Career Education and Keystone Property Group claim they need government assistance. Career Education says they cannot relocate their headquarters to the vacant building at 231 N Martingale without a 60% property tax break for 10 years.   This claim is weak and unsubstantiated for many reasons.

1. The commercial area around Woodfield is generally well-maintained and prosperous. This area is unlike truly blighted, crime-ridden, impoverished areas where buildings are abandoned for decades.  This building has a good chance of being rented eventually without a tax break if the Keystone Property Group took better care of the property.
2. Career Education wants to relocate to 231 N Martingale because of its inherent relocation value and would still relocate there even without a 7B.  Career Education may have looked at other lease options, but they have put quite a bit of effort into this property.   District 54 school board minutes indicate “CEC would like to tie down a 12-year lease in November and start the improvements as soon as possible” and “This property is of particular interest to CEC because there are so few facilities this large available”.  It is also close to their existing offices in Hoffman Estates.  Most corporate relocations consider a lot of factors.  I believe local property taxes would be too small an expense to cancel out all the benefit of the consolidation and relocation.
3. There is strong evidence that Keystone Property Group has had the intention of developing the building without government assistance ever since they bought the building. The Keystone Property Group webpage for the property clearly states to investors that they plan to upgrade the property from class B to class A.   There is no mention the property is blighted and dependent on a government subsidy to develop.    They have invested millions (possibly $11 million) in the building.  They bought it “as is” from J.P. Morgan for $17.3 million so they took responsibility for it.  An email on 8/10/2007 from Keystone to the Village reveals they intend to phase development based on what a future tenant would want.  That indicates that Keystone has additional undisclosed financial resources to develop the property.
4. Career Education stated that it applied for the 7B instead of the owner, 231 N Martingale Associates LLC, because it is responsible for real estate taxes.    The real reason that Career Education is the applicant may be to steer focus away from the owner and developer to avoid scrutiny of their financials and their roles in the deterioration of the building. Career Education goes on to makes a case for government assistance based primarily on its own finances.   That case is incomplete.   Who files the application and who actually pays the tax bill are irrelevant.   Any consideration of the need for government assistance needs to scrutinize the financial resource and past actions of all parties who benefit from this tax break.
5. No financials for Keystone Property Group or 231 N Martingale Associates LLC are disclosed. The owner and developer are part of the financing of the Career Education project.   Without this disclosure, the tactic of having Career Education file the application could just be a shell game to hide private money that should be used before taxpayer money is used.

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