Pilsen Vows to Hang on to Community

by Judi Strauss-Lipkin

Beth and Willie Wagner are the owners of Honky Tonk BBQ in Pilsen. The restaurant has won the Memphis in May award for its pulled pork, and it serves St. Louis spareribs/baby back ribs – the real deal: slow-cooked barbeque with three signature sauces. The Wagners have owned the corner building at 1800 Racine in Pilsen for 36 years, and they live upstairs.

“Pilsen is our home, our neighborhood,” Beth Wagner said. “Everybody knows you. Everybody cares about you. If you need help, they are there. We are a very tight community. Many of the buildings were Mom and Pop stores, with the business downstairs and their home upstairs – just like ours.”

But the Wagners were among those hit hardest by the second installment of 2022 Cook County property taxes – up in Pilsen by 46 percent over last year, largely due to assessments based on property value, and also nearby real estate sales. The second tax bills for 2022 arrived in late November instead of August and were due by year end. The first installment for the current year arrived soon afterward, in February, with payments delayed this year until April 3. This second installment was a huge shock to many people. They worried about coming up with quick cash to pay the bill, but also whether they can afford to remain in communities they love and have nurtured.

“Ten years ago, there was not a single condo building in Pilsen,” Beth Wagner said. “For a long time, Pilsen was sort of invisible. Homes changed hands, families sold to other families and the value of the properties were kept ‘in the family.’ Then, it was like Christopher Columbus ‘discovered’ our neighborhood. Yes, people fought landmark status, so it did not happen. Developers started buying properties and building/changing our home. A young couple bought the building next door for ‘big bucks,’ which caused the assessed value of our building to rise dramatically.”

Two blocks west of Honky Tonk BBQ, Thalia Hall at 18th and Allport is a landmark dating to Pilsen’s time as a Bohemian neighborhood, built in 1892 by John Dusek to bring arts and entertainment from the old country. The building featured ground floor commercial storefronts, residences and community gathering spaces. However, in recent years it has been empty. The building was sold for $3.2 million in 2013 and converted into a beer-focused restaurant, a cocktail bar serving punch and an event space.

So, Wagner said, “our family-oriented and loved neighborhood was gentrifying. As the developers moved in, prices rose. Then assessments rose. Then real estate taxes rose as well. As properties sold for millions, lots and houses and buildings were “worth more” on paper and real estate taxes rose.

A vacant lot the Wagners have owned for 25 years has won several awards for its beautification. But its real estate taxes skyrocketed this year – for vacant land. The real estate taxes on their building (with both the restaurant, their home, and apartments) climbed to $75,000. Beth said she herself fought the unfair assessment and tax increase for two years - with the office of Cook County Assessor Fritz Kaegi.

She finally “won” her tax appeal - and was given a handwritten bill. She wrote a check for the taxes, which were substantially reduced. Now, she said, individuals can no longer fight these increases themselves; they must hire attorneys to do so.

Beth wondered, as do so many longtime Pilsen residents, “Where would I go? What can we afford?

“A lot of businesses went into debt during the pandemic; we borrowed and got government funds to pay our employees and stay in business. This is our neighborhood. This is our home. This is our restaurant, which we love. What is next?”

Facebook photo

Why property taxes went up

Cook County property taxes increased overall by $614 million (3.8%) over 2020. Homeowners picked up $330 million (53.6%) of those taxes and businesses the remainder (46.4%).

“Market forces,” or prices paid for neighboring real estate, factor into property tax bills, according to tax analysis from the office of Cook County Treasurer Maria Pappas. That’s why affluent areas along the north lakefront and former working class neighborhoods that are now gentrifying saw their taxes jump dramatically, while struggling Black neighborhoods watched them fall.

On the Lower West Side, for example, a predominantly Latino neighborhood three miles southwest of the Loop, the median bill is $7,239, an increase of $2,275, or 46%. Other hot neighborhoods included:

• Avondale, a Latino majority community on the Northwest Side, $7,601, an increase of 27%;

• Logan Square, $8,609, an 18% increase;

• Irving Park, $6,999, a 21% increase;

• North Center $11,463, an 11% increase – the highest median residential tax bill in the city.

However, property taxes went down in Black neighborhoods on the South and West Sides:

• West Garfield Park, $1,345, down 45%

• Fuller Park, $909, down 46%

• Englewood, $804, down 44%

A second factor behind higher property tax bills is higher levying for the budgets of the City of Chicago (up $94 million) and Chicago Public Schools (up $114 million).

There is also a new state law with a “recapture provision” that allows many local governments to recover the total of any taxes refunded to property owners who appealed their taxes the previous year. The new recapture law added $131 million overall to Cook County tax bills.

Delinquent Property Sales

According to Cook County Treasurer Maria Pappas’s office, there are two kinds of sales regarding delinquent property:

• Annual tax sale. After 13 months of delinquency, someone can “buy” the unpaid taxes and pay them. That person will have a lien on the property. The original owner can redeem the property by paying the taxes and interest within 2.5 to three years.

• Scavenger Sale. This sale happens every two years and the next will be in 2024. The scavenger sale is for properties –many of them abandoned or delapidated – where the owner has been delinquent for three or more years over the past 20 years. The owner has 2.5 years to petition the courts before a buyer goes to deed on a property.

