Passco Mellody Farm DST Trust v. Holly Kim, et al., IL App 240329 (2nd Dist. 2025), was recently decided by an Illinois Appellate Court. A link to the full opinion can be found here. In this case, the Plaintiff property owner filed a tax objection complaint against the Lake County Treasurer and Lake County Collector, challenging the validity of the 2020 and 2021 assessed value of its luxury apartment complex consisting of 260 apartments of various sizes, located in Vernon Hills.

2019 was a quadrennial reassessment year in Lake County. In counties with township assessors and fewer than 3,000,000 inhabitants, general (quadrennial) assessments are required every fourth year pursuant to 35 ILCS 200/9-155, et seq. During non-quadrennial years, assessed values typically carry forward, although assessors may “revise and correct” assessments when justifiable pursuant to 35 ILCS 200/9-75, so long as notice is provided to the taxpayer. The 2019 assessed value was expected to be carried forward through 2022, subject to annual equalization. At the start of 2019, the Libertyville Township assessor valued the property at $51,606,071 using an income approach. The Lake County supervisor of assessments issued a township-wide multiplier of 1.0053 for the 2019 tax years, raising the market value of the property to $51,879,582, and an assessed value of $17,291,465.

Board rules provide that the assessed value from 2019 were generally carried forward through 2022, absent any revisions or corrections relating to errors in the 2019 assessment, or changes made to properties, and/or by equalization. In 2020, the township assessor increased the value of the property. Utilizing an income approach once again, the township assessor determined a market value of $71,180,164. The supervisor of assessment established an equalization factor of 1.0096, resulting in a market value of $71,863,495, and an assessed value of $23,952,103, nearly $6 million more than the prior year. The reason for the 2020 valuation change on the assessment notice is listed as “Township Revaluation/SA Equalization.” There was no indication provided that the 2020 valuation change was a correction. For the 2021 tax year, the property’s assessed value was raised by the annual township multiplier of 1.0171, resulting in an equalized assessment of $24,361,684.

Plaintiff paid the 2021 and 2022 taxes under protest and filed appeals. Both appeals resulted in a “No change” decision from the Board of Review. Plaintiff filed a complaint at the circuit court level, objecting to the 2020 and 2021 increases. The circuit court sustained Plaintiff’s objections, finding the 2020 and 2021 increases void, but denied. The Village of Vernon Hills and Libertyville Community High School District No. 128 intervened and appealed, arguing that the trial court incorrectly determined that (1) the Township assessor illegally increased the property’s assessed values for 2020 and 2021, and (2) the Lake County Board of Review did not exercise its discretion in rendering no change determinations.

Ultimately, the Appellate Court disagreed with the intervenors and upheld the circuit court’s decision on these issues. The Appellate Court held that a reassessment outside of a general (quadrennial) assessment year is only permitted in limited circumstances, such as to correct an error in the prior assessment, or to reflect physical changes to the property, such as significant improvements or additions. Based on prior testimony provided by the township assessor at the Board of Review and circuit court, the Appellate Court determined that the property was revalued for the 2020 tax year, not simply revised and corrected. The Appellate Court took particular notice of the township assessor’s testimony before the Board of Review, which provided the reasons for her 2020 valuation were the speed with which the property was leased, the December 2019 sale of the property, and the reported $4.25 million net operating income for 2019. While this information may be relevant to the value of the property as of January 1, 2020, it was not relevant to its value as of January 1, 2019, the date which Illinois statute requires the property be valued in a general assessment year. Therefore, the property’s valuation was illegally increased. Further, the Appellate Court determined that if the original reassessment is beyond the assessor’s legal authority, a “no change” affirmation by the Board of Review does not legitimatize it. The Board of Review cannot cure a defect in the assessment. The Appellate Court affirmed the judgment of the circuit court, ordering full tax refunds for 2020 and 2021, resulting in a refund of over $1.8 million to the property owner.

So, what can taxing bodies learn from this case? A key takeaway is that it is critical to carefully review any increases by the assessor’s office that occur outside of a quadrennial year. If an increase has occurred outside of a quadrennial year, it is imperative to reach out to the appropriate township official to gather information and an understanding of what led to the increased assessment. This will allow the taxing body to better evaluate whether it makes sense to intervene in an appeal. Further, affirmation of an assessment by the Boad of Review cannot be used as a band aid to legitimize an improper valuation. A tax refund of this magnitude can have a devastating impact on taxing bodies, causing budget implications for years to come.

If you have any questions or would like to discuss this topic further, please contact Megan M. Olson at MOlson@tresslerllp.com.

About the Author

Megan M. Olson focuses her practice on serving cities, villages, townships, library districts, road districts, park districts and other local government entities. In addition to providing general counsel, she provides guidance on establishing and drafting new ordinances and policies, contract negotiations, building and code enforcement, administrative proceedings, Freedom of Information Act compliance and intergovernmental agreements. Megan also has experience in eminent domain, land use, development and public water supply matters. Click here to read Megan’s full attorney bio.