Court Opinion

ID: 4636494
Source: CourtListenerOpinion
Date Created: 2020-11-24 22:37:05.960509+00
Date Added: 2024-06-11T07:59:28.942101
License: Public Domain

2020 IL App (1st) 180994
                                           No. 1-18-0994
                                    Opinion filed June 11, 2020
                                                                                    Fourth Division
 ______________________________________________________________________________

                                              IN THE
                               APPELLATE COURT OF ILLINOIS
                                 FIRST DISTRICT
 ______________________________________________________________________________

 CENTRAL NURSING REALTY, LLC,                            )    Petition for Review of a Final
                                                         )    Administrative Decision of the
           Petitioner,                                   )    Illinois Property Tax Appeal Board
                                                         )
     v.                                                  )
                                                         )
 THE ILLINOIS PROPERTY TAX APPEAL                        )
 BOARD; THE COOK COUNTY BOARD OF                         )
 REVIEW; and THE CHICAGO BOARD OF                        )
 EDUCATION,                                              )
                                                         )    Nos. 11-31329.001-C-3 through 11-
           Respondents.                                  )    31329.010-C-3

           JUSTICE LAMPKIN delivered the judgment of the court, with opinion.
           Justice Burke concurred in the judgment and opinion.
           Presiding Justice Gordon specially concurred.

                                           OPINION

¶1        Central Nursing Realty, LLC (Central Nursing), challenges a decision of the Illinois

Property Tax Appeal Board (Board) assessing the value of its real property. Central Nursing argues

that the Board overstated the fair market value of the property and failed to consider its argument
No. 1-18-0994

and supporting evidence that the property was inequitably assessed in comparison to similar

properties. For the following reasons, we affirm the Board’s decision. 1

¶2                                        I. BACKGROUND

¶3      The subject property is a 245-bed, skilled-care nursing home located at 2450 North Central

Avenue in Chicago, Illinois, in the Jefferson Township section of Cook County. It consists of

32,334 square feet of land, improved with a four-story, 65,088 square foot building with 52,157

square feet above grade. The building was constructed in 1973 of masonry and steel. Additional

site improvements include a 45-car paved parking lot. Central Nursing purchased the nursing home

business as a going concern, including its real property and tangible and intangible personal

property, for $25 million in 2009. At the time, the buyer and seller attributed approximately $7.5

million of the total purchase price to the value of the real estate.

¶4      In 2011, the Cook County Assessor assessed the land at a value of $127,312 and the

improvements at a value of $1,930,042, for a total assessed value of $2,057,354. Because

commercial property in Cook County is assessed at 25% of its fair market value, the assessment

implied that the subject property had a fair market value of $8,229,416. Central Nursing appealed

to the Cook County Board of Review, which rejected its request to reduce the assessment.

¶5      Central Nursing then appealed to the Board, arguing that the assessment was excessive and

inequitable and that it should be reduced to one of several alternative amounts. First, Central

Nursing argued that the assessment should be reduced to $1,872,875. In support, Central Nursing

submitted the real estate transfer declaration form filed after its 2009 purchase of the going

concern, in which the parties attested that the fair market value of the real estate was $7,491,500.

        1
        In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this
appeal has been resolved without oral argument upon the entry of a separate written order.

                                                  -2-
No. 1-18-0994

¶6      Next, under what it called the “Economic Approach to Value,” Central Nursing argued that

the assessment should be reduced to $1,816,666 to reflect a fair market value of $7,266,664. In

support of this argument, Central Nursing attached a 2010 financial statement showing revenue of

$10,222,798. Although the statement showed net income of $1,236,368, Central Nursing instead

(without explanation) “[s]tabiliz[ed]” its expenses at 90% of revenue, producing a 2010 net income

of $1,022,280, which it then “capitaliz[ed]” at a rate of 14.07%, yielding (according to its

calculation) a fair market value of $7,266,664. 2

¶7      As a further alternative, Central Nursing argued that the assessment should be reduced to

$1,087,496, based on a fair market value of $4,349,987, which it calculated using the capital

component of the Medicaid reimbursement rate that it deemed attributable to the real estate. As

support for this method of valuation, Central Nursing cited (but did not attach) an unpublished,

out-of-state trial court decision.

