Perched on a bluff along Lake Michigan’s shoreline in Winnetka is a brick-and-stone mansion that has six bedrooms, six bathrooms and a swimming pool. It’s owned by Jill Fitzgerald, an 84-year-old widow whose family made a fortune distributing produce to Chicago restaurants.
The mansion is worth $7.1 million, according to Cook County Assessor Fritz Kaegi. Yet Fitzgerald has gotten massive tax breaks under Illinois’ low-income senior citizens assessment freeze, a program that allows people 65 and older with a household income of no more than $65,000 to get tax relief on their primary residence.
Thanks to the government program, Fitzgerald has seen her property tax bills slashed by more than $467,000 over the past dozen years, according to Cook County records. Her tax break this year alone was more than $67,000.
Created 30 years ago to prevent senior citizens from being priced out of their homes by soaring property taxes, particularly in gentrifying neighborhoods, the law allows county assessors to freeze the property assessments for qualified seniors every year, even as their property value soars.
While Kaegi’s current valuation of the mansion is $7.1 million, Fitzgerald has to pay taxes only on the value that the house was assessed at in 2015 — $1.2 million.
To get the tax break, all that Fitzgerald has to do every year is to say she’s qualified — over 65 and with an eligible household income. Like anyone else applying for the tax break, she wasn’t required to provide any documentation to confirm her household income didn’t exceed $65,000.
And the assessor’s office doesn’t do anything to verify the income listed on those applications — unless someone questions them.
Now, based on a Chicago Sun-Times investigation, Kaegi’s office has reviewed Fitzgerald’s application and others and is demanding proof from 10 property owners who’ve gotten the senior freeze that they qualify.
His staff reviewed Fitzgerald’s senior freeze eligibility in response to questions from the Sun-Times based on voter rolls and other public records indicating family members appear to be living in the mansion with incomes that could make her ineligible for the lucrative tax break.
Prompted by those questions, Kaegi found that Fitzgerald — who saved more on property taxes than any other Cook County homeowner with a senior freeze this year — had sold two apartment buildings for more than $2.5 million six years ago while she was getting the tax breaks on her home.
Kaegi has sent Fitzgerald a letter demanding that she prove she qualified for the tax breaks or face the prospect of having to repay the money she saved, plus penalties and interest.
Fitzgerald isn’t the only homeowner facing questions over the tax break. After the Sun-Times asked Kaegi to explain the senior assessment freezes he approved for 20 properties, 15 of those are now under review.
The Sun-Times examined 98,892 properties that were granted a senior assessment freeze this year — a tax break that saved those property owners $263 million in property taxes, shifting that tax burden to other residential and commercial landowners in Cook County.
Senior tax break — at 54
Kaegi’s office also is now questioning a tax break it granted to Armando Saleh, a City Hall lobbyist who formerly was chief of staff to a Cook County commissioner. Saleh has been getting the senior assessment freeze on two Chicago apartment buildings — even though the tax break is available only for a senior’s primary residence.
And, at 54, he’s 11 years too young to qualify for the tax break.
For several years, Kaegi has gotten separate applications attesting that each Saleh property has a household income no greater than $65,000. Yet Kaegi approved the tax breaks. That has saved Saleh and his wife at least $49,684 over the past decade.
A previous Sun-Times investigation into Kaegi’s handling of senior assessment freeze applications, in 2021, showed the program was riddled with errors. It resulted in five homeowners repaying their wrongful tax savings, plus penalties and interest.
Now, the Sun-Times has found that Kaegi’s office has failed to correct many of the problems uncovered three years ago.
Among them: His staff has continued to grant senior assessment freezes to properties owned by businesses even though the tax break is legally available only to individuals.
Kaegi also has given senior assessment freezes to people who claimed the tax break on more than one property and has approved the tax breaks without verifying applicants’ income or age — even though applications must include a driver’s license or other government identification.
Asked about the senior assessment freezes for 20 properties, Kaegi spokesman Christian Belanger says those given to Fitzgerald and Saleh are among 15 now under review.
