Tax Relief for Billionaires

Property Taxes and the Pritzker Family

UNITEHERE! Released March 1, 2012

Elliott Mallen, Research Analyst emallen@unitehere.org / 312-656-5807

An investigative report by

Tax Relief for Billionaires: Property Taxes and the Pritzker Family

cions of the billionaire Pritzker clan, Chicagos richest family and the fifth wealthiest family in America,1 have routinely obtained local property tax reductions on their multi-million dollar Chicago residences, availing themselves of legal loopholes to lower their property assessments by as much as 62 percent. UNITE HERE reviewed property tax records of the Gold Coast and Lincoln Park residences of key members of the Pritzker family who control Hyatt Hotels Corporation, including Tom Pritzker, Penny Pritzker, Nick Pritzker, and Gigi Pritzker Pucker, as well as Hyatt Hotels Corporation CEO Mark Hoplamazian. The residences include several modern and historic mansions, co-op apartments facing Lincoln Park, as well as a couple of relatively modest pied-a-terre condos and a residential property that appears to be used by a Pritzker family foundation run by Tom Pritzkers wife, Margot.2 In 2011, the properties had an estimated combined market value of $20.4 million, according to the Cook County Assessors office (see Appendix 1 for full property list).3 Their collective 2010 tax bills payable in 2011 totaled roughly $324,000.4 Since 2003, the properties owners have appealed the assessed value of those properties at least 70 times. Twentyeight of those appeals yielded a reduction in assessed value. Twelve of those appeals covering five properties are still pending.

Estimated combined market value of subject properties in 2011, according to the Cook County Assessor.

$20.4 million

Scions of the billionaire Pritzker clan, Chicagos richest family and the fifth wealthiest family in America, have routinely obtained local property tax reductions on their multi-million dollar Chicago residences.

$344,053
Estimated tax revenues lost due to appeals on subject properties from 2006 to 2010

Appeals filed to lower the assessed value of subject properties since 2003

70

At least

An estimated $344,000 in tax revenue has been lost from 2006 to 2010 due to appeals on these properties. This is assuming that the properties owners paid the general city tax rate as reported by the Cook County Clerk, and that without appeals they would have paid taxes based on the properties original assessed value as determined by the Cook County Assessor.

Appeals currently pending before the Illinois Property Tax Appeals Board

12

Tax Relief for Billionaires: Property Taxes and the Pritzker Family

Property taxes in Cook County

Residential property taxes are based on a propertys assessed value, which is generally determined to be 10 percent of the propertys market value. Properties in Cook County are assessed every three years by the Cook County Assessor. Property owners in Cook County have three opportunities to appeal their property assessments annually. An owner can appeal his or her assessment directly with the Cook County Assessors office. A complaint can additionally be filed with the Cook County Board of Review (BOR), a three-member elected body. The third step is the Illinois Property Tax Appeal Board (PTAB), a state-level body where an owner can appeal a ruling by the BOR.5 Property taxes support Chicagos schools, parks, and libraries. In 2010, 52 percent of the typical Chicagoans property taxes went to the Chicago Board of Education. Penny Pritzker is one of seven members of the Chicago Board of Education. Her husband, Bryan Traubert, is the President of the Chicago Park District Board of Commissioners.