¶8      As its next alternative, Central Nursing argued that the assessment should be reduced to

$1.35 million based on an appraised fair market value of $5.4 million. In support, Central Nursing

submitted an appraisal report by certified real estate appraiser Ryan Korth, which analyzed the

property using three approaches to valuation—the cost approach, the income capitalization

approach, and the sales comparison approach. Under the cost approach, Korth estimated the value

of the land by considering sales of four comparable parcels in surrounding neighborhoods between

2008 and 2011. After calculating the sales prices of those lots per square foot of floor area ratio

(which measures the maximum allowable ratio of building area to lot size) and making relevant

adjustments, Korth concluded that the subject property’s land had a fair market value of $1 million.

        2
         As the Board later noted, a correct calculation using Central Nursing’s figures yields a fair market
value of $7,265,672.

                                                    -3-
No. 1-18-0994

¶9     Korth then used the Marshall Valuation Service (MVS) cost manual to estimate the cost of

reproducing the building. Based on the type and quality of its construction, Korth classified the

building as a Class C—Average Convalescent Hospital with a replacement cost of $11,484,825.

Korth explained that he did not factor entrepreneurial incentive (the profit that a developer can

expect to earn on a project) into the building’s replacement cost because nursing homes are not

typically built by developers on speculation. Korth then calculated the building’s depreciated value

using the age/life method. Based on its condition and maintenance history, Korth estimated that

the building had an effective age of 25 years. In addition, relying on the MVS cost manual’s

estimate for Class C—Average Convalescent Hospitals, Korth determined that the building had a

total economic life of 40 years. By dividing the building’s effective age by its total economic life,

Korth calculated that the building had depreciated by 62.5% and had a current fair market value

of $4,300,184. Finally, Korth estimated that the property’s site improvements had a depreciated

value of $40,000. In total, under the cost approach, Korth concluded that the property’s fair market

value was $5.3 million, rounded.

¶ 10   Under the income capitalization approach, Korth determined that the total value of the

business as a going concern was $25.2 million. He arrived at this figure by dividing the business’s

adjusted net operating income by a loaded capitalization rate. He then subtracted the value of the

real estate (as previously determined under the cost approach) from the going concern value,

yielding a non-real-estate business value of $19.9 million. In a process that the Board described as

“somewhat circular,” Korth then subtracted the business’s non-real-estate value from its going

concern value, which (unsurprisingly) yielded a real estate value of $5.3 million.

¶ 11   Under the sales comparison approach, Korth considered recent sales of four comparable

nursing home businesses. After subtracting the businesses’ non-real-estate values and making

                                                -4-
No. 1-18-0994

relevant adjustments, Korth concluded that the subject property had a fair market value of $4.7

million.

¶ 12   In reconciling the results of the three approaches, Korth placed the most weight on the cost

approach, explaining that it provided the best indication of the value of the real property because

it did not require the extraction of the business’s non-real-estate value from its overall value as a

going concern. Although Korth’s initial report concluded that the property had a fair market value

of $5.3 million as of January 1, 2012, he subsequently stated that the value of the property as of

the relevant date of January 1, 2011, was $5.4 million. In addition, Korth explained that he did not

consider the value that Central Nursing attributed to the property on the real estate transfer

declaration form that it filed after purchasing the going concern because the form was not

completed by a professional appraiser.

¶ 13   Central Nursing’s final alternative argument sought to reduce the assessed value of the

property to $1,478,812, based on assessments of allegedly comparable properties. In support of

this equity argument, Central Nursing submitted a grid with details such as age, address, lot size,

building area, construction class and condition, number of beds, and assessment value for the

subject property and eight allegedly comparable nursing homes. According to the data provided,

the comparable properties’ improvements were assessed at values ranging from $5076 per bed to

$7700 per bed, whereas the subject property’s improvement assessment was $7878 per bed. As

the Board later noted, while Central Nursing’s initial grid indicated that the property with an

improvement assessment of $5076 per bed had 176 beds, two additional grids that Central Nursing

submitted listed the property as having only 146 beds, which produced an improvement assessment

of $6119 per bed for that property. The additional grids also identified three other allegedly

comparable properties but provided assessment information for only one of them, indicating an

                                                -5-
No. 1-18-0994

improvement assessment of $6001 per bed. In addition, Central Nursing submitted numerous

computer-generated printouts from the Cook County Assessor’s office that listed the assessment

values for the subject property and the eight allegedly comparable properties included in its initial

grid.