State law allows Cook County to provide taxpayers more time to pay delinquent taxes than other counties. There’s about 13 months from the second installment due date until the tax sale begins in Cook County, whereas other counties allow roughly 120 days from the due date.

Pappas’s office crafted SB 2395, now in the Illinois Senate, to help people who are behind on their property taxes. Sponsored by state Sen. Ram Villivalam (D-Chicago), the bill would lower the monthly interest rate on delinquent real estate taxes from 1.5 percent monthly, (18 percent annually), to 0.75 percent monthly, (9 percent annually).

Thalia Hall

Thalia Hall

“We know that Pilsen is a goldmine in terms of location,” said Teresa Fraga, an executive board member and treasurer of the Pilsen Neighbors Community Council and co-chair of the Pilsen Planning Committee. “It is 10 minutes from downtown, great hospitals, and all expressways. We know people want to live here.”

Fraga has contended with gentrification in Pilsen – working to keep housing prices, property taxes and utility costs manageable for lower income residents – since the 1990s. Fraga moved to the United States when she was 7 years old, worked as a migrant farm worker around the nation, moved to Chicago with her husband and three children in 1966, settled in Pilsen and bought a home there in 1981. They are retired, living on a fixed income.

Since the 1970s, “Pilsen was totally rebuilt by the Mexican community that still lives here,” she said in a telephone interview. “We fixed buildings and brought them up to code by our own sweat. A new high school was built, a building for Public Health and even a new library. Pilsen is a community that has created organizations to help and bring resources to our people. In the late 1970’s and early 1980s, we stopped redlining and forced banks to give loans for properties/homes east of Ashland. We had a simple questionnaire distributed in churches - asking people, ‘Would you buy a home in Pilsen?’ Overwhelmingly, they said, ‘YES!’ We showed the survey to the banks and won - we did and we can fight.

“Now the real estate taxes are going way up,” she said. “What we want and think the Assessor’s office, the [Cook County] Treasurer’s office and the State of Illinois should do is work to fix this. What is this? Real estate taxes in our working-class community of Pilsen more than doubled in late 2022. We held a public meeting on December 14 in Dvorak Park and over 500 people came. We asked them to sign in, with their contact information, and asked how much their real estate taxes had increased. Many of them said more than double. My own first installment was $2,111; the second installment was $14,729. I thought – this must be a mistake! Another Pilsen resident saw his property value increase from $400,000 to $1.2 million in one giant increase."

Teresa Fraga

WTTW photo

Cook County Board of Review Commissioner George Cardenas told WTTW that the system does not work because of the of the valuation model, where individual tax bills rely on the neighborhood housing market.

Geoff Smith, executive director of the Institute for Housing Studies at DePaul University also told WTTW that Pilsen has seen rapid growth in property tax value compared to other Chicago neighborhoods, because of the community’s location: its proximity to downtown, perceived Chicago access to transit, great housing stock, and vibrant commercial corridors. All of those things make an attractive neighborhood.

But, Fraga said, “We know how to fight for our communityand protect our community - we are very organized. We have been to the offices of the Treasurer and the Assessor and told them, we need an immediate solution to these bills. People cannot afford to put this increase in their budget.”

Fraga did fight and win - for herself and many others. She called the Assessor’s office, corrected the parcel number, and got her annual 2022 real estate taxes reduced to $3,685.56 from the proposed $16,490.56.

Pilsen Neighbors is also seeking a moratorium on late fees for paying taxes. Most of all, they want to be sure that unpaid property bills this year do not go on a scavenger sale list.

The Assessor’s Office did listen to Fraga and her Pilsen neighbors. Following a protest outside the Cook County Assessor’s office on January 12, where they demanded a solution for this issue, Pilsen Neighbors partnered with St. Paul’s Church, Centro Sin Fronteras, The Resurrection Project and St. Pius Church to host a community meeting with Assessor Kaegi and his office in February at Benito Juarez Community Academy.

In addition, the Cook County Assessor’s office organized three workshops in February for Pilsen homeowners and business owners to guide them through the process to “fix” their tax bills. Fraga and the Pilsen Neighbors Community Council continue to work for the residents and have an active Facebook page to keep them (and us) informed.

Two offices in Cook County government are responsible for tax bills: the assessor and the treasurer. The assessor determines fair market value of private homes and commercial properties. Then, the office apportions taxes based on individual shares of the budget levies of all taxing bodies in their area, from the City of Chicago to Chicago Public Schools, libraries, park districts, forest preserves and more. The treasurer collects the taxes and distributes the money to taxing bodies.

According to the office of Cook County Treasurer Maria Pappas, there cannot be a moratorium of penalties and late fees and interest. Collecting real estate taxes by the due date has always been written in state law, because the money is needed to pay the bills for police, fire, schools, etc.

Just the same, Gov. J.B. Pritzker did “push back” the due date for the first installment of 2023 taxes to April 3 from March 1 due to the late arrival of the second installment in 2022.

A public meeting regarding the tax hike with Pilsen Neighbors and other Pilsen community organizstions and the Cook County Assessor, the Board of Review, and local and state elected officials

Pilsen Neighbors Community Council Facebook photo