Pritzker Family Residences

from luxurious

Penny Pritzkers house

Nick Pritzkers house

Penny Pritzker
Penny Pritzker began developing her modernist Lincoln Park mansion, which the Chicago Tribune described as a rectangular slab of tobacco-colored stucco stacked between two boxes of glass with a frontage the width of half a football field ten years ago. She assembled four parcels in Lincoln Park in 2002 and 2003 at a cost of $7.05 million. The existing structures were torn down, and a 8,422 square foot house was built at a reported estimated cost of $3.4 million, bringing the total cost of the new home completed in 2007 to at least $10.4 million. The property is held in the name of Orchard Street Land, LLC, which is registered at the Hyatt Center and managed by Pritzker family insider Ron Wray. Property tax bills have been sent to her business associate John Kevin Poorman. Penny Pritzker and her family are registered to vote at the property. Attorneys fought to lower the assessments ten times from 2006 to 2010 at all three levels of the appeals process, including filing appeals every year with the Assessor from 2006 to 2009, and every year with the Board of Review from 2007 to 2010. Such persistence has yielded reduced assessments every year from 2006 to 2009, including a 62 percent reduction in 2006 and a 42 percent reduction in 2009 (see chart below).6 An examination of the propertys 2009 appeals demonstrates how persistence can pay off.

Tom Pritzker & Gigi Pritzker Puckers Co-op

to mundane:

Tom Pritzkers former condominium

Gigi Pritzker Puckers condominium Source: Cook County Assessors website

Tax Relief for Billionaires: Property Taxes and the Pritzker Family

If at first you dont succeed, try again, and again, and again
In 2009, the Cook County Assessor re-assessed the property at a market value of $9.6 million. An appeal arguing that the property was assessed at a higher value per square foot than comparable properties was filed with the Assessors office. In denying the appeal, the Assessors office acknowledged that although this value is not uniform with other properties in the area, it is a unique property and was valued as such. After failing to secure a reduction from the Assessor, an appeal was filed with the BOR. The new appeal used the same argument as the failed appeal to the Assessor, but succeeded in securing a reduction in the propertys aggregate assessed value from $963,871 to $558,484, or a decrease of 42.1 percent. Even when appeals to the Assessor were successful, appeals have been filed at the subsequent steps to seek deeper reductions. In 2007 and 2008, reductions were won from the Assessor and/or BOR, and appeals were still filed with the PTAB seeking additional reductions in assessed value. The propertys appeals for its 2007 and 2008 assessments are pending before the PTAB.7 If appeals with the PTAB are successful, the refund could come at the expense of the Chicago Board of Education and other public agencies.

Market Value at 1875 N Orchard Before and After Appeals

Driving Down Value

Assessed Value Before and After Appeals

1875 North Orchard St.

Not missing a beat: Tom Pritzker and Gigi Pritzker Pucker

Tom Pritzker and Gigi Pritzker Pucker both live in a historic cooperative overlooking Lincoln Park.8 Tom Pritzker and Gigis husband Michael Pucker each reside in a two-story duplex comprising a 1/17th share of the co-op.9 The building has appealed its property taxes at least fifteen times since 2003. The building has won reductions for four of the past nine years, including a reduction of 27 percent in 2009. Three appeals are pending with the PTAB. The Chicago Board of Education intervened in the buildings 2003 and 2005 appeals with the PTAB. Tom has benefited from efforts to drive down the assessed
4

Tax Relief for Billionaires: Property Taxes and the Pritzker Family

value of his former nearby small and relatively inexpensive condominium. Tom Pritzker owned a unit in the Gold Coasts Carl Sandburg Village development, which he sold in September 2011 for $240,000. From 2003 to 2011, seven appeals were filed with the Assessor and BOR, yielding a 4.5 percent reduction in value in 2009 and a 13.1 percent reduction in 2010.10 His 2010 tax bill was less than $4,000. Gigi Pritzker Pucker and her husband purchased a condo on nearby Saint James Place in 1994 for $49,000. Since 2003, two unsuccessful attempts to lower the assessment have been made since 2003. The propertys 2010 tax bill was $3,362.

Persistent and pervasive tax appeals

Nick Pritzker11 and the late Robert Pritzker12 have sought and secured reductions in the value of their homes in the Gold Coast and Lincoln Park from the Assessor and/or BOR. Nick Pritzker has appeals pending over his 2009 and 2010 assessments with the PTAB. Hyatt Hotels Corporation CEO Mark Hoplamazian has also persistently fought to lower the assessment to his house, which he purchased for $8 million and which shares an alley with Penny Pritzkers residence. Hoplamazians attorney has filed eight appeals since he bought the property in 2004. He won a 3.7 percent reduction from the BOR in 2006, a 26.0 percent reduction from the Assessor in 2009, and a 12.5 percent reduction from the BOR in 2010. He is further appealing his 2006, 2009 and 2010 assessments with the PTAB.

