Brookfield being sued over Boston Store property taxes City, Bonstores Realty in litigation over 2009-12 assessments

Brookfield and Bonstores Reality One, owner of Boston Store at Brookfield Square Mall, are bumping heads over property taxes. The retail giant filed a Claim for Excessive Assessment and a refund for a portion of the 2012 property taxes paid to the city for its location at the mall. According to the claim, the property was assessed at $23.6 million by the city for the tax year 2012. Bonstores appealed the assessment, contending that the fair market value for the property as of Jan. 1 2012 was $15.7 million, a difference of $8 million. "The city of Brookfield assessor made jurisdictional errors in the valuation of this property," the claim reads. "These errors include consideration of improper sales and rental comparables and improper consideration of the purchase price and rental rate of the subject property established in a non-arm's length transaction." Robert Scott, director or finance for the city, said Robert Lorier, the city assessor, has more than 35 years of experience, and has been recognized by the state in the commercial assessment area. "I am confident the value that was placed on the property is fair and equitable in accordance with the law," Scott said. Lorier was not available for comment. Bonstores paid its first installment of the $391,230 tax bill - $195,600 - on time, but said that amount was $65,570 more than it should have been, the claim said. "Should the city of Brookfield fail to grant this claim by July 31, Bonstores will be required to pay the second installment of an additional $195,600, resulting in total damages of $131,140," Bonstores said in the claim. The assessment appeal was denied at the Board of Review, and the company filed a claim thereafter. The claim was denied at the city's Finance Committee meeting Feb. 19, and the resolution denying the claim was passed by the Common Council the same evening. "The city's legal counsel in the assessment litigation has advised the city should deny the claim," a memo by Robert Scott, director of finance, said. "The city will then look to add the 2012 claim to the existing lawsuit for the 2009, 2010, and 2011 assessments." The city and Bonstores are in litigation in Waukesha County Circuit Court regarding the assessments for the past four years. A trial scheduled for March was delayed at the request of Bonstores due to one of its key witnesses being unavailable. Scott said Claims for Excessive Assessments are rare in Brookfield. "I've been here 13 years and this is the largest claim I've ever seen," Scott said. Bonstores Realty filed a similar lawsuit against the city of Wauwatosa in Milwaukee County Circuit Court in 2011 for 2009 and 2010 property assessments, and the assessments were upheld. The company also filed Claims of Excessive Assessments for its other Boston Store properties throughout the state, including in Racine and Eau Claire, during the same time period. Should the city lose the case, the city would have to refund the excess taxes that were collected, including interest back to the date the tax payments were received. Since the property in question is part of a tax-incremental financing district, the city would not have to collect money from its taxing jurisdictions, like schools and the county. The attorney for Bonstores Realty was not available for comment.

Does Paying Overdue Property Tax Mean You Can Get a Title?

Even after the crash in the mid-2000s, there are still plenty of opportunities to make investments in real estate. Aside from bank foreclosures, property is also sold at discounted rates resulting from delinquent property tax bills. The revenue generated from property taxes are vital to every city, town and county in the United States. Tax collectors will foreclose on properties if the taxes have not been paid. If you pay overdue property taxes, you can get the title to the property through an auction sale. There are different auction formats throughout the country, but they are generally advertised in local papers beforehand. Taxes are imposed on real property, including vacant land and lands with homes, across the country. The taxes are assessed and collected at local levels, such as the county or city. Tax rates vary drastically among different locations, but in general bigger cities have much higher taxes than rural areas. If a land owner fails to pay his property taxes, the tax collector will attempt to collect the past due amount. Ultimately, the property could end up in a foreclosure auction if a payment is not received. Tax Lien Sales Some taxing authorities choose to sell tax lien certificates to make up for the financial loss resulting from unpaid property taxes. Once the tax collector determines the property owner is delinquent on the tax payment, a lien is filed on public record. An interested buyer can then buy a lien certificate, making him the lien holder. The specific terms of the tax lien sales vary by location, but they are commonly held like an auction. The certificate is placed up for sale in the amount of the unpaid taxes plus penalties and fees. The attendees bid not on the price of the certificate, but on the interest rate charged on the lien. Lein Holder Options The winning bidder is issued the lien certificate. After that, the interest rate that was bid on will be applied to the unpaid tax amount for a certain amount of time, usually a few years. If the property owner pays the past due amount, he'll be charged the interest rate. The certificate holder will make back his investment, plus interest. If the property owner fails to repay the unpaid taxes within the specified time frame, the certificate holder has the right to initiate foreclosure through the court system. If successful, he would then become the legal owner and title holder of the property. Tax Foreclosure Sales Tax foreclosure sales, sometimes called tax deed sales, are more similar to a mortgage foreclosure. Once the property owner is in property tax default for a specific period of time, the tax collector has the right to enforce its power of sale right. These sales are held in an auction format as well, and bidding typically begins at the amount of the past due taxes plus the acquired fees. The property is sold to the highest bidder, who will be issued a deed by the tax collector once payment is received. Payment is generally due the day of the sale. Taking Title Unlike mortgage foreclosures, most tax foreclosures do not have a right of redemption period. This means that the previous owners don't have any time after the sale to come up with the money to pay the taxes and reclaim ownership. The winning bidder is given the deed within a few days or weeks of the sale, depending on how fast the tax collector processes the foreclosure sales. At this point the bidder is the legal owner, however, there may be other complications such as the previous owners refusing to vacate the property. In cases like these, legal action might be necessary to evict.

