Hoffman Estates' finance committee has recommended approval of a pair of settlements that would temporarily lower Cook County's assessed values for both the former AT&T corporate campus and the Sears corporate campus.
While the settlements would immediately lower the owners' share of local government property taxes, village officials say they are based on evidence that the property owners likely would prevail in seeking refunds later.
While the county's assessed value of $56.6 million for the former AT&T property equates to an expected market value of $226.6 million, it was for less than a tenth that amount -- $21 million -- that New Jersey-based Somerset Development purchased it in March for an ambitious redevelopment project.
Patti Cross, assistant corporation counsel for Hoffman Estates, said the primary motive for such agreements is that they save both sides litigation costs and avoid potential tax refunds, especially when evidence indicates the assessments are unrealistically high.
The settlement between the village and Somerset would be valid for 2019 alone and remains subject to the approval of the Cook County Board of Review. It takes into account the recent sale price, the fact that the property has remained vacant for the entire year and the provisions of the redevelopment agreement, leading to an assessed value of $11.1 million.
By better reflecting the market value of the property, the settlement aims to avoid triggering a section of the redevelopment agreement designed to ensure the owner pays a fair and equitable tax bill and prevent future property tax refunds, village officials said.
With the first phase of interior construction on Somerset's Bell Works "metroburb" of offices, restaurants, stores and entertainment venues recently approved, the village and developer plan to revisit the property's assessed value next year.
In the case of the Sears property settlement, the parties include the village, Algonquin-based Community Unit District 300 and owner TF Hoffman Estates IL LLC.
The property's current assessed value of $93.4 million equates to an expected market value of $381.7 million. But the value of the property historically has been contested, with significant refunds having been paid to Sears.
With recent appraisals estimating its market value between $39.8 million and $59.4 million, the parties agreed to a market value of $50 million and an assessed value of $12.2 million. If approved by the Cook County Board of Review, the agreed value would last through 2021.
The village board is scheduled to vote on both agreements Monday, Dec. 2.