On December 7, 2009, the Cook County Assessor denied Career Education Corp.’s application for a 60% property tax break.   Read the denial letter here. The Schaumburg Freedom Coalition submitted briefs in opposition to the tax break, citing numerous errors, misrepresentations, omissions, and a failure of the Village of Schaumburg to comply with State Law.

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Career Education 7B Blight Analysis

This is good news for taxpayers.  If Career Education and Keystone Property Group had succeeded in getting this fraudulent tax break, it would have cost taxpayers and local taxing bodies about $15,000,000 over 12 years. Credit is due to the Cook County Assessor Incentives Department and Department of Planning and Development for conducting a meaningful review and complying with letter and spirit of applicable State and County law.

Even though this happened on December 7, 2009, it was never made public.  Then on January 20, 2010,   several newspapers reported that Career Education had decided to move their headquarters to Schaumburg.   Also, on January 27th, the Village of Schaumburg issued a press release too. None of the articles mentioned the 7B tax break.  A quick call to the county revealed that the tax break for Career Education had been denied.

Career Education stated in their County 7B application “Without government assistance, Career Education would not be able to redevelop and occupy the abandoned property.”    For months, the corporate lackeys in the Village of Schaumburg planning department repeated that same empty threat.   Career Education lied.  Career Education and their consultants conducted an attempted tax scam.  The Village of Schaumburg aided and abetted them by doing zero due diligence and creating a phony and illegal blight area on Career Education’s behalf.

Had Career Education been truthful, they would have kept to their word and killed the move to Schaumburg as soon as they lost the tax break in December.   Career Education was bluffing all along to see what they could squeeze out of the taxpayers.

Why did the County reject the 7B?

• Career Education and the Village claimed the property was abandoned for 24 months prior to purchase and it wasn’t.  The building was not even eligible.
• A 7B is intended for blighted commercial property.  This property did not even come close to meeting the necessary five qualifications for blight.
• When the Village created this bogus “Commercial Blight Area”, they failed to hold a public hearing, failed to form a citizen committee, and failed to gather and evaluate facts and views and to prepare a redevelopment plan.   In short, the Village’s “blight area” was a sham that had everything to do with corporate tax breaks and nothing to do with legitimate blight, as the laws intended.

I made these same arguments and quite a few more to the Village Board.  They had a chance to do the right thing, but chose to fabricate the sham blight area anyway.     At least the County actually listened to reason.

Career Education probably assumed this would be a lot easier.  They thought the Village of Schaumburg would rubber stamp just about whatever they wanted.  They were right about that.  Fortunately for the taxpayers, they hired an inept and dishonest consultant, True Partners Consulting, who wrote two biased, inaccurate blight reports and fed faulty legal advice to the Village.   The Village then failed to do any due diligence and failed to catch the faulty legal advice.  The Village secretly rushed through an expanded and even more bogus blight area in a last ditch effort to salvage the phony tax break.

Lastly, I believe the Schaumburg Freedom Coalition did have a significant effect on the decision, by making the County aware of the faults in the application. The good news is that ultimately Career Education decided to move to Schaumburg anyway based on the inherent business case and not at the expense of taxpayers.  The free market works.  When government tries to use taxation and force to favor one business or taxpayer over another, it leads to abuse and unfairness.

It is in injustice when businesses are charged wildly different property tax rates based on how well they can navigate the political system. The Schaumburg Freedom Coalition will attempt to remedy those injustices when we can, and save honest taxpayers millions.

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