Montgomery County crunches down on property tax credits

Montgomery County officials are going after homeowners who wrongly received state and county property tax credits. About 1,956 homeowners received the tax credits worth slightly less than $700, and county officials are estimating they could collect as much as $5.4 million for the credits, incorrectly given out between 2009 and 2012. County officials have collected about $134,000 from 216 accounts and expect to bill about 900 more in the coming months. Montgomery County has a 68.8 percent homeownership rate, which equals slightly more than 264,000 homes, according to census data. The property tax credits are given only to homeowners who live in their house; those who rent out their houses do not qualify. Rob Hagedoorn, the division chief of treasury in the county's Department of Finance, said in most cases it's not homeowners maliciously taking the tax credit; rather it's that homes are inaccurately classified in county records. Sign Up for the Daily E-dition newsletter! "In some cases, people might not have even known about it," he said. To find the discrepancies, the department compared rentals listed online and what each home was classified under in the county tax code. The $5 million in potential revenue will be put back into county funds. The county is currently facing a $134 million budget hole for fiscal 2014. In the housing crash of 2008, many homeowners turned to renting their houses because they couldn't sell and didn't go through the proper channels to acquire a license to rent, which would automatically change the tax classification of a home, Hagedoorn said. He said the problem possibly also occurred because up until December, homeowners did not have to apply for the credit. Last year, county officials realized they might be losing money and created a unit to double check which homes were getting the credit and which homes should not be. But the process has now changed: Residents must apply to receive the credit, meaning potentially fewer discrepancies in the future. The unit is scheduled to report its findings to a County Council committee on Monday. This is the first time the numbers have been documented. Council President Nancy Navarro, D-Eastern County, said she is interested to hear the unit's take on how the process has been going, and whether it's had an effect on county taxes. "Obviously, a lot of these things have to do with trying to look very deeply in what's going on," she said, referring to county officials going through minute details in records to find potential sources of revenue. "It's very important, for me, to hear from the administration what their take on this is."

Cedar Rapids property taxes could rise 4.15 percent

CEDAR RAPIDS, IA -- City Manager Jeff Pomeranz will present his “hold-the-line” budget to the City Council on Tuesday evening that, if approved, will raise the city’s portion of the local property-tax bill for the average homeowner by 4.15 percent for the fiscal year beginning July 1. This increase in property-tax revenue to the city is coming, in part, because of a state of Iowa “rollback” formula that will make 52.8166 percent of a residential property’s value subject to property tax, up from 50.75 percent in the current budget year. The proposed city budget keeps the city’s tax rate of $15.22 per $1,000 valuation the same as the current budget year. The tax rate will remain the lowest among Iowa’s largest cities, but for Dubuque, Pomeranz noted. In the end, the owner of a $100,000 home will pay $804 in property taxes to the city — about 40 percent of the total bill — in the new budget year, an increase of $31. In addition, the proposed city budget calls for the city to increase its franchise fee on electric and natural gas bills from 1 percent to 2 percent, an increase that will generate $3.2 million in new revenue for the city’s proposed $110-million general operating budget. The franchise fee, which is a recent addition to the city’s revenue-raising options, touches any property owner that pays an electric or gas bill. That includes churches and hospitals that don’t pay property taxes, the city’s principal funding source for city services, Pomeranz said in an interview on Monday. “It helps us broaden the tax base,” Pomeranz said of the franchise fee. Pomeranz said the need for additional revenue in the proposed new budget is coming because costs are rising. Wages and salaries for city employees are projected to increase by 2 percent, for instance. The city also will be paying $1.1 million more a year for flood insurance and will be contributing $1 million more a year — $7 million a year up from $6 million this year — to the state Municipal Fire and Police Retirement System of Iowa. In the current year, the city must pay an amount equal to 26.12 percent of police and fire salaries into the pension system, and next year, it’s 30.12 percent. In addition, the city’s new downtown library is coming on line in August, a move that will require the city to restore the library to a staffing and operating level similar to what it had before the June 2008 flood, which destroyed the library and forced the operation into temporary quarters at Westdale Mall. For more information see FindaPropertyTaxLawyer.com. Pomeranz and Casey Drew, the city’s finance director, said the costs for the library will increase about $1 million in the next fiscal year. About $500,000 of those cost will be paid from revenue from the city’s local-option sales tax. The sales tax revenue will be used on the library’s construction, and an equal amount of private library funds designated for construction will be shifted to library operations, Pomeranz explained. The proposed budget also calls for the users of the city’s package of city utilities — water, wastewater, sanitary sewer, storm sewer and garbage/recycling — to increase 3.4 percent. Pomeranz said the only significant spending initiative in the proposed new budget is the addition of five new staff positions to help implement the City Council’s new nuisance abatement program. The program includes criminal background checks on prospective renters and better coordination between landlords and the city to help with nuisance properties and nuisance tenants. “It’s going to be a safer community with strong neighborhoods,” Pomeranz said. The City Council must approve the new budget by March 15. The city accounts for about 40 percent of the local property-tax bill in Cedar Rapids with the school district and Linn County accounting for most of the rest.

