Country club neighbors see hike in assessments, taxes

Country club neighbors see hike in assessments, taxes

CHAMPAIGN – Jimmy John Liautaud owns one of the largest and most glamorous homes in the neighborhood surrounding the Champaign Country Club.

Liautaud is chief executive officer of the Jimmy John's Gourmet Sandwich chain, with 855 shops nationwide. His huge, three-story house at 1002 W. Armory St. is an obvious reflection of his business success.

In most cases, that success would be viewed as a good thing. But when City of Champaign Township Assessor Brian Christie reassessed the country club neighborhood last spring, the assessed valuation on Liautaud's home was increased by 23 percent.

The new assessment values Liautaud's home at $1.7 million.

While Liautaud didn't file a property tax complaint last year, he's plenty unhappy. The higher assessment means his property tax bill, $31,706 last year, has risen to $39,988 this year.

"A 20 percent increase on any property in this market is an emotional increase, it's not a factual increase," Liautaud said. "I'm happy to pay, but in this market, it should be reduced."

Tax bills were mailed Friday to property owners, with payments due June 1 and Sept. 1.

Most of Liautaud's neighbors will be paying more, too.

Overall, assessments in the country club neighborhood, which includes portions of West Armory Street, Country Lane, Waverly and Greencroft drives, increased by an average 13.7 percent on property taxes payable this year. That's a bigger percentage increase than anywhere else in the city.

The assessment increases on individual homes varied widely, between a reduction of 22 percent where a homeowner filed a successful tax complaint, to an increase of 37 percent. Assessed value is supposed to represent one-third of market value.

Christie and his staff reassessed the country club neighborhood last spring, personally viewing and putting a value on 103 mostly high-end homes. It was the only neighborhood in the city to be comprehensively reassessed.

Christie ordered the move because sales figures in recent years showed assessments in the neighborhood were lower than the state-mandated one-third of actual value.

"We needed to revalue that neighborhood," he said.

Interviews with several residents show that some believe the assessment increases are unjustified – particularly given the current recession and general decline in housing prices. Others say they can live with the increase.

For his part, Liautaud said he believes his neighborhood is being singled out, following a July 24, 2007, article in The News-Gazette that questioned assessment levels there.

"It became a hot issue and they (township officials) felt pressure to raise it because the newspaper made it an issue," Liautaud charged. "They're in a political situation and that's how they keep their jobs."

Liautaud said he'll likely file a complaint with the Champaign County Board of Review this summer to try to reduce his property taxes for 2010.

New assessments for the 2010 tax year will be mailed to property owners in early July. Assessment complaints can be filed with the board of review between July 1 and Sept. 10.

Residents' reaction

Reactions to the assessment increases varied.

Peter Fox, 1118 W. Armory St., and Kyle Robeson, 1300 Waverly Drive, well-known local businessmen, said they can live with a higher property assessment and property tax bill.

"I personally think my wife and I will pay our property taxes (without filing a complaint) because we're happy to support our local schools," said Fox, who with his wife, Kim, paid $26,630 in property taxes last year. This year, the bill is $29,657.

His assessment on his main lot and house increased by nearly $30,000 on taxes payable this year. Fox also owns two adjacent lots, for a combined assessed market value of $1.2 million.

Robeson saw his assessment increase by $29,000, putting his home's estimated market value at $1.1 million. He paid $24,262 in property taxes last year and this year his bill is $26,534

"There's nothing you can do about it," he said. "I'll probably roll with the punch, like everybody else."

Robeson said that he had an appraisal done on his house a few years ago, and that the estimated value was close to his current assessment. "I know what it would cost to get it replaced, and that's about right," he said.

Michael Kulas, 1404 Waverly Drive, saw his assessment increase by $55,000, to a market value of $666,000. He bought the home in July 2005 for $730,000, but he thinks the value has likely declined due to the housing market. He paid $9,908 in property taxes last year. This year, the tab is $15,813.

"I would say if they did another assessment today, they'd come up with very different figures from whatever a house was worth a year ago," he said. "Our neighborhood went up a lot by Champaign standards, so it's probably got farther to fall. I would be stunned if I could sell it for that ($730,000) today."

Kulas said he bought the house because of its choice location, abutting the country club. The general manager of Volition Inc., a computer game company, Kulas said he's thinking about filing a tax complaint this year.

Larry Wingate, 1205 Waverly Drive, who lives in a more modest ranch on the edge of the country club neighborhood, believes his house is overassessed at an estimated market value of $322,000. He paid $6,249 in property taxes last year and his bill is $7,442 this year.

Wingate filed a complaint over his assessment last year and got the board of review to lower it from $118,000 to $104,000, which saved him about $1,000 in property taxes. He said he's likely to file another complaint this summer.

Wingate said his assessment went from $91,000 in 2007 to $118,000 last year until he got it reduced by filing the complaint. He said his house is "a 1950s ranch with the original kitchen in it."

"It's on the 50-cent side of the street," he joked, adding that the ranch has three bedrooms, two baths and an unfinished basement.