¶ 14    In response to the appeal, the Cook County Board of Review submitted data for five

allegedly comparable properties that sold between September 2006 and December 2009 for prices

ranging from $193 per square foot of building area to $307 per square foot of building area. By

comparison, the Board of Review’s assessment of the subject property implied a fair market value

of $8,229,416, which equated to a value of $126 per square foot of total building area or $158 per

square foot of building area excluding basement space.

¶ 15    The Board of Education of the City of Chicago intervened to defend the assessment and

submitted an appraisal by Eric Dost. Like Korth, Dost analyzed the property using the cost

approach, the income capitalization approach, and the sales comparison approach. To estimate the

value of the land under the cost approach, Dost considered five comparable parcels that sold

between December 2009 and November 2010. After calculating their sale prices per square foot

and making relevant adjustments, Dost concluded that the subject land had a fair market value of

$650,000. Based on the building’s HVAC system and exterior detail, Dost concluded that the

structure was a Class C—Good (rather than Average) Convalescent Hospital. Using the MVS cost

manual for a structure of that type and quality, Dost calculated a replacement cost of $14,776,623,

which included a 15% markup to account for entrepreneurial incentive. Using the age/life method

to determine the building’s depreciated value, Dost estimated that the building had an effective

age of 20 years, based on its maintenance history, lack of functional obsolescence, and capital

improvements of $190,000 between 2009 and 2010. In addition, although the MVS guidelines

                                                -6-
No. 1-18-0994

provided that a Class C—Good Convalescent Hospital had a total economic life of 45 years, Dost

concluded that the building’s total economic life was 50 years, based on his experience and

inspection of the property. Accordingly, Dost calculated that the building had depreciated by 40%

and had a current fair market value of $8,865,974. Dost then estimated that the property’s site

improvements had a current value of $42,000, which yielded a total fair market value of $9.6

million, rounded.

¶ 16   Under the income capitalization approach, Dost determined that the market value of the

business as a going concern was $15.5 million, rounded, which he calculated by dividing the

business’s adjusted net operating income by a loaded capitalization rate. He then used two separate

methodologies to extract the business’s real estate value. First, using the quantification of business

value methodology, Dost calculated the portion of the business’s net operating income attributable

to its proprietary earnings and divided that amount by a capitalization rate that yielded a non-real-

estate business value of $1.7 million, rounded. Second, using the cost approach comparison

methodology, Dost subtracted the value of the business’s real estate (as previously determined

using the cost approach), as well as the value of the business’s personal property, from the going

concern value, which resulted in a business value $5,287,500. After averaging those figures, Dost

calculated a business value of $3.5 million, rounded, which he subtracted (along with the value of

the business’s personal property) from the going concern value, yielding a real estate value of

$11.4 million, rounded.

¶ 17   Finally, under the sales comparison approach, Dost considered recent sales of five

comparable nursing home businesses and concluded, after making relevant adjustments, that the

subject business had a going concern value of $14.7 million. Dost then subtracted the business and

personal property values calculated under the income capitalization approach from the going

                                                -7-
No. 1-18-0994

concern value to arrive at a real estate value of $10.6 million, rounded. In reconciling the results

of the various approaches, Dost placed primary emphasis on the cost and income capitalization

approaches and concluded that the subject property had a fair market value of $10.5 million.

¶ 18   In rebuttal, Central Nursing submitted a report by appraiser Bradley Braemer that identified

several alleged errors in the Dost appraisal but did not provide an independent view of the

property’s fair market value. Braemer opined that Dost’s decision to factor entrepreneurial

incentive into the replacement cost of the building was inappropriate and unsupported by local

market data. He also questioned Dost’s conclusion that the building had an effective age of 20

years, opining that the capital improvements cited by Dost were relatively minimal. Moreover,

although Braemer agreed with Dost’s classification of the building as a Class C—Good

Convalescent Hospital, he criticized Dost’s decision to deviate from the MVS guidelines when

estimating the building’s total economic life.

¶ 19   In addition, Central Nursing’s rebuttal included a revised version of its initial grid of

comparable nursing homes that added assessment information and property details for the

comparable properties identified by the Board of Review. According to the revised grid, the

improvement assessments for the Board of Review’s comparable properties ranged from $4751

per bed to $11,058 per bed.

