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Fisk Kart Katz and Regan

Helping Property Owners Reduce Their Real Estate Tax Liabilities

Fisk Kart Katz and Regan (FKK&R) is a classic example of a “boutique law firm.” The firm’s principal focus is Real Estate Assessment and Tax Law. From the time the firm was founded in 1939, when Eugene Kart and Albert Fisk joined forces to serve property owners who were struggling to emerge from the Great Depression, real estate tax issues were a significant part of the firm’s practice. In fact, many old-timers credit the fledgling firm with founding the Chicago Real Estate Tax Bar.

A Future Built on Solid, History-Rich Fundamentals

The spirit of its founders permeates the culture of the firm to this day. The needs of the firm’s clients and the issues clients presented have resulted in chang-es in organization and the advancement of more precise valuation paradigms. In addition to litigation at the administra-tive level and the appellate level, the firm’s attorneys are actively involved with clients in pursuing tax incentives and developing strategies to minimize the tax consequences of new developments and recent acquisitions.

Certain types of businesses are in-extricably tied to the real estate in which they operate. The classic example is a hotel. Real estate is one component of

the business, but there are other tangible and intangible assets that contribute to the hotel’s value. Only the real es-tate assets can be the subject of valuation for real estate tax purposes.

Pioneering Methodologies

Over the years, FKK&R has sought to refine the meth-odologies used in separating the value of the real estate assets from the values of the business services and per-sonal property, all of which contribute to the hotel’s bottom line.

An interesting example is the O’Hare Hilton Hotel. The property is owned by the City of Chicago and leased to Hilton under a long-term lease and should, therefore, be exempt from real estate taxes. The Property Tax Act provides that, in this case, the lease should be treated as real estate, and the Illinois Supreme Court, in a landmark decision, presented a valuation methodology for valuation of only the lease.

In our representation of the O’Hare Hilton, we were able to convince the Illinois Property Tax Appeal Board (PTAB) that for purposes of computing the ho-

tel’s leasehold value, certain payments under the lease, such as capital expenditures required for the repair and replacement of FF&E at the hotel, were not “real estate” and thus could not be used to determine the leasehold value. This PTAB decision resulted in the reduction of the O’Hare Hilton’s “lease-hold value” for property tax purposes by several million dollars a year.

P ro m o t i o n

• Assessmentvaluation• Assessmentappeals• Taxmanagement• Incentiveprograms

77 West Washington Street, Suite 900 | Chicago, IL 60602 | 312-726-1833 | www.proptax.com | office@proptax.com

In another PTAB matter involving a DuPage Senior Assisted Living property, we were successful in separating the val-ues of the business components and the personal property items from the value of the real estate. The final decision resulted in a significant tax refund to the owners.

In 1993, FKK&R was one of the founding members of the American Property Tax Counsel (APTC), a national affiliation of property tax attorneys. APTC provides its member firms and their cli-ents a national platform with established local representation in an area of law that differs significantly from state to state.

Today there is a member firm ser-vicing every state in the U.S. and every province in Canada. Members meet three times a year, and in October they sponsor a seminar on current tax issues for repre-sentatives of Fortune 500 companies.

Fromleft:JamesP.Regan,JeffreyA.Brown,EileenA.Sergo,AntonioJ.Senagore(JackE.Boehm-absent)

TheFKK&RValuation&LitigationTeam

As Seen In… Forbes, February 14, 2011