For J.B. Pritzker, mansion’s disrepair has saved $230K in taxes
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J.B. Pritzker, billionaire would-be governor, bought the historic mansion next door to his even bigger home on Chicago’s Gold Coast, let it fall into disrepair — and then argued it was “uninhabitable” to win what so far have been nearly $230,000 in property-tax breaks, records show.
Pritzker, his wife and their two children live in a palatial, three-story home in the Gold Coast with more than 12,500 square feet of living space and a two-story coach house. They bought that for $14.5 million in May 2006 and spent an additional amount fixing it up — between $11 million and $25 million more, records show.
Then, when the smaller mansion — designed in 1894 by the fabled architectural firm of Holabird & Root — went on sale, they bought that, too, paying $3.7 million.
Retired banker Burton Gordon and his wife had lived in the 6,387-square-foot home for more than 40 years before selling it to the venture capitalist who’s now seeking the Democratic nomination for governor.
Pritzker refurbished the outside of the Federal-style home, where the Gordons raised their family. But the inside has fallen into disrepair. The toilets have been disconnected, and the home has “no functioning bathrooms or kitchen,” according to documents Pritzker’s lawyers filed with the office of Cook County Assessor Joseph Berrios.
Arguing that the smaller mansion is “vacant and uninhabitable,” those lawyers convinced Berrios to slash its assessed value last year from $6.25 million to just under $1.1 million.
That’s allowed Pritzker to get the nearly $230,000 in property-tax breaks and refunds, a Chicago Sun-Times analysis found.
The drastically reduced assessment caused the mansion’s property taxes to plunge 83 percent, leaving Pritzker with a bill for $19,719 last year, the analysis found. That was instead of the $117,087 he otherwise would have had to pay in property taxes, which fund the Chicago Public Schools, the city and other local governments.
The assessor’s ruling also meant that Pritzker was due partial refunds on the taxes that he paid between 2012 and 2014. He got three refund checks last year totaling $132,747 — money that reduced the amount of property taxes that schools and other local governments expected to receive.
Separately, Berrios cut the assessment on the bigger mansion where the Pritzker family lives — from $14.1 million to about $12.1 million, resulting in a 16 percent lower property-tax bill last year — $221,287 rather than $264,221.
The assessor based his decision on an appraisal done by a company hired by the billionaire, who refused to let the appraisers inside the home out of concerns for the security of his family.
And Berrios agreed to keep the lowered assessments on both homes in place again this year. That means Pritzker will save additional taxes this summer, when county officials finish tabulating the current tax bills to determine how much every homeowner and business will pay to fund local governments.
Pritzker, who recently put $7 million of his own money into his campaign fund, wouldn’t talk about the two mansions.
Instead, his campaign spokeswoman Galia Slayen responded with a written statement regarding the tax cut on his residence, saying that resulted from a “routine appeal,” available to any homeowner. But she didn’t answer why Cook County should grant Pritzker tax breaks on a mansion he has left “vacant and uninhabitable.”
Pritzker is one of four Cook County homeowners in the running to be the Democratic challenger to face Republican Gov. Bruce Rauner in the November 2018 general election.
Pritzker’s Democratic opponents from Cook County — state Sen. Daniel Biss of Evanston, businessman Christopher Kennedy of Kenilworth and Chicago Ald. Ameya Pawar (47th) — haven’t appealed the assessments Berrios gave their homes, so they haven’t gotten any tax cuts.
Rauner, a venture capitalist like Pritzker, hasn’t filed any appeals with Berrios over his Winnetka mansion. But Berrios did get an appeal from the condominium association for a downtown Chicago high-rise where Rauner owns a unit. But Berrios didn’t change his assessment on Rauner’s condo, so the governor didn’t get a tax break.
Berrios, who is also chairman of the Cook County Democratic Party that’s working to unseat Rauner next year, didn’t know Pritzker owned the Gold Coast mansions when his staff cut the assessments and, as a result, Pritzker’s taxes, according to his spokesman Tom Shaer.
Pritzker’s name isn’t mentioned in the documents the assessor’s office released for the mansions. Both are owned by a limited liability company managed by Thomas Muenster, whose sister is Pritzker’s wife. But the Pritzker campaign acknowledges that the LLC is owned by a trust for Pritzker. Muenster and the law firm Schmidt Salzman & Moran filed the appeals with Berrios.
Berrios agreed to cut the assessment on Pritzker’s 113-year-old home based on sales of nearby homes as well as the appraisal from Renzi & Associates, whose appraisers weren’t allowed inside. Renzi’s 2015 appraisal found the mansion is worth $11 million — about $3.5 million less than the company paid for it nine years earlier.
“We relied on the provided information to judge the quality of the interior improvements, number and types of rooms, finishes and any special property features,” Renzi noted in the appraisal given to Berrios. “It is an extraordinary assumption that the provided information was accurate and complete enough to validly assess the interior quality and features. The use of this extraordinary assumption could affect the assignment results if it proves to be contrary to the truth.”
Security concerns were the reason the Pritzkers wouldn’t allow the appraisers inside their home, according to his campaign, which says this isn’t unusual and notes that the appraiser was given photographs of the interior, including the basement spa and third-floor playroom. And the photos were included in the appraisal submitted to Berrios.
Both mansions were part of a massive renovation project, whose costs escalated from $11 million to $25 million, according to a lawsuit filed by a contractor who was awarded nearly $1 million in 2013. The Pritzkers had complained the work was shoddy and overpriced. It’s unclear how much work was done at the empty mansion.
In seeking a lower assessment for the vacant mansion, the LLC submitted the appraisal with photos of the disconnected toilets lined up along a wall, as well as an affidavit from Christine Lovely, an employee of Pritzker’s wife, who asserted the mansion was unfit for occupancy.
According to Shaer, plumbing problems, water damage and deferred maintenance led Berrios to lower his assessed value. One of Berrios’ appraisers inspected the home last fall and wrote that it has been “uninhabitable’’ since January 2012 — the finding that led to the lower current and future property-tax bills and partial refunds on taxes already paid.
Berrios originally set the mansion’s value at $6.3 million in 2015. But Pritzker’s lawyers convinced him the home was worth just $2.5 million and that the assessment should be cut to $968,000 because it’s vacant. Berrios lowered his assessment to slightly less than $1.1 million last year and this year.
Shaer says Berrios is continuing the county’s longstanding policy of lowering assessments on vacant homes deemed uninhabitable because that “encourages rehab” by providing homeowners and contractors with tax breaks.
Pritzker’s campaign says he plans to rehab the vacant mansion someday.