Mayor Brandon Johnson’s administration is pushing to intervene in a lawsuit filed by real estate industry groups that aims to invalidate a referendum that could raise the city’s property transfer tax. A city attorney at a Wednesday hearing argued the complaint against the local Board of Elections was brought against the wrong entity.
Industry groups, led by the Building Owners and Managers Association of Chicago, filed the lawsuit against the Chicago Board of Elections on Jan. 5. They allege that the wording of the ballot question violates the Illinois Municipal Code and Illinois Constitution because it asks voters to approve a transfer tax decrease as well as two transfer tax increases in one question.
The city of Chicago filed a motion to intervene in the case on Friday which, if granted, would add it to the case as a named defendant. In a Wednesday morning hearing before Cook County Circuit Court Judge Kathleen Burke, the city’s attorney argued that the Board of Elections is not equipped to answer the arguments because it doesn’t have the same understanding of the municipal code.
“It’s pretty clear that the city should be allowed to intervene in this case,” the attorney, Susan Jordan, said in her oral argument. The Board of Elections can’t answer industry groups’ allegations about whether the referendum does or doesn’t follow local municipal code; the Board of Elections follows the election code, she said.
If passed by a simple majority of voters, the referendum would increase the real estate transfer tax imposed on sales over $1 million to fund services for people experiencing homelessness, including quadrupling the 0.75 percent rate the city currently charges for deals over $1.5 million.
The rate would drop to 0.6 percent for property trades less than $1 million, affecting the majority of home purchases. Advocates of the plan estimate that upward of 95% of sales would see a transfer tax decrease. They also estimate that the tax would generate an additional $100 million in dedicated funds for these services each year.
The city is asking the judge to grant it “intervention by right” because the city’s interests won’t be adequately protected without being brought into the case and the city would be bound by the outcome of the case. Johnson repeatedly promised to support the transfer tax hike during his election campaign.
Michael Kasper, the attorney representing the industry groups, argued that the city’s motion to intervene was not timely, given that it was filed nearly five weeks after the lawsuit was first filed at the start of the year.
“These cases move extremely quickly,” he said. The plaintiffs have already filed a motion for judgment on the pleadings, asking Judge Burke to weigh in on the validity of their complaints, meaning Wednesday feasibly could have been the last hearing in the case, Kasper argued.
In response, Jordan, the city’s attorney, argued that it took industry groups nine weeks to file a lawsuit challenging the ballot language after the resolution to put it on the ballot was passed in the fall.
As for whether the city is bound by the results of the case, Kasper argued that “the city neither prints nor counts ballots.”
If the referendum is struck from the ballot, the city would have no adequate way of remedying that in time for the election and would not be able to proceed with implementing the new proposed transfer tax, Jordan argued. This, she claimed, means the case affects the city and cannot be fairly and effectively argued without the city’s involvement.
Together with its motion to intervene in the case, the city and the attorneys with the Board of Elections have also filed motions to dismiss the case. The Board of Elections filed their motion to dismiss the case first on the grounds that it was outside of its jurisdictional authority.
“You’re suing someone who has no expertise in this area and has no dog in this,” said Adam Lasker, one of the attorneys representing the Chicago Board of Elections. Given that the referendum was passed by a resolution of the City Council, and not by a citizen-backed petition, it is “expressly excluded” from the Board of Elections’ authority, Lasker said.
At the end of the hearing, Judge Burke said she would take the arguments made under review and respond with a ruling in the coming days. Ed Mullen, the attorney representing the organizers behind the referendum known as Bring Chicago Home, said his best guess is that the referendum’s opposing campaigns will have an answer by Friday.
“We think that the plaintiff’s suit is without merit,” Jordan said after the hearing, before declining to comment further. Despite this pending lawsuit, the Illinois Realtors association and Bring Chicago Home advocates have together dedicated millions of dollars to reaching voters in the month before the March 19 election.
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Robert Khodadadian has long had a simple philosophy about selling real estate. There are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller.
Uncategorized, Bring Chicago Home, Property Taxes, Transfer Tax The Real DealRead MoreMayor Brandon Johnson’s administration is pushing to intervene in a lawsuit filed by real estate industry groups that aims to invalidate a referendum that could raise the city’s property transfer tax. A city attorney at a Wednesday hearing argued the complaint against the local Board of Elections was brought against the wrong entity. Industry groups,
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