If you are a developer considering a commercial or industrial project in Cook County, your project may be eligible for certain incentive programs designed to reduce your real estate taxes. Two such incentives are the Class 6b and the Class 8 classifications. These classifications allow certain commercial and industrial properties in Cook County to be assessed at lower levels (10% of market value) rather than a traditional assessment (25% of market value) for a period of 10 years.
Class 6b Incentive
Class 6b incentives are designed to encourage industrial development in Cook County. New, rehabilitated or re-occupied industrial facilities are eligible for this incentive. Qualifying properties receiving the Class 6b incentive are assessed at 10% of market value for the first 10 years, 15% in the 11th year and 20% in the 12th year. In the absence of a 6b incentive classification, industrial property would normally be assessed at 25% of its market value. This incentive is renewable and the number of renewal periods is unlimited.
Class 8 Incentive
Both commercial and industrial projects may be eligible for Class 8 incentives. A Class 8 incentive is designed to encourage industrial and commercial development in areas of Cook County experiencing severe economic distress. Like the Class 6b incentive, qualifying properties are assessed at 10% of market value for the first 10 years, 15% in the 11th year and 20% in the 12th year, substantially lower than the 25% assessment level. Also, like the 6b incentive, the Class 8 incentive is renewable and the number of renewal periods is unlimited.
An Eligibility Application must be filed for both the Class 6b and the Class 8 classifications prior to the commencement of construction or rehabilitation. The applicant must provide certain information to the Cook County Assessor, including information about the property, the proposed project and the proposed tenants. A municipal ordinance supporting the classification must either be included with the Eligibility Application or delivered to the County prior to the completion of construction.
While an individual industrial property may qualify for either a Class 6b or a Class 8, the Class 8 requires a municipality to adopt an ordinance stating that the proposed development or redevelopment area, which includes the property, is in need of revitalization. The County has waived this requirement for properties located in Bloom, Bremen, Calumet, Rich and Thornton townships.
After construction has been completed, the applicant must file an Incentives Appeal Form requesting that the real estate be re-classified. Certain information about the project must be provided with the Incentives Appeal Form, including a final project budget for all work completed on the property. Finally, a Real Estate Assessed Valuation Appeal must be submitted to the Cook County Assessor to finalize the classification change.
If a classification change is granted, the Class 6b or Class 8 recipient must file a triennial affidavit during the term of the incentive, attesting to the use of the property and the number of employees at the site.