¶ 20   The matter proceeded to an evidentiary hearing, at which Korth, Dost, and Braemer

testified consistently with their reports. On the morning of the hearing, Central Nursing requested

leave to submit updated assessment information for several of the comparable properties that it

and the Board of Review had previously identified. According to Central Nursing, the assessments

for those properties had been revised as a result of tax objection proceedings brought by the

                                                 -8-
No. 1-18-0994

property owners in the circuit court under section 23-15 of the Property Tax Code (35 ILCS

200/23-15 (West 2018)). The administrative law judge (ALJ) allowed Central Nursing to submit

the updated assessment information but ruled that the circuit court judgments themselves were

inadmissible. Based on the updated grid submitted by Central Nursing, its eight comparable

properties had improvement assessments ranging from $3795 per bed to $7700 per bed and the

Board of Review’s comparable properties had improvement assessments ranging from $4401 per

bed to $8887 per bed. 3

¶ 21    The ALJ allowed the Board of Review and the Board of Education 14 days to file responses

to the updated assessment information and gave Central Nursing seven days to file a reply. In a

joint response, the Board of Review and the Board of Education argued, among other things, that

Central Nursing’s updated grid relied on inaccurate assessment information for the comparable

properties. Although the Board’s decision states that Central Nursing did not file a reply, and no

reply appears in the record on appeal, Central Nursing has included a copy of the reply in the

appendix to its brief, along with a printout of an email from the ALJ acknowledging its receipt. In

the reply, Central Nursing explained that the assessment information in the updated grid correctly

reflected the revised assessments entered as a result of the property owners’ circuit court

challenges.

¶ 22    In a written decision, the Board concluded that a reduction in the assessed value of the

subject property from $2,057,354 to $1,957,509 was warranted but rejected Central Nursing’s

        3
         As the Board noted, the correct range of updated assessments for Central Nursing’s comparable
properties appears to be $4191 per bed to $7700 per bed. The property that Central Nursing identified as
having an updated assessed value of $3795 per bed is the property that it previously described as having
either 176 bed or 146 beds. The assessment value of $3795 per bed appears to be based on the assumption
that the property has 176 beds. If the property in fact has 146 beds, its per-bed assessed value would be
$4575.

                                                  -9-
No. 1-18-0994

request for a further reduction. At the outset, the Board identified Central Nursing’s five alternative

arguments in support of an assessment reduction, including its argument that the subject property

was “inequitably assessed.” With respect to the equity argument, the Board noted that Central

Nursing had submitted “varying degrees of information” for its allegedly comparable properties

and described Central Nursing’s evidentiary submission as “nothing less than convoluted” and

containing “numerous discrepancies.” Nevertheless, the Board stated that it did “its best to

ascertain the correct information for each comparable [property] based on the data submitted by

[Central Nursing].” In particular, after “considering the updated assessment information” that

Central Nursing submitted during the hearing, the Board found that the properties identified by

Central Nursing “had improvement assessments that ranged from *** $4,191.14 to $7,700.04 per

bed,” while the properties identified by the Board of Review “had improvement assessments that

ranged from *** $4,400.89 to $8,886.91 per bed.”

¶ 23   Addressing Central Nursing’s arguments in turn, the Board first rejected its request to

assess the property using the “Economic Approach to Value.” The Board noted that Central

Nursing offered no evidence that the historical income it relied on under that approach was

“reflective of the market and the property’s capacity for earning income,” even though “it is the

capacity for earning income, rather than the income actually derived, which reflects ‘fair cash

value’ for taxation purposes.” See Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.

2d 428, 431 (1970). The Board was similarly unpersuaded by Central Nursing’s argument that the

property’s fair market value should be calculated using Medicaid reimbursement rates, noting that

Central Nursing’s own expert, Korth, found the method unreliable because Illinois had not rebased

its Medicaid reimbursement rate in more than 20 years.

                                                - 10 -
No. 1-18-0994

¶ 24   The Board likewise rejected Central Nursing’s contention that the fair market value of the

property could be established by the real estate transfer declaration form that it filed after its 2009

purchase of the going concern, in which both it and the seller attested that the real property

involved in the sale had a fair market value of approximately $7.5 million. Because Central

Nursing offered no evidence concerning the process by which the parties arrived at that figure, the

Board accorded it no weight.

