WATCHDOGS SPECIAL REPORT: PART 2 OF 2
READ PART 1: City couldn’t fight 98 percent of alderman’s tax appeal cases ruled on by state
Ald. Edward M. Burke is trying to get more than $11 million out of City Hall.
That’s how much he’s seeking from the city in property-tax refunds as the attorney for the likes of Oprah Winfrey’s Harpo Studios and Donald Trump, Commonwealth Edison and AT&T, a Chicago Sun-Times review of state and county tax records found.
In all, Burke’s law firm has 568 cases pending before the Illinois Property Tax Appeal Board. He is seeking a total of more than $55 million in refunds of property taxes that dozens of Chicago land owners have paid to the city and other taxing bodies.
It’s likely he’ll get back much less. But City Hall will be on the hook for about 20 cents of every dollar Burke wins.
This is the outside work that Burke only hints at each spring when he files a list of his law firm’s clients who do business with City Hall, in some cases directly with the City Council Finance Committee the 14th Ward alderman has chaired for three decades. It’s the conflict-of-interest filing required yearly of every Chicago alderman under the city’s ethics ordinance. Burke’s is always the longest.
He isn’t required to detail the work he does for his clients. But what he does is fight for them to pay less in property taxes. Often, if at first he loses or doesn’t get as big a reduction in their tax bills as clients want when he argues before the Cook County assessor’s office and the Cook County Board of Review, he keeps on fighting, seeking refunds of taxes that, by this point, they already have paid but still argue were excessive.
That’s when he ends up before the Property Tax Appeal Board, a body most people have never heard of — trying, as he is now, to win a collective $55 million in refunds from City Hall, the Chicago Board of Education, the Chicago Park District and other local governments.
On Sunday, the Sun-Times reported Burke was part of a 47-0 vote in the City Council in 2002 to sharply restrict City Hall’s ability to dispute such refund appeals. That forces the city to the sidelines, unable to challenge all but the biggest cases — those seeking a cut of at least $1 million in the assessed property value. In the decade since the restriction was passed, the city has been blocked from disputing 98 percent of the cases the state board decided involving Burke’s clients, who won tax refunds 92 percent of the time.
In all of that time, though, the amount the city has had to give back in tax refunds to Burke’s clients — a total of more than $600,000 — is only a fraction of the $11 million-plus he is currently seeking.
As a result of the resolution Burke helped pass in 2002, City Hall can challenge just 63 of the 568 pending tax-refund cases Burke filed — 11 percent. So far, Mayor Rahm Emanuel’s Law Department has objected to 46 of them, fighting appeals seeking refunds of as much as $23.3 million.
City officials say that even when they can’t contest an appeal to the state for a tax refund, they still benefit if another government body does — like the Chicago Board of Education. The Board of Ed challenges less than half of Burke’s cases. Other taxing bodies rarely do.
When City Hall files a challenge, the alderman and his law firm, Klafter & Burke, step aside. Burke says his firm will withdraw from any case challenged by City Hall. Those cases have typically ended up with Deutsch Levy & Engel, a law firm whose offices are across the hall from Burke’s firm and for which he once, more than 20 years ago, served in an “of counsel” position.
Fact Box: The Burke files
These are some of the clients that Ald. Edward M. Burke has represented in past cases before the Illinois Property Tax Appeal Board that he also is fighting for in cases now pending before the state body. All involve property in Chicago for which Burke is seeking a refund of property taxes he argues were too high.
1320 N. State Street Apartments
◆ Pending: 2 appeals:
2007 — seeking a 5% tax cut, equating to a refund of about $25,690
2008 — seeking a 5% cut, about $25,948
◆ Past: Burke has been appealing the property assessments on this co-op for about 10 years. He won refunds totaling $149,475 on the building’s 2003, 2004 and 2006 tax bills. City Hall initially objected to the 2004 appeal but dropped that challenge five months later. saying it’s city policy not to challenge residential cases. “We did price comparisons with other law firms. His fee is very similar” — about 30 percent of the savings, says Nancy Spain, the co-op’s president. “He seems to have reduced the taxes. He’s done a good job.”
Avis Rent A Car at O’Hare Airport
◆ Pending: 3 appeals:
2009 — seeking a 70% cut, about $216,067
2010 — seeking a 71% cut, about $225,473
2011 — seeking a 51% cut, about $162,046
◆ Past: Avis — which has a long-term lease with City Hall to operate on city-owned airport land — is a longtime Burke client. The alderman’s law firm got the state agency to give the company an $11,210 refund on its 2007 property taxes. City Hall is fighting the 2009 and 2010 cases. Burke has stepped aside in those cases, turning them over to the law firm Deutsch Levy & Engel. In the 2011 case, Burke is seeking an assessment reduction of $999,999. Under a 2002 measure Burke helped pass, the city can’t challenge anything below $1 million.
AT&T, 10 S. Canal / 9 S. Clinton
◆ Pending: 3 appeals:
2009 — seeking a 39% tax cut, about $1,301,151
2010 — seeking a 39% tax cut, about $1,357,796
2011 — seeking a 39% tax cut, about $1,352,149
◆ Past: AT&T is a City Hall contractor and longtime Burke client. He has gotten the company more than $1.9 million in refunds on this property for 1997, 1998, and 1999 tax years. City Hall is protesting the 2009 and 2010 cases.
Renaissance Chicago O’Hare Hotel, 8500 W. Bryn Mawr
◆ Pending: 2 appeals:
2009 — seeking a 68% cut, about $1,035,895
2010 — seeking a 17% cut, $200,091
◆ Past: By filing appeals with the county and state, Burke has steadily gotten the tax bill for this hotel down from nearly $2 million in 2007 to $1.1 million last year. Two appeals to the state resulted in refunds totaling $297,215 for 2007 and 2008. Burke has turned over both pending appeals to Deutsch Levy & Engel.