Wingate noted that he bought his house in 1999 for $185,000. The assessment increases since then are "realistic maybe in San Francisco, but not in Champaign," he said.

Appraisals valuable

A review of tax complaints filed last year shows that some residents in the country club neighborhood have found a method that almost invariably prompts the county board of review to reduce a property's assessment: an appraisal by a certified appraiser.

"As long as we consider it a valid appraisal, we honor it because the Illinois Property Tax Appeal Board will honor them, typically for two years," said Laura Sandefur, one of the three members of the county board of review that hears tax complaints.

Sandefur said the board of review checks to make sure an appraisal appears sound and valid. But she said she could think of only one certified appraisal that the board of review rejected last year, in the Clark Park neighborhood.

"When you have an appraisal that looks reasonably creditable, there's nothing you can do about it," she said. "We pretty much have to honor it."

Jim Webster, an Illinois general certified real estate appraiser and owner of Webster & Associates, 104 W. University Ave., U, said he thinks most upper-end homeowners would be well-advised to spend the $250 to $500 such an appraisal costs.

"There are a lot of assessments that are probably above the value, more so than ever," he said. "I think people are certainly well aware that appreciation hasn't been continuing. It's leveled off and it's debatable whether prices have declined, depending on price range and market."

A review of property tax complaints shows that of the 11 filed in the country club neighborhood, five included appraisals. In each of the five cases, the board of review granted assessment reductions, often substantial ones, including:

– James Bell, 18 Greencroft Drive, submitted an appraisal by Paul Sailor and was awarded a $49,000 assessment decrease.

– John Comet, 902 W. Armory St., submitted an appraisal by Karen Miller and received nearly a $47,000 assessment decrease.

– William McCabe, who formerly owned and resided at 1103 Country Lane, submitted an appraisal by Webster and received a $31,000 assessment decrease.

– Patrick Fitzgerald, 1212 Waverly Drive, also submitted an appraisal by Miller and received nearly a $26,000 assessment decrease.

With an overall property tax rate of $7.29 per $100 of assessed valuation in the country club neighborhood, every $1,000 decrease in assessment results in roughly a $73 savings in the property tax bill. That means an appraisal would pay for itself with about a $6,000 decrease in assessment.

Webster's appraisal of the former McCabe home at 1103 Country Lane raised some eyebrows on the board of review because the house sold a few months later for $75,000 more than the appraisal. He had estimated the value of the property at $575,000, while Christie had put the assessed market value at $654,000.

The former owners of the house put the house up for sale last year, asking $768,000, and they wound up selling it early this year for $650,000.

Webster defended his appraisal, saying: "There's a lot of variation and subjectivity. Different buyers look at different things. It's difficult for appraisers, assessors, buyers and sellers."

Christie agreed. An appraisal "is no different from what I do," he said. "It's an opinion of value. That's why we have a board of review and the (state) Property Tax Appeal Board, because there are different opinions of value on the same property."

Sales infrequent

A review of records for properties in the country club neighborhood shows that home sales there still are relatively infrequent, which Christie says makes assessing the neighborhood more difficult.

During 2009, there have been two recorded sales, the home at 1103 Country Lane and another at 1212 W. Armory St., which sold in February for $350,000, well below its assessed market value of $528,000.

The Armory Street home was purchased by a company, BC Enterprises, which appears to be making improvements to the house and listed it for sale again on March 7 for $695,000.

The two other most recent sales in the neighborhood date to 2006 and 2007.

In one of those sales, a home at 1101 Country Lane was sold for $350,000 in February 2007, slightly below the assessed value of $366,000 at the time.

That purchase was unusual in that the buyer later tore down an existing ranch home and built a new, larger home on the property, indicating the buyer was willing to pay a substantial premium for the land alone. The current assessment puts the market value of the land at 1101 Country Lane at $174,000, about half of what the buyer effectively paid for it.

But Christie said he doesn't think he should change the value of land throughout the neighborhood – properties are given a value for both land and the building – based on a single tear-down sale.

"A sale doesn't always make market value," he said. "People can pay way over market value if that's what they want."

A review of recent real estate listings shows that homes in the country club neighborhood are staying on the market for extended periods – 296 and 207 days in two instances as of mid-April – but that property owners are still asking for prices well above the assessed market value.

For instance, a home for sale at 1105 Country Lane was listed recently for $987,000 when its assessed market value is $709,000. A home at 59 Greencroft Drive was listed recently for $1.2 million, while the assessed market value is $772,000. A home at 16 Greencroft was listed for $439,000 while the assessed market value is $279,000.

About this report

For the third year in a row, reporters from The News-Gazette and advanced journalism students from the University of Illinois have worked together to produce projects to be published in the newspaper. Today, staff writer Mike Monson and UI student Elyse Schmidt reprise one of the original pieces produced for the partnership, examining property assessments in Champaign.

To check property values, you can go to the supervisor of assessments’ Web site at http://www.co.champaign.il.us/ccao/assessor.htm.

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