Kaegi hits Trump Tower with big tax increase a year after slashing its taxes
The Cook County assessor says the value of the downtown skyscraper’s mostly vacant retail space is 68% higher than it was last year — when he lowered its value by 37%.
A year ago, former President Donald Trump got a $330,000 tax break after Cook County Assessor Fritz Kaegi slashed the value on the largely vacant retail space at the Trump International Hotel & Tower by 37%.
This year, Trump’s property taxes are likely to skyrocket because Kaegi now says the storefronts are worth 68% more than the value he placed on them last year.
Exactly how much Trump’s taxes will soar won’t be known until well after the June 28 primary election, in which Democrat Kaegi is facing a challenge to his bid for a second term from Kari Steele, president of the Metropolitan Water Reclamation District of Greater Chicago.
Kaegi says raising the value of the mostly vacant space — and, as a result, the former president’s taxes — isn’t an election-year gimmick to help get him votes. The assessor says it’s part of his broader plan to raise property values on commercial property so their owners cumulatively pay a greater share of property taxes in Cook County compared with what homeowners pay.
“The increase of the value of Trump Tower by my office is consistent with other similar properties in that neighborhood and reflects a more equitable approach to assessing both residential and commercial properties under my administration,” Kaegi says in a written statement. “No longer will homeowners or small businesses end up paying more due to systemic under-assessment of large commercial properties like Trump Tower.”
Over the past four years, the property taxes on the skyscraper’s stores along the Chicago River have gone up and down like a roller coaster at Six Flags Great America.
With the assessments set by then-Cook County Assessor Joseph Berrios, Trump paid $347,630 in property taxes in 2018 and $496,927 in 2019, successfully arguing against higher taxes by noting the space was largely vacant.
The bill rose to slightly more than $1 million in 2020 because Kaegi’s office denied Trump’s request for a vacancy discount that year, saying he “did not submit sufficient evidence to support their claim of vacancy.”
Kaegi did give Trump a vacancy break last year — a 37% cut in the assessment that originally had been set by Berrios. That slashed last year’s tax bill to $698,399.
This year, for the first time in three years, Kaegi’s staff is reassessing every property in the city of Chicago, including Trump Tower, and says that new look led to the higher assessment.
Kaegi had put a value of $12.5 million on Trump’s stores last year.
This year, he proposed more than doubling that, increasing his estimate of its value to $25.8 million.
Trump’s lawyer Patrick McNerney countered by submitting an appraisal that said the space is obsolete and worth no more than $13.2 million.
“Nothing has occurred since the assessor’s December 2020 decision to support a 106% increase in value,” McNerney wrote. “Occupancy hasn’t changed, there are no new tenants . . .”
Kaegi then agreed to cut his estimate of the property’s value, though nowhere near as much as Trump wanted, putting the figure at $21 million.
McNerney has appealed, asking the Cook County Board of Review to lower Kaegi’s estimated value. The Board of Review has rejected Trump’s past four appeals to lower the assessment on the empty stores.
McNerney’s appeal includes documents showing Trump made less than $200,000 on the space last year, leasing only two spots there: 3,200 square feet to a hair salon and a small dock on the Chicago River to Wendella Tours & Cruises.
McNerney didn’t return messages seeking comment.
Trump has long contested the value of his skyscraper’s three-level retail space, which is nearly 74,000 square feet. Since the building opened in 2008, the space has remained 95% vacant, with appraisers arguing that retailers have shunned the space for reasons including its location on the north side of the river while the popular Riverwalk is on the south side.
The lawyer Trump initially hired to handle the property tax appeals, Ald. Edward M. Burke (14th), submitted an appraisal that said the space was worth nothing in 2011.
Burke appealed the case to the Illinois Property Tax Appeal Board, which ruled last year that Trump was entitled to a $1 million refund from various taxing bodies for 2011.
The big loser would be the Chicago Board of Education, which would lose about $500,000 if that ruling holds up. The Cook County state’s attorney’s office is fighting the decision before the Illinois Appellate Court.