Council member had a homestead exemption on his entire house, including two rental units
Investigative Report by Ken Martin Updated Thursday, August 21, 2014 10:25am to add additional document links
Chris Riley
In January 2002, Council Member Chris Riley bought a house at 1310 San Antonio Street in downtown Austin. For 11 years he enjoyed a homestead for the entire property—despite the fact that two upstairs units have been rented for most if not all those years.
An anonymous complaint filed with the Travis Central Appraisal District June 20 resulted in removal of the homestead exemption for the 46 percent of the property that is rented. Riley retains the right to claim 54 percent of the property for his homestead.
Yesterday Riley responded to an inquiry from The Austin Bulldog and provided a copy of an e-mail he sent to the Travis Central Appraisal District (TCAD) June 19, 2014, the day he found out about the complaint.
“I was made aware of this issue via a constituent letter received by my office on June 19, 2014,” Riley stated in his response to our inquiry. “I immediately called TCAD about it, and based on their instructions I sent the following e-mail that night.” (A copy of Riley’s e-mail received by the appraisal district is linked at the bottom of this story.)
The Travis County Tax Office billed Riley for $7,294.87 for back taxes for the tax years 2009 through 2013. Riley paid that amount August 15, said Susan Zavala, tax supervisor for property tax collections in the Travis County Tax Office.
Although Riley paid back taxes for the years 2009 through 2013, he was not billed for $1,208.21 that he would otherwise have owed for the tax years 2003 through 2008, because the law permits removal or reduction of a homestead exemption for only five years.
When asked by The Austin Bulldog if he would voluntarily pay the back taxes for the additional years, Riley stated in an e-mail, “If we can determine the right additional amount going back to when I bought the house and a process for paying it, I’ll be glad to do that.”
The Austin Bulldog provided to Riley a copy of the calculations obtained from the Travis County Tax Office that show the additional amount is $1,208.21.
The tax office requested guidance from the Travis County Attorney’s Office as to whether the additional payment can be accepted and how payment might be processed. The result was that, because the exemptions for prior years 2003-2008 legally cannot be removed, the tax office can neither bill Riley nor accept payment, said Monica Rutt, associate deputy for collections in the Travis County Tax Office.
How did this happen?
Lorri Michele
Zavala said Riley was initially billed for back taxes July 8. In response, on Riley’s behalf, tax attorney Lorri Michel of the Michel Law Firm PC called the tax office.
As a result of that call, the tax office consulted with the Travis Central Appraisal District to obtain a revised calculation of the amount of taxable property value that can be increased each year, due to a law that caps such increases at a maximum of 10 percent per year. (Taxable value is the assessed value. Market value reflects the full value assigned by the appraisal district.)
Once recalculation of the cap was accomplished, the final bill for back taxes was issued August 6.
The larger question concerns why Riley’s property was given a 100 percent homestead exemption in the first place.
Riley points out that the exemption application form contains no question or space on the form to indicate that the owner is requesting a partial homestead exemption.
“When I first moved in, I was told that the house was eligible for a regular homestead exemption, so I applied for one, and answered all questions on the application truthfully,” Riley’s June 20 e-mail to the appraisal district states. “There was, and still is, no question on the application form about allocating space to apartments. TCAD approved the exemption, and I assumed TCAD was making any necessary adjustment to account for the presence of apartments.”
Riley further noted that the online record for the property, in the space labeled “Improvement #1,” the record clearly states that the home is a “fourplex.”
“I’m sorry for any misunderstanding about the allocation of space in my house. If any back taxes are owed, please let me know. I will be glad to pay any amounts due,” Riley’s June 20 e-mail states.
Both Michele and Riley contend that the Application for Residence Homestead Exemption, Form 50-114, which is designed by the Texas Comptroller of Public Accounts, should be revised to include space to designate portions of a home that do not qualify as being part of the homestead.
Rental history
The annual Statements of Financial Information that Riley filed with the Austin City Clerk for the years 2008 through 2013 indicate that he reported renting portions of his house as far back as 2008.
No public records exist to indicate whether Riley rented portions of the house in earlier years. The Austin Bulldog notified Riley that his sworn financial statements covering the years 2008 through 2013 indicated he rented portions of his home to tenants, and asked when he began renting.
Riley replied that an artist was already living in the house when he bought it. The artist stayed during renovations and was to pay rent during months in which the house had electricity and water service. He has had tenants since renovations were completed, he said.
Appraisal district actions
Riley bought the house from Jimmy Nassour January 31, 2002, according to the deed record.
He filed an application with the Travis Central Appraisal District for a homestead exemption May 13, 2003, and requested that the exemption include the prior tax year of 2002.
The appraisal district granted the homestead exemption for tax year 2003 and denied the exemption for 2002 because he did not own and occupy the property as of January 1, 2002, as required by law to qualify for a homestead exemption for a tax year.
On June 19, 2014, the appraisal district received an anonymous complaint about Riley’s homestead exemption.
The next day the district’s Exemption Department mailed a letter to Riley notifying him that his exemption for the tax years 2009 through 2013 had been reduced to 54 percent and the change would affect his tax liability for the affected years.