¶ 25   The Board then considered the dueling appraisals by Korth and Dost, as well as Braemer’s

review of Dost’s appraisal. The Board noted that both Korth and Dost placed emphasis on the cost

approach when valuing the real estate and that Braemer agreed that it was appropriate to use that

approach when valuing a nursing home’s real estate. The Board acknowledged that the appraisers

also analyzed the subject property using the income capitalization and sales comparison

approaches, but it gave the results reached under those approaches “diminished weight” because

they were “substantially reliant on the value of the subject’s real estate as determined under the

appraisers’ respective cost approaches.”

¶ 26   Although the Board found that the Korth and Dost appraisals “lack[ed] sufficient evidence

to support their respective conclusions under the cost approach,” the Board determined that it could

“us[e] the credible and reliable evidence provided in [the] appraisals” to “craft an appropriate

conclusion of value.” To that end, the Board first determined that Dost’s valuation of the land at

$650,000 was more reliable than Korth’s higher estimate. In particular, the Board explained that

it accorded diminished weight to Korth’s valuation because it relied on comparable sales that were

more remote in time than those that Dost considered and because it compared the various

properties using sales price per square foot of floor area ratio rather than actual square footage.

                                                - 11 -
No. 1-18-0994

¶ 27   As for the value of the building, the Board noted that Korth and Dost agreed that the

building was a Class C Convalescent Hospital under the MVS guidelines but disagreed about the

quality of the building’s construction, with Korth concluding that it was average and Dost

concluding that it was good. The Board credited Dost’s conclusion on this point, noting that

Braemer did not find it to be erroneous. In addition, the Board noted that the building had been

adequately maintained and (in both appraisers’ views) had an effective age that was lower than its

actual age, suggesting that it was in good condition. The Board disagreed, however, with Dost’s

decision to factor entrepreneurial incentive into the replacement cost of the building, due to a lack

of market data supporting the inclusion of entrepreneurial incentive in the value of a nursing home.

Based on the MVS cost manual data for a Class C—Good Convalescent Hospital, but excluding

Dost’s inclusion of entrepreneurial incentive, the Board determined that the building’s replacement

cost was $12,849,237.

¶ 28   To calculate the building’s current value, the Board found that the age/life method used by

Korth and Dost, and approved by Braemer, was “the proper way to determine the subject’s

depreciation.” The Board noted that Korth and Dost agreed that the building’s effective age was

lower than its actual age of 38 years, with Korth estimating 25 years and Dost 20 years. The Board

noted that Braemer criticized Dost’s estimate, but it found Dost’s view more reliable than Korth’s,

noting the “significant capital improvements” made to the building between 2009 and 2010. With

respect to the building’s total economic life, the Board disagreed with both appraisers. The Board

rejected Korth’s estimate of 40 years because it relied on the MVS guidelines for a Class C—

Average Convalescent Hospital rather than a Class C—Good Convalescent Hospital. The Board

likewise rejected Dost’s estimate of 50 years, concluding that Dost provided no support for his

                                               - 12 -
No. 1-18-0994

decision to deviate from the MVS guidelines for a Class C—Good Convalescent Hospital.

Adhering to the MVS guidelines, the Board concluded that the building had a total economic life

of 45 years. Thus, with a replacement cost of $12,849,237 and a depreciation rate of 44.44%, the

Board concluded that the building had a current fair market value of $7,139,036. Additionally, the

Board determined that the fair market value of the site improvements was $41,000, which was

halfway between the estimates provided by Korth and Dost.

¶ 29   In total, the Board concluded that the fair market value of the subject property was

$7,830,036, which resulted in an assessed value of $1,957,509 under the 25% assessment level

applicable to commercial properties in Cook County. Having determined the property’s fair market

value, the Board also concluded that the property was “fairly and equitably assessed” and that “no

reduction [was] warranted based on [Central Nursing’s] equity argument.”

¶ 30   Central Nursing timely petitioned for our review of the Board’s decision.

¶ 31                                     II. ANALYSIS

¶ 32   Final decisions of the Board are subject to review under the Administrative Review Law

(735 ILCS 5/3-101 et seq. (West 2018)). 35 ILCS 200/16-195 (West 2018). In cases where, as

here, a change in assessed value of $300,000 or more was sought before the Board, review lies

directly in the appellate court. Id. The scope of our review “extend[s] to all questions of law and

fact.” 735 ILCS 5/3-110 (West 2018). We review the Board’s conclusions of law de novo and its

resolution of mixed questions of law and fact for clear error. Cook County Board of Review v.

