Golf courses score hole-in-one with open space assessment reductions

A special "open space" provision in the Illinois Property Tax Code designed to preserve the environment by limiting development means certain taxpayers, like golf course owners and operators,can enjoy the benefits of artificially low property assessments.

By James W. Chipman

When lawmakers passed the open space assessment law over 40 years ago, their intent was to give a limited number of property owners a tax incentive to maintain tracts of green space threatened by encroaching urban growth. Some wanted only to ease the tax burden on country clubs and golf courses, which often bear the burden of higher assessments based on values that represent potential highest and best use as development sites rather than lower values based on their continued present use.

Rules of the game

Under the law*, private landowners may apply for open space designation if they have used more than 10 acres of land for purposes such as maintaining natural and scenic resources, conserving landscaped areas, or promoting soil conservation for at least three years. Residential property is excluded. Taxpayers must submit an application to the chief county assessment officer, then if approved, the property’s taxes are significantly reduced from their estimated market value to a special or current use value. However, changing the use of the property from open space to another purpose triggers a three-year rollback of taxes based on the land’s highest and best use.

Lost ball?

Having an open space class of property for landowners provides communities with a host of environmental benefits. The downside is that since the law’s criteria are so general and relatively easy to meet, assessors have had a hard time denying applications. Meant to reduce taxes on tracts of land like parks and country clubs, the law has been expanded to include office campuses, sportsmen's clubs, airports, and shopping malls, simply because a portion of the land associated with these enterprises meets the “open space” definition.

Hitting the fairway

Golf courses have been the subject of several interesting court challenges:

• The first reported appellate decision held that while golf courses are entitled to open space classification, additional ground improvements on the course, such as greens, fairways and tees, can’t be assessed separately.** The court said that when non-structural improvements promote an open space purpose their value must be included in the open space value.
• Another decision held that the law calls for a uniform valuation for all open space property, regardless of its use.*** In other words, sales of wetlands and marshes can be used to determine an open space value for a golf course.
• A third court held that land, even if it is improved, may be granted open space status as long as it “directly relate[s] to and facilitate[s] the existence of the golf course”.****

Improving your game

Preservation of open space land benefits society. The open space assessment program is an attractive alternative for individual landowners and businesses that might otherwise be forced to sell their land for development because of rising taxes. If you believe your property may qualify for open space designation, the property tax team at Golan Christie Taglia is ready to help. Please reach out to Jim at jwchipman@gctspringfield.law or 217.280.5518.

Sources:
*35 ILCS 200/10-155 thru 165
**Knox Co. Board of Review v. Illinois Property Tax Appeal Board, 185 Ill.App.3d 530(1989)
***Lake County Board of Review v. Property Tax Appeal Board, 192 Ill.App.3d 605(1989)
****Onwentsia Club v. Illinois PTAB et al., 2011 IL App (2d) 100388; PTAB remand decision: Lake County Board of Review v. Illinois Property Tax Appeal Board, 2013 IL App (2d) 120429