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02/03/88 In Re Application of the County Treasurer and Ex Officio

February 3, 1988

IN RE APPLICATION OF THE COUNTY TREASURER AND EX OFFICIO


APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

COUNTY COLLECTOR OF COOK COUNTY (County Collector of

Cook County, Applicant-Appellant, v.

Ford Motor Company, Objector-Appellee)

519 N.E.2d 1010, 166 Ill. App. 3d 373, 116 Ill. Dec. 795 1988.IL.124

Appeal from the Circuit Court of Cook County; the Hon. Robert J. Dempsey, Judge, presiding.

APPELLATE Judges:

JUSTICE FREEMAN delivered the opinion of the court. WHITE, P.J., and RIZZI, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE FREEMAN

Applicant-appellant, the county collector of Cook County (Collector), appeals the trial court's finding that its assessment of real property owned by objector-appellee, Ford Motor Company (Ford), was constructively fraudulent as being excessive. The Collector asserts that Ford failed to prove by clear and convincing evidence that its assessment was constructively fraudulent. The Collector further asserts that the trial court committed reversible error by considering as evidence prior settlements and a subsequent assessment which were outside the record.

For the reasons stated below, we reverse the judgment of the circuit court which found the original assessment fraudulent.

The evidence at trial indicated the following. Ford paid real estate taxes for 1981 under protest for its real estate located at 1000 East Lincoln Highway, Chicago Heights, Illinois. The real estate covers approximately 133 acres and is improved with an automobile stamping plant. The assessor of Cook County (Assessor) assessed the subject property as of January 1, 1981, in the sum of $13,626,634. The assessment corresponds to a market value of the property of $34,066,585. The Ford property is a class V parcel under the Cook County Real Property Assessment Classification Ordinance and is assessed at 40% of fair market value. Ford paid under protest $1,783,381.49 in real estate taxes on the stamping plant for 1981, claiming that the assessment was excessive and void. Ford asserted at trial that the correct market value of the stamping plant was $19.5 million.

John Shanahan, a certified real estate appraiser, testified at trial as Ford's expert witness. Shanahan made a formal inspection of the Ford property on November 17, 1980. Shanahan gave his opinion of the value of the plant based on his utilization of the three standard appraisal approaches to value -- cost, income, and market data. The cost analysis resulted in a valuation of $20,730,000. This value was the result of estimating the reproduction cost of the building as of the date of appraisal, deducting therefrom accrued depreciation, and adding the value of the land. The income approach resulted in a valuation of $17,870,000. This approach involves an estimate of rental income from the property, which estimate is utilized to develop an opinion of value regarding an income stream over the foreseeable future. Shanahan stated that he placed the least reliance on this approach to value since most properties the size of the Ford plant are owner-occupied and therefore do not produce rental income.

The market data approach resulted in a valuation of $19.5 million. The market data approach seeks to find sales of properties that are as similar to the subject property as possible and adjust the sales for variances in time of sale, location and physical characteristics of the property, and financial conditions of the sales. Then the data is reduced to a unit of comparison, such as price per square foot of building area. Shanahan gave the most weight to this approach in arriving at his valuation of the property.

Shanahan stated that while his appraisal is dated November 17, 1980, each of the three valuation amounts he arrived at regarding the property was effective both as of November 17, 1980, and as of January 1, 1981, the date pertinent to the instant case. After considering all three approaches to valuation, Shanahan ...


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