any other County Incentives.
Temporary Emergency Economic Recovery Modification Program (TEERM)
The County Board has now instituted the TEERM Program for those properties which revises the prior two years vacancy with the same title owner and now would qualify for a Class 6b Incentive or Class 8 Incentive but have been “100% vacant for only one year” or more and won’t be purchased for value by a third party. Under the TEERM Program, these properties will need to obtain both municipal and County Board to activate the Incentive. Unlike other Class 6b Incentives or Class 8 Incentives, Incentives obtained under the TEERM Program will not be renewable. Under the proposed rules, to qualify for this program, an application will need to be filed with the Assessor’s Office by November 30, 2018.
Sustainable Emergency Relief (SER) Program
The proposed SER Program only relates to the Class 6b Incentive and not the Class 8 Incentive. The Cook County Board has proposed instituting the SER Program for those industrial properties that would not be considered “abandoned” by the local municipality or County Board but have received local municipal and County Board support that “special circumstances” are present to justify the property to be classified as “qualified” for the SER Program. To obtain this classification, an industrial enterprise (the “SER Applicant”) must show all of the following:
a) That it has occupied the subject property for at least ten years prior to the filing of the Class 6b Eligibility Application with Cook County.
b) That there is evidence of “hardship supporting a determination that participation in the SER Program is necessary for the [SER Applicant] to continue its operations at its current location and maintain its staff, and that without such designation the [SER Applicant] would not be economically viable causing the property to be in imminent risk of becoming vacant and unused”.
c) That it not receiving another Cook County property tax incentive for the subject property.
Class 6b Incentives obtained through the SER Program will not be eligible for renewals. The term of said Incentives will be the customary 12 years or when the SER Applicant vacates the property, whichever is sooner. After activating the Incentive, a SER Applicant will be required to file an annual report including a certification that it continues to occupy the subject property. During the term of the Incentive, the SER Applicant must also notify the Assessor’s Office if it vacates the property within 30 days of said vacation. Under the proposed rules, to qualify for this program, an application will need to be filed with the Assessor’s Office by November 30, 2018.
These programs are the Class 6b Incentive, which is for industrial properties, and the Class 8 Incentive, which is for commercial and industrial properties located within five townships These programs reduce a property’s taxes by 60% for the first 10 years of the Incentive, 40% for the 11th year and 20% for the 12th year.
To qualify for the Class 6b Incentive or Class 8 Incentive, a property must obtain municipal support and fall under one of the following categories:
- New Construction.
- Substantial Rehabilitation.
- Abandonment (100% vacant for two years with purchase for value by a third party).
A property may also obtain a Class 6b Incentive or Class 8 Incentive if it falls under the following category and obtains both municipal and County Board support:
- Abandonment with Special Circumstances (100% vacant for more than two years or 100% vacant for less than two years with a purchase for value by a third party).
Brian P. Liston, M.B.A. J.D. is president of Liston & Tsantilis in Chicago where he specializes in the area of eminent domain and property tax litigation. He has successfully tried numerous jury and bench property tax appeal hearings throughout the State of Illinois bringing successful resolutions to his clients. Liston has been on the team of 12 National Association for Industrial and Office Properties awards given for his legal work on incentives and land use projects throughout the Midwest. Recently his law firm was ranked number #1 by the Leading Lawyers Network in the State of Illinois by his colleagues in the legal field for land use.