The village and Orland schools could lose as much as $9.5 million if the owner of the Orland Square Mall persuades a judge that the company paid too much property tax between 2005 and 2009.
Simon Property Group, the nation's largest mall owner, filed suit in Cook County Circuit Court claiming its property value assessment — and thus the amount of taxes it paid — was too high for five years. If successful, the taxing bodies would be obligated to refund the difference.
That translates into a $4 million loss for Orland Park School District 135, $3 million for Consolidated Community School District 230, $1.4 million for the Orland Park Fire Protection District and $1 million for the village of Orland Park, which levies taxes for the Orland Park Library District.
The next hearing in the case is Sept. 29.
Also at stake is an unknown difference in property tax residents and other local businesses will pay if Simon Property Group's effort succeeds.
Simon believes the mall should be assessed at $22.8 million for each year between 2005 and 2008, while in 2009 the firm set the assessment at $15 million, according to a legal document reviewed by Patch. The Cook County Assessor's Office came to a different value, assessing the mall at about $31.8 million between 2005 and 2007, and $33 million for 2008 and 2009.
"We want just what is right, and we think what (Simon is) asking is grossly too low," District 135 Assistant Superintendent for Business Services John Reiniche said. "If we have to take that out of educational dollars, it impacts the services we can provide."
Reiniche did not foresee a referendum to change tax rates if Simon wins the suit. But he said a loss in this case would "cause us to re-evaluate our programs."
The potential loss of tax money would equate to about 7 percent of the district's budget, Reiniche said. The district is also facing the possibility that the state funding will drop by about $2 million.
Simon spokesman Lee Morris declined to answer questions about how the company would be affected if the assessment stands.
Orland Park Finance Director Annmarie Mampe said the assessed value of the entire village could be lowered from its current $2.9 billion rate if Simon wins the case.
Mampe said the amount of money collected by the village wouldn't change, but the amounts paid by local businesses and residents could be different.
"It would reallocate the money that comes in," Mampe said. "It can't be figured on a resident-per-resident basis because the values of homes are so different."
District 230 spokeswoman Carla Erdey said it's too soon to say what the result would be for the high school district if Simon wins the case.
While it is common for area businesses to appeal their tax assessments with the Cook County Assessor's Office and then the Property Tax Assessment Board if they disagree with the county office's ruling, filing a suit with the Circuit Court is a more uncommon response, according to attorneys and officials representing the taxing bodies.
Morris did not explain for Patch why Simon chose the Circuit Court for the appeal instead of the Property Tax Assessment Board.
Before May 2009, Cook County taxing bodies facing a case in the Circuit Court against a business looking for a lower tax assessment had to rely on the Cook County State's Attorney's Office instead of choosing their own representation.
But after an Illinois Supreme Court decision in the case of Madison Two Associates v. Pappas, in which a property owner challenged an assessment after tax money went to Chicago Public Schools, taxing bodies now can retain their own representation.
Ares Dalianis, an attorney for districts 230 and 135 who also represented Chicago Public Schools in the Madison case, said that at the last court hearing, attorneys for Simon were still familiarizing themselves with the case, which is why Circuit Judge Alfred Paul continued the case to Sept. 29.
"Ultimately, the property owner is trying to reduce the assessment and maximize the refund, and we're trying to preserve revenue," Dalianis said. "You can't issue a refund of millions of dollars without having a significant effect on the operation."