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URBANA — Former Cunningham Township Assessor Joanne Chester was "dead wrong" when she assessed the full values of four key Carle properties more than a decade ago, one of Carle's attorneys contended at a lengthy court hearing Thursday.

Not only that, Steven Pflaum argued, Chester wasn't aware that the assessments would end up in the loss of tax exemptions on those properties when she placed values on them.

Carle could prove it was legally entitled to the property-tax exemptions it lost for several past years, Pflaum said, "but we shouldn't have to."

His arguments — and those from attorneys representing state and county taxing authorities — were raised in the hearing before Judge Randy Rosenbaum, which ended with the judge taking it all under advisement.

He'll likely issue a written ruling at an unspecified later date, he said.

What Rosenbaum is deciding is a motion originally filed by Carle last August seeking a judgment that would effectively open the door to it receiving refunds on property taxes it paid from 2004 to 2011 on four Urbana properties — Carle Foundation Hospital at 611 W. Park St., as well as its facilities at 809 W. Park St., 503 N. Coler Ave. and 607 N. Orchard St.

Carle paid $20.7 million in property taxes to local governments under protest on those properties.

The exemptions were restored for 2012 and beyond, courtesy of a new state law redefining how hospitals qualify for charitable exemptions — though Carle has continued to pay a reduced amount of taxes on 611 W. Park beyond 2011, according to the county treasurer's office.

Carle is basing its latest argument for a refund on what it calls the failure of local taxing officials to continue to recognize the exemptions that had formerly been on the four properties.

Pflaum contended that no government officials intended to terminate the exemptions on the four properties, though all four wound up being assessed at their full fair market value as if they hadn't been previously exempt.

Also at issue is Carle's contention that the Department of Revenue never actually made a final determination in 2007 to revoke the tax exemptions for two prior tax years — 2004 and 2005 — a point with which David Buysse, deputy chief of the public interest division at the Illinois Attorney General's Office, takes issue.

The Department of Revenue denied exemptions on all four properties in 2007 based on its finding that they were neither in exempt ownership nor exempt use, he said.

Buysse said it didn't matter what Chester's intentions were because only the Department of Revenue had the authority to make a final determination on the exemptions.

What triggered Chester to place a value on Carle's properties in 2004 was new construction on the Carle campus.

That was viewed as a change of use that would legally prompt a new look to see if the construction could be considered exempt or non-exempt from taxes, according to Champaign County Assistant State's Attorney Joel Fletcher.

While the Department of Revenue had the last say, Chester had the right to assess the property if she believed there was a change in use, Fletcher said.

"She can't break into (Carle's) building and rifle through the files," he said.

Fletcher further argued that Carle waited an unreasonable amount of time to bring its claim based on a wrongful failure of taxing authorities, and that the delay caused an unfair damage to taxing districts. The loss to the county alone, should Carle prevail, would be more than $1.4 million, he said.

Fred Grosser, the attorney for the township, township assessor and Urbana, said Chester had learned in 2003 from the Department of Revenue that she hadn't been properly assessing properties that had previously been determined to be exempt or partially exempt and, based on that, made a change in her procedures.

One of the problems with Carle's claim is that none of the four properties had been in exclusive charitable use, and they'd qualified only for partial exemptions, he said.

Pflaum described the series of events as "a gotcha."

Carle shouldn't have had to file applications for exemptions in 2004 because, he said, "we don't believe they ever expired."

Filing the applications was the only recourse Carle had at the time, he said, and then taxing authorities, in effect, said they had to make a determination on the exemptions because applications had been filed.