Property Tax Appeal Board, 403 Ill. App. 3d 139, 143 (2010). The Board’s “findings and

conclusions on questions of fact,” however, are deemed “prima facie true and correct” (735 ILCS

5/3-110 (West 2018)) and will be reversed only if they are against the manifest weight of the

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No. 1-18-0994

evidence, meaning that an opposite conclusion is clearly evident from the record. Cook County

Board of Review, 403 Ill. App. 3d at 143.

¶ 33   Central Nursing’s first contention is that the Board violated the Illinois Constitution, the

Property Tax Code, and the Board’s rules by disregarding its argument that the subject property

was inequitably assessed in comparison to similar properties. The Illinois Constitution provides

that “taxes upon real property shall be levied uniformly by valuation ascertained as the General

Assembly shall provide by law.” Ill. Const. 1970, art. IX, § 4(a). Under this provision, “taxing

officials may not value the same kinds of properties within the same taxing boundary at different

proportions of their true value.” John J. Moroney & Co. v. Illinois Property Tax Appeal Board,

2013 IL App (1st) 120493, ¶ 39. “The party objecting to an assessment on lack of uniformity

grounds bears the burden of proving the disparity by clear and convincing evidence.” Walsh v.

Property Tax Appeal Board, 181 Ill. 2d 228, 234 (1998); see also 86 Ill. Adm. Code 1910.63(e)

(2000) (“When unequal treatment in the assessment process is the basis of the appeal, the inequity

of the assessments must be proved by clear and convincing evidence.”). To satisfy its burden, the

challenging party must submit documentation showing the assessments of the subject property for

the year in question and (as the Board recommends) at least three comparable properties. 86 Ill.

Adm. Code 1910.65(b) (1997). The documentation should also show “the similarity, proximity[,]

and lack of distinguishing characteristics of the assessment comparables to the subject property.”

Id.

¶ 34   Central Nursing contends that the Board disregarded its equity argument, even though it

complied with the Board’s rules regarding documentary evidence by submitting several grids

containing assessment information and relevant property details for the subject property and eight

                                              - 14 -
No. 1-18-0994

allegedly comparable properties. But the Board’s decision establishes that the Board considered

and rejected—rather than ignored—Central Nursing’s equity argument. The Board’s decision

expressly recognized Central Nursing’s argument that the subject property was inequitably

assessed in comparison to similar properties and discussed the evidence that Central Nursing

submitted in support of that argument. The Board noted that Central Nursing’s evidentiary

submissions were “convoluted” and contained “numerous discrepancies,” but it nevertheless

attempted “to ascertain the correct information for each comparable [property] based on the data”

that Central Nursing submitted. Finally, after determining the fair market value of the subject

property and reducing its assessment accordingly, the Board concluded that the property had been

“fairly and equitably assessed” and that “no [further] reduction [was] warranted based on [Central

Nursing’s] equity argument.”

¶ 35    Central Nursing asserts that the Board did not consider the entirety of its evidence, but the

only example it gives is the Board’s failure to consider the reply that it submitted after the hearing

addressing updated assessment information for several allegedly comparable properties. The reply,

however, contained argument not evidence. There is no question that the Board considered the

evidence of updated assessments that Central Nursing submitted. Indeed, the Board’s decision

noted that the ALJ granted Central Nursing’s request to submit updated assessment information

and discussed the substance of that updated evidence, including the revised range of improvement

assessments for the comparable properties identified by the parties. 4 Moreover, because Central

        4
         Central Nursing notes that the Board described the updated range of improvement assessments for
its comparable properties as $4191 per bed to $7700 per bed, while its updated submission identified a
property with an updated improvement assessment of $3795 per bed. But the Board earlier explained that
Central Nursing had provided conflicting information regarding the number of beds at the property in
question. It appears that the Board calculated the updated per-bed improvement assessment for that property
based on the lower bed count identified in Central Nursing’s conflicting submissions, which produced an

                                                  - 15 -
No. 1-18-0994

Nursing has not alleged, let alone shown, that it was prejudiced by the Board’s failure to consider

its reply, reversal of the Board’s decision on that basis is unwarranted. See McCleary v. Board of

Fire & Police Commissioners of the City of Woodstock, 251 Ill. App. 3d 988, 993 (1993) (an

“appellate court may reverse an administrative ruling only if there is error which prejudiced a party

in the proceeding”); 735 ILCS 5/3-111(b) (West 2018) (“Technical errors in the proceedings

before the administrative agency or its failure to observe the technical rules of evidence shall not

constitute grounds for the reversal of the administrative decision unless it appears to the court that

such error or failure materially affected the rights of any party and resulted in substantial injustice

to him or her.”).