Unpaid city water bills will become property tax liens

If you are a city of Dunkirk property owner with a water bill unpaid for two billing quarters or more, you might find that bill added to your property tax as a lien on your property. City Treasurer Mark Woods has issued a reminder to city property owners that as of March 8 liens will be attached to city property taxes of delinquent water customers. It will appear as a separate charge on the bill and included in the total tax due. Payment in full of the tax and water lien as noted on the 2013 city tax bill is required. Partial payments are not accepted. According to Sections 31-11 and 31-12 of the City Code, it is required that "any unpaid bills including penalties shall be included in the annual tax levy against the real property parcels in default, notwithstanding the fact that the bill or bills were unpaid by tenants or non-owners of the real property parcel affected." City property tax bills will be issued in early April with payment due 30 days after the start of collection

Nonprofit hospitals seek property tax refunds

Three hospitals in Illinois are seeking state tax refunds totaling nearly $10 million, reported Crain's Chicago Business. The hospitals include Edward Hospital & Health Services, Adventist Bolingbrook Hospital and Decatur Memorial Hospital. The taxes were levied during a period when the hospitals' management battled with regulators over their nonprofit status. But last summer, Gov. Pat Quinn signed into law new legislation for charity care and tax-exemptions that clarified which facilities qualify for tax-exempt status. All three facilities have since obtained tax exemptions. "We believed that in our situation, the morally right decision was to pay our taxes, under protest, to Will County in full, letting the county know we were certain the hospital would be recognized as deserving tax-exempt status," CEO Rick Mace said Wednesday in a memo to the board of directors of Adventist Bolingbrook, part of Adventist Health Midwest, according to Crain's Chicago Business. Adventist Bolingbrook is seeking by far the largest refund: $7.1 million. Decatur Memorial is seeking $1.6 million in refunds, while Edward is looking to recover about $1 million. However, recipients of the hospitals' tax largesse, such as Plainfield Community Consolidated School District 202, said they may have trouble making repayments, according to the article.

COOKEVILLE, Tenn.

The United States Attorney's Office has put a lien on the home of former Putnam County Property Assessor, Rhonda Chaffin. The lien suggests criminal charges are a real possibility. NewsChannel 5 Investigates first raised questions about how Chaffin came to own her home, and why her office undervalued hundreds of properties while she was property assessor. Rhonda Chaffin can still live in her Cookeville home, but the lien, which was filed with the Putnam County Register of Deeds, prevents her from selling it. "That's a serious thing to put a lien on somebody's house. They are not going to this frivolously and they are ready to move," said defense attorney David Raybin. Raybin says the government is required to indicate what laws may have been violated. In this case the lien lists mail fraud, wire fraud and federal program fraud. All are often used in public corruption cases, perhaps telegraphing prosecutors future plans. "This is not a telegraph, this is a fed ex," Raybin said. "This is coming at you much quicker and louder than a telegraph." Chaffin admitted to us in August that the developer who sold her the home provided her an $85,000 loan, that she claims was paid off two years later. "They helped me for a few months until I got my house sold and got my loan," Chaffin said. "They would have done that with anybody." Chaffin bought the house from developer Shirley Gaw. We discovered that Chaffin had massively depreciated some of his properties -- meaning he paid thousands less in property taxes. The state found Chaffin's office undervalued nine of Shirley Gaw's properties by approximately $9.5 million over three years. That includes Gaw's 7000 square foot, home undervalued by more than $38,000 a year according to the state. And Gaw's Chelsea Place Apartments, which auditors say Chaffin undervalued by nearly $2.5 million each year since 2009. NewsChannel 5 Investigates asked, "You're saying there is nothing wrong with these depreciations?" "No, there's nothing wrong with any of them," Chaffin responded last August. Chaffin has denied doing anything wrong, but Raybin says the lien which reads "The United States anticipates bringing criminal and/or civil forfeiture proceedings" speaks for itself. "The mountain has moved," Raybin said. "The government clearly has been investigating this for quite some time, and they will do a thorough investigation in this kind of thing and when they do move, they move decisively." Developer Shirley Gaw has appealed the state's ruling that he underpaid property taxes. Chaffin and her attorney did not return our phone calls. The state Comptroller's Office has determined that 19 additional properties were undervalued while Chaffin was in office. It brings to the total of undervalued properties to more than 200. The county has sent back tax notices telling the 19 property owners they owe more in property taxes.