“Our Erroneous Exemptions department made an initial determination that the exemptions were incorrectly claimed and sent a notice to the taxpayer informing them that, unless they want to dispute their case, they must pay back the savings accrued through the exemption,” Belanger says. “This notice isn’t a final determination — the taxpayer still has the opportunity to submit evidence that the exemption was not erroneously claimed, or to request a hearing on the matter.”
Among the homeowners who had to pay up as a result of the Sun-Times investigation three years ago were Martin and Barbara Israel. The tax bill on their 3,300-square-foot condo on the 58th floor of Water Tower Place with stunning views of Lake Michigan had been just $2,500. At the time, they were trying to sell the unit — for $3.3 million.
Kaegi ordered the couple to repay $119,806 in taxes, penalties and interest. This year, the couple’s tax bill totaled $38,238 — 15 times more than they were paying before the Sun-Times began asking questions.
That’s one of the largest “erroneous exemption” cases for Kaegi’s office since January 2019, shortly after he was elected assessor. His staff has found 9,955 homeowners whose taxes were reduced by tax breaks they weren’t entitled to — everything from the basic homeowner’s exemption to the disabled veteran exemption. Those homeowners were asked to pay a total of $69.3 million in taxes, penalties and interest. Some have repaid the money, records show. Others haven’t.
Those cases included 671 homeowners who lost their senior assessment freeze and had to repay a total of $3.1 million.
Five of them were asked to repay a total of $776,074 in the wake of the 2021 Sun-Times investigation — including the estate of a dead mobster whose family kept getting the senior freeze exemption six years after his death by submitting annual applications in his name. Kaegi has filed a lien on the Bridgeview home, aiming to collect $16,271 when someone buys the home, which is in foreclosure.
‘Difficult to monitor’
Scott Smith, Kaegi’s chief of staff, says “many” other property owners investigated by the Sun-Times were later cleared of any wrongdoing by the assessor’s office and says the agency’s doing a good job.
“It is difficult to monitor the exemption process,” Smith says. “We do a pretty good job of catching folks. We’re finding about seven erroneous exemptions a day’’ among the more than one million residential property owners.
Smith says Cook County government’s mainframe computer has made it difficult for the assessor’s staff to ferret out homeowners who are getting exemptions they aren’t entitled to. He says the county’s property records will be moved to a new computer system sometime in the next few months and that it should make it easier to query the database to, for instance, find people who are getting exemptions on more than one property.
Kaegi will still have to rely upon the Illinois Department of Revenue to confirm an applicant’s household income.
Illinois lawmakers passed the senior assessment freeze in 1994, hoping it would keep seniors from being forced to sell their homes to escape skyrocketing taxes. But then-Gov. Jim Edgar vetoed it.
“I had to be the fiscal disciplinarian,” Edgar said three years ago. “Anytime you have changes to the tax code, you don’t know how it’s going to turn out, and people are going to game the system.”
The Illinois General Assembly overrode Edgar’s veto, and the senior assessment freeze has become a headache for Kaegi and other assessors. They say it’s difficult to verify a person’s income and to make sure that homeowners aren’t getting tax breaks on more than one property elsewhere in the county, state or country.
Of the more than 308,000 Illinois homeowners who got the senior freeze in 2022, nearly 32% live in Cook County, according to the most recent data from the state revenue department.
Ed Burke got them breaks
James and Jill Fitzgerald made their home in a Winnetka mansion overlooking Lake Michigan while he ran his successful produce wholesale business on the Southwest Side, making small campaign contributions to then-Gov. George Ryan and other politicians.
After James Fitzgerald’s death in 2008, his children took over the business, while his widow continued living in the mansion. At some point, the family hired the law firm of Edward M. Burke, then the most powerful member of the Chicago City Council, to repeatedly seek cuts in their property assessments on the business and mansion.
Jill Fitzgerald applied for the senior freeze in 2011, and then-Cook County Assessor Joseph Berrios approved it. She’s been receiving it ever since.