¶ 36   Central Nursing further notes that the Board did not state the standard of review under

which it evaluated the equity argument, but it provides no authority for the proposition that the

Board’s failure to do so justifies reversal of its decision. Central Nursing likewise faults the Board

for discussing the equity argument in the “Findings of Fact” section of its decision, rather than the

decision’s “Conclusions of Law” section. Again, Central Nursing cites no authority that would

support reversal of the Board’s decision on this basis. Although the Board discussed the evidence

that Central Nursing submitted in support of the equity argument in the fact section of its decision,

its determination that the evidence and argument were insufficient to warrant a reduction in the

property’s assessed value was included in the decision’s conclusions of law section. Taken as a

whole, the Board’s decision identified Central Nursing’s equity argument, discussed the evidence

that Central Nursing submitted in support of the argument, and concluded that the evidence and

argument were unavailing. We find no basis for concluding that the Board failed to consider

improvement assessment of $4575 per bed. Central Nursing has not attempted to reconcile the discrepancy
in the bed count it provided for this property.

                                                - 16 -
No. 1-18-0994

Central Nursing’s equity argument or any of the evidence that Central Nursing submitted in

support of it.

¶ 37    Central Nursing also appears to challenge the merits of the Board’s determination that the

subject property was not inequitably assessed in comparison to similar properties. As the party

challenging the assessment “on lack of uniformity grounds,” it was Central Nursing’s burden to

“prov[e] the disparity by clear and convincing evidence.” Walsh, 181 Ill. 2d at 234. “The issue of

whether comparable properties establish the uniform assessment and valuation of properties is a

question of fact.” Board of Education of Ridgeland School District No. 122, Cook County v.

Property Tax Appeal Board, 2012 IL App (1st) 110461, ¶ 31; see also Du Page County Board of

Review v. Property Tax Appeal Board, 284 Ill. App. 3d 649, 653-54 (1996) (“The question whether

the four comparable sales did or did not establish that the subject property was not uniformly

assessed was a factual issue for the [Board] to resolve.”). We thus review the Board’s conclusion

that Central Nursing failed to demonstrate that the subject property was inequitably assessed under

the manifest weight of the evidence standard and will reverse only if the incorrectness of the

Board’s decision is clearly evident from the record. Cook County Board of Review, 403 Ill. App.

3d at 143.

¶ 38    In its brief, Central Nursing identifies four of the allegedly comparable nursing home

properties that it and the Board of Review submitted below. According to Central Nursing, those

properties, like the subject property, are located in Cook County, were built in the mid-1970s, and

have improvement assessments that range from $4191 per bed to $8887 per bed. By comparison,

the subject property’s improvement assessment (as reduced by the Board) is $7327 per bed, which

according to Central Nursing is higher than all but one of the assessments given to the comparable

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No. 1-18-0994

properties identified in its brief. Although Central Nursing states that the allegedly comparable

properties have between 190 and 313 beds and range in size from 49,600 square feet to 72,432

square feet (compared to the subject property’s 245 beds and 65,088 square feet), it does not

provide bed-count, building area, or assessment information for any of the comparable properties

on an individualized basis. Nor does it discuss any other details, including type and quality of

construction, that would bear on the similarity or dissimilatory of the comparable properties in

relation to the subject property. Central Nursing likewise makes no argument that the subject

property is more similar to the three comparable properties that received per-bed assessments

lower than its assessment than it is to the comparable property that received a higher per-bed

assessment. Central Nursing has thus forfeited any such argument. See Ill. S. Ct. R. 341(h)(7) (eff.

May 25, 2018). For all these reasons, we cannot say that Central Nursing demonstrated by clear

and convincing evidence that the subject property was inequitably assessed in comparison to

similar properties, nor that the Board’s finding to that effect was against the manifest weight of

the evidence.

¶ 39   Central Nursing also raises two challenges to the Board’s determination regarding the fair

market value of the property. The Board’s “finding regarding the property’s fair market value will

not be reversed unless it is against the manifest weight of the evidence, which occurs only where

all reasonable and unbiased persons would agree that the decision is erroneous and that an opposite

conclusion is clearly evident.” (Internal quotation marks omitted.) Kraft Foods, Inc. v. Illinois

Property Tax Appeal Board, 2013 IL App (2d) 121031, ¶ 51.

