By James P. Regan

As published by GlobeSt.com, December 2003

In the summer of 2001 there were approximately 11,000 hotel rooms available in DuPage County. By 2003, after the 2001 downturn in the market, exacerbated by the 9/11 crisis, supply has increased by 25%. In DuPage County, alone, an additional 3,000 rooms were introduced to the market. A similar situation has occurred in Lake County.
Due to the general tightening of business travel and corporate downsizing, demand has not been able to keep up with the significant increase in supply. Intense competition for a diminishing customer base has lead to higher vacancies and lower average daily rates. While all the indices of value continue to drop, assessing authorities in Counties encircling Cook County continue to raise the assessed value on hotels. Recent appraisals written by experienced hospitality evaluators show that some properties are 40-50% over assessed.
Owners and tax managers should carefully review the assessments on their hotels. Valuation complaints may be in order.

 

James P. Regan is the managing partner of the Chicago law firm of Fisk Kart Katz and Regan, Ltd., the Illinois member of American Property Tax Counsel (APTC), the national affiliation of property tax attorneys.