An alternative: J.B. Pritzker

J.B. Pritzker has set himself apart from his sister Penny and cousins Tom and Gigi. He purchased and restored a mansion spanning three parcels in the Gold Coast in 2006 and 2007 for $18.2 million. His 2010 property tax bill nearly $300,000 exceeded the combined property taxes paid by Penny, Nick and Robert Pritzker at their primary residences. As of late February 2012, he has yet to appeal his property assessments.

Tax Relief for Billionaires: Property Taxes and the Pritzker Family

Appendix 1: Property Data

Property assessment appeals at Pritzker-affiliated residential properties, 2003-2011

Property Orchard Street Land, LLC Nick Pritzker Robert Pritzker Tom Pritzker Landlubbers, LLC Mark Hoplamazian Gigi Pritzker Pucker Tom Pritzkers 1/17th share Gigi Pritzker Puckers 1/17th share Type Address 2010 Tax bill 2011 Estimated Market Value Estimated cumulative tax savings, 2006-2010 $175,904.80 $35,293.78 $34,871.68 $1,029.23 $4,447.26 $92,507.05 N/A N/A Successful attempts 5 4 6 3 2 3 0 5 Appeal attempts Pending attempts 2 2 0 0 2 3 0 3

House House House Condo Twoflat House Condo Co-op Co-op

1875 N Orchard 1518 N Astor 1740 N Cleveland 1360 N Sandburg 2141 N Southport 1900 N Howe 455 W Saint James Pl 2430 N Lakeview 2430 N Lakeview

10 12 11 7 5 8 2 15

$90,878.18 $63,657.39 $59,895.22 $3,983.11 $12,622.28 $90,362.79 $3,362.35 N/A N/A

$5,584,840.00 $3,912,010.00 $4,079,320.00 $244,780.00 $775,690.00 $5,601,650.00 $206,630.00 N/A N/A

See above

Totals

70

28

12 $324,761.32

$20,404,920.00

$344,053.80

(Endnotes)
Richest families on the Forbes 400, Forbes, 9/21/2011. The propertys address 2141 N Southport matches the contact information on the website of Womenoncall.org, Margot Pritzkers charitable organization. 3 Aggregate data gathered from Cook County Assessors website. 4 Aggregate data gathered from Cook County Treasurers website. 5 For details on the appeals process, see The Cook County Property Assessment Process: A Primer on Assessment, Classification, Equalization and Property Tax Exemptions, published by the Civic Federation 4/5/2010. 6 Records accessed from Cook County Assessors and Cook County Board of Reviews websites. 2006 and 2008 reductions came at Assessor level, 2007 reduction came from both Assessor and Board of Review. 7 A reduction of 24.2 percent on 2007 assessment and 25.6 percent on 2008 assessment are sought. 8 Tom Pritzkers family and Gigi Pritzker Puckers family are registered to vote at the building. 9 Appraisal of 2430 North Lakeview Avenue dated as of 1/1/2009, prepared by SAS Inc. and included in 2009 appeal to the Cook County Assessor, p. 29. 10 2009 reduction came from Board of Review, 2010 reduction came from Assessor and Board of Review. Appeals for Tom Pritzkers condo were not filed directly by him or his attorney, but were filed by the condo association on behalf of a number of condo owners. 11 Unsuccessful appeals were filed with the Assessor four times, with the BOR successfully twice and unsuccessfully once, and unsuccessfully with the PTAB three times. 12 The three parcels assessments have been appealed with the Assessor 19 times (9 successfully, 11 unsuccessfully) and BOR 12 times (6 successfully, 6 unsuccessfully). 1 2