Real estate industry’s transfer tax win faces second court appeal

Real Estate Industrys Transfer Tax Win Faces Second Appeal f

Chicago real estate players may want to hold off on any further celebration of a judge’s ruling against Mayor Brandon Johnson’s transfer tax hike.

After a Cook County judge decided last week that votes shouldn’t count for the so-called Bring Chicago Home referendum on the March 19 election ballot — which would increase the city’s bite out of large real estate deals, if passed by voters — the city’s Board of Elections wants her ruling overturned.

The Chicago Board of Elections announced Tuesday that it will appeal against the win for the real estate industry in the lawsuit that invalidated the transfer tax referendum supported by Johnson.

The board’s decision to appeal follows City Hall making a similar announcement Monday that it seeks to reverse Judge Kathleen Burke’s ruling that the city couldn’t intervene in the complaint filed against the board by a group of real estate trade groups.

There’s now at least two potential paths proponents of the tax hike for property sales over $1 million could take to restore the measure in time for voters to decide next month.

The board’s plan to appeal adds a new layer to the court fight. Because even if the city won a ruling from the appellate court that it could in fact intervene in the case, that would likely only overturn part of Burke’s decision and kick the case back to the Cook County Circuit Court to be litigated again with the city’s input.

With the Board of Elections now appealing, the judge’s overall ruling in favor of real estate trade groups could be reversed, because the Illinois Appellate Court could potentially decide whether to dismiss the lawsuit entirely.

Before Burke handed down her ruling Friday afternoon, the Board of Elections had filed a motion to dismiss the lawsuit filed against it by the various real estate trade groups, which were spearheaded by the Building Owners and Managers Association of Chicago.

In filing suit against the board, the trade groups claimed that the city’s ballot question about implementing a new tiered structure for property transfer taxes to fund services to prevent homelessness — a campaign also known as Bring Chicago Home — violates the Illinois Constitution and Illinois Municipal Code.

They claimed that asking voters about both a tax decrease for sale prices under $1 million and an increase for real estate deals totaling $1 million or more constitutes a version of “legislative logrolling” that is prohibited in order to prevent voters from deciding on proposals that would turn both popular and unpopular policies into law with one action.

The Board of Elections asked the judge to dismiss the lawsuit on the grounds that it should have been filed against the city, given that the board doesn’t deal with matters of the Illinois Constitution or the Illinois Municipal Code.

“The Board maintains that it is not a proper defendant in this case, and that the city of Chicago is a necessary party,” board’s spokesperson Max Bever said Tuesday. “The Board will request an expedited review by the Illinois Appellate Court.”

This adds a risk for the real estate industry groups that celebrated Friday’s win and means that the appeals process could move quickly.

City attorneys have claimed that, without their involvement, there hasn’t been anyone to adequately respond to arguments made by the trade groups’ attorneys, according to court documents filed by the city.

So far, it’s unclear when the appellate court decision could be reached. Because the transfer tax question still appears on ballots since they were printed before Burke invalidated the measure, it’s possible a successful appeal could lead to votes on the policy being counted, though Michael Forde, an election law attorney, has told The Real Deal he believes it’s unlikely.

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