It’s unclear whether Burke had anything to do with her application. He’s now serving a two-year prison sentence for extorting city contractors to hire his law firm to appeal their taxes. His former firm still works for the Fitzgerald family.
The first year, Fitzgerald saved $43,051 in taxes, county records show. Altogether, the senior freeze has reduced her tax bills by $467,206, while she paid more than $1 million in taxes.
She submitted her most recent senior freeze application earlier this year, asserting that her household income is no more than $65,000. That yielded her a tax savings of $67,758 this year.
It’s impossible to know Fitzgerald’s sources of income because senior freeze applications aren’t subject to public inspection. But voter registration rolls show her son Michael Fitzgerald, his wife and a grandchild registered from Jill Fitzgerald’s house in 2022, shortly after they sold their Wilmette home.
Michael Fitzgerald is listed as the mansion owner in various documents he filed during the past two years with the U.S. Army Corps of Engineers, the Illinois Environmental Protection Agency and the village of Winnetka to obtain permission to repair a 180-foot-long revetment in Lake Michigan to prevent additional erosion of the bluff on which the home is built.
It’s unclear whether he and his family live with his mother, and, if so, whether their income was included in the application she submitted to the assessor to obtain the senior freeze this year.
Kaegi’s staff says the Illinois Department of Revenue has confirmed that the widow’s income was less than $65,000, but they didn’t check to see whether anyone else filed tax returns at that address.
Prompted by the Sun-Times inquiry, Kaegi’s staff discovered the widow and her trust sold two apartment buildings in Oak Lawn for $2.5 million in 2018. They sent her a letter advising her to verify her household income, or face having to repay the tax savings plus penalties and interest.
Jill Fitzgerald couldn’t be reached for comment. Her son didn’t return messages.
Senior freeze — in their 20s
Saleh and his wife Maria Manzano own two small apartment buildings, one in Gage Park and the other on the Near West Side. Over the past 26 years, county records show, they have gotten senior assessment freezes on both properties, often at the same time.
Kaegi’s staff can’t explain why they approved the tax breaks for both properties or why they didn’t know the Salehs are too young to qualify for the senior freeze.
Days before his 23rd birthday in August 1993, Saleh and Manzano paid $144,000 for a two-flat in Gage Park. Two years later, he joined the staff of Cook County Commissioner Joseph Mario Moreno, rising to chief of staff before he left in October 1998.
Around that time, county records show, then-Cook County Assessor James Houlihan granted a senior assessment freeze for the Saleh property in the 5200 block of South Troy Street even though Saleh and Manzano were in their 20s.
It’s unclear how that happened. But records show they claimed — and were granted — a senior freeze as far back as 1995, along with the homeowner’s and senior exemption. The senior exemption is a separate tax break that applies to any homeowner 65 and older.
Over the past four years, the senior freeze has saved the Salehs $4,406.
While they were collecting the senior freeze on the Troy property in 2001, Saleh and his wife paid $150,000 for an apartment building in the 2500 block of West Flournoy Street. They began receiving a senior freeze on the property in 2004, along with the homeowner’s and senior exemptions, county records show. During the past 10 years, the senior freeze saved them $45,278 in taxes on the Flournoy property.
Asked why he has senior assessment freezes on two properties, Saleh says, “My mom and my dad live there.”
Their names aren’t on the deeds to either property.
Kaegi’s staff says it’s possible Saleh could get a senior freeze on one of his buildings if his parents are responsible for the taxes, but the assessor’s office notes that it issued “certificates of error” on both properties in 2021 to Saleh, not to his parents.
Saleh, a registered lobbyist for PepsiCo, didn’t respond to messages to discuss the tax breaks on his two properties in detail. He also owes $35,886 in income taxes to the Internal Revenue Service for 2014 through 2016 — while he was getting the tax breaks on his buildings.
READ MORE
Click to read the June 27, 2021, Sun-Times investigation of widespread errors in Cook County’s handling of the senior freeze tax program.