¶ 40   First, Central Nursing contends that the Board’s decision was against the manifest weight

of the evidence because it gave no weight to the value attributed to the property on the real estate

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No. 1-18-0994

transfer declaration form filed after Central Nursing purchased the going concern. As Central

Nursing notes, when it purchased the going concern in 2009 for $25 million, it and the seller

attested that approximately $7.5 million of the total purchase price was allocated to the value of

the real property. But Central Nursing offered no evidence at the hearing to explain how the parties

to the transaction arrived at that valuation. And Central Nursing’s own expert, Korth, testified that

he would not accord any weight to a valuation made by a person who was not a certified real estate

appraiser. Accordingly, the Board’s decision to accord no weight to the real estate transfer

declaration form was not against the manifest of the evidence. See Kankakee County Board of

Review v. Property Tax Appeal Board, 337 Ill. App. 3d 1070, 1074 (2003) (“An administrative

decision is not against the manifest weight of the evidence where the record contains some

competent evidence to support the agency’s finding.”).

¶ 41   Second, Central Nursing contends that the Board’s decision was against the manifest

weight of the evidence because it relied on parts of Dost’s appraisal, despite rejecting other parts

of it based on errors identified by Braemer. But the Board was not required to accept or reject

Dost’s opinion wholesale. When faced with competing expert opinions, “it [is] not inherently

improper for the [Board] to credit some of the evidence that both parties presented.” Kraft Foods,

2013 IL App (2d) 121031, ¶ 47. The Board may “consider conflicting appraisals and conclude that

the property is worth a different amount than what any of the experts testified to.” Id. ¶ 48. Here,

the Board considered Korth’s and Dost’s competing appraisals, as well as Braemer’s review of

Dost’s appraisal, and accepted the parts of each expert’s opinion that it found credible and rejected

the parts that it did not. On administrative review, we may not “reweigh the evidence, reassess the

credibility of the witnesses, substitute [our] judgment for [the Board’s], or make an independent

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No. 1-18-0994

determination of the facts.” Id. ¶ 51. Nor will we “disturb the [Board’s] findings where there exists

simply a difference of opinion regarding the actual value of the property.” Id. Central Nursing has

not shown that “all reasonable and unbiased persons would agree” that the Board’s decision to rely

on parts of Dost’s appraisal and its ultimate determination of the subject property’s fair market

value were “erroneous and that an opposite conclusion [was] clearly evident.” (Internal quotation

marks omitted.) Id. We thus cannot say that the Board’s decision was against the manifest weight

of the evidence.

¶ 42                                    III. CONCLUSION

¶ 43     For the foregoing reasons, we affirm the decision of the Illinois Property Tax Appeal

Board.

¶ 44     Affirmed.

¶ 45     PRESIDING JUSTICE GORDON, specially concurring:

¶ 46     I agree with the ultimate conclusion of the majority, but I must respectfully write

separately. The expert witnesses who testified in the case at bar did not agree to the facts of this

case, and their ultimate opinions varied based on the facts that formed the basis of their opinions.

As a result, I cannot say that an opposite conclusion is clearly evident from the record based on

the board’s factual findings and conclusions. I thus must also affirm.

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No. 1-18-0994

                                  No. 1-18-0994

Cite as:                 Central Nursing Realty, LLC v. Illinois Property Tax Appeal
                         Board, 2020 IL App (1st) 180094

Decision Under Review:   Petition for review of orders of Illinois Property Tax Appeal
                         Board, Nos. 11-31329.001-C-3 through 11-31329.010-C-3.

Attorneys                John B. Wolf, of Ashman & Stein, of Skokie, for petitioner.
for
Appellant:

Attorneys                Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz,
for                      Solicitor General, and Valerie Quinn, Assistant Attorney General,
Appellees:               of counsel), for appellee Illinois Property Tax Appeal Board.

                         Kimberly M. Foxx, State’s Attorney, of Chicago (Cathy McNeil
                         Stein, John J. Carey, and Benjamin R. Bilton, Assistant State’s
                         Attorneys, of counsel), for appellee Cook County Board of
                         Review.

                         Ares G. Dalianis, of Franczek P.C., of Chicago, for other appellee.

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