But that’s not stopping the Travis County Democratic Party from helping candidates
Updated Tuesday August 19, 2014 8:45pm
David Butts
In Deep Blue Austin the apprehension about having a Republican on the City Council was exploited by political consultant David Butts at a meeting of the Central Austin Democrats, back in 2012 when he was stumping for passage of the 8-2-1 plan. Peck Young was on the same program, pushing for passage of the 10-1 plan brought to the ballot through a petition drive conducted by Austinites for Geographic Representation.
Butts said, you know if we have 10 council districts we’re going to have a Republican on the City Council, surely a statement meant to strike fear into the hearts of the Democrats listening.
Sitting in the audience and hearing this, I thought to myself, well what’s wrong with a little political diversity, to go along with the geographic diversity that we’re going to have with council districts?
Turns out there’s a lot wrong with it, according to J.D. Gins, executive director of the Travis County Democratic Party.
J.D. Gins
Gins believes the Travis County Republican Party is recruiting candidates to run for Austin City Council and fears if elected they will be able to build a platform to later run for state representative. Then the Democratic Party will have to spend a lot of money fending them off.
“There’s no way the GOP can’t see this as the only way to build a base in Travis County,” Gins said in a July 22 interview.
Yet the Travis County Republican Party, so far at least, is taking a hands-off approach to the city elections.
Andy Hogue
Andy Hogue, communications director for the Travis County Republican Party, said on July 21 interview, “Since it’s the first day of filing (to get on the ballot) we’re reluctant to say who our favorite candidates are but we’re grateful to have a chance to elect some conservative candidates to challenge the monolithic liberal regime we’ve had for decades.”
Hogue said the Republican Party has offered no training to council or mayoral candidates.
“If we did make a decision to train or endorse that would have to come from our executive committee and it’s not on the agenda. We’re too early in the process.”
Ellen Troxclair
District 8 candidate Ellen Troxclair is chief of staff for State Representative Jason Isaac (R-Dripping Springs), a Tea Party favorite. She responded to an inquiry with a July 24 phone message, saying, “I am not being helped at all by the Republican Party.
“It’s a nonpartisan race,” she said.
“I’m focusing on issues that I feel like people on both sides of the aisle care about, like property taxes, road infrastructure, and responsible spending. I don’t think I need help from any kind of party to get that message out there.”
Becky Bray
District 8 candidate Becky Bray said she has not reached out to anyone in the party for support.
“I am not currently receiving any support from the Travis County Republican Party,” she said in a July 23 interview.
Over the years the Republican Party has offered training to candidates for higher office on a system called GOP Data Beacon, run by the Republican National Committee.
“GOP Data Beacon integrates voter and volunteer information with innovative data solutions for campaigns, committees, and other GOP organizations,” the website states. A smart phone app for databeacon is available for iPhones. One website described it as “a tool designed to make canvassing easier, more efficient, and more tech-friendly for GOP campaign volunteers. The app will allow volunteers to track their progress on given routes, record responses given by voters on their political preferences, and to upload it back to the Republican National Committee’s CRM tool.”
Democratic Party definitely assisting
The Travis County Democratic Party is helping mayoral and council candidates who are deemed sufficiently loyal to the party. To get that help the candidates must sign an Oath of Affiliation per the rules of the Texas Democratic Party, Gins said.
The Travis County Democratic Party held a council candidates school May 17 that was attended by some 60 people, including candidates and campaign staff, Gins said in a July 21 e-mail.
“We had an amazing lineup covering a number of topics. Our speakers included Gen Van Cleve, campaign manager for the Diana Maldonado Campaign, who gave the basics of organizing your campaign plan,” Gins said.
He said the other presenters included:
• Heidi Gerbracht, policy director for City Council Member Bill Spelman, who gave an understanding of how City Hall works.
• Ed Espinoza, executive director of Progress Texas, who talked about formulating basic messaging.
• Sheila Healy, coordinated campaign director for the Texas Democratic Party, explained how the Voter Activation Network works.
• Emily Williams presented Fundraising 101.
• Becky Moeller gave a presentation on navigating the world of endorsing groups.
• Ross Peavey outlined basic compliance rules and deadlines.
“I also peppered lots of discussions with leading questions and gave some basic advice on how to go about formulating a field strategy,” said Gins, who was campaign manager for Lee Leffingwell’s mayoral campaigns in 2009 and 2012. Gins was also field director and deputy campaign manager for Democratic gubernatorial candidate Bill White in 2010, he said.
“Robert Thomas was not admitted to the training based on his run for state representative as a Republican against a sitting Democratic incumbent in 2012,” Gins said in a July 28 e-mail. Thomas garnered 35.54 percent of the votes in the District 48 race, losing to Donna Howard, who won with a margin of 59.20 percent. (Libertarian Nick Tanner got 4.98 percent.)
Gins said one woman was turned away from training because “she was not okay with being listed as a Democrat. Other than that, everyone who showed up was allowed to attend.”
He stressed that the training was open to all Democrats but the party is not endorsing mayoral or council candidates.
“It is in all our best interests to see well run campaigns from our Democrats running for council. I believe it is possible the races in certain districts can help drive turnout up, and in a District like 3, where turnout is traditionally low in governor year races, that it is great for the entire Democratic slate of candidates up the ballot,” Gins said.
“If runoffs emerge where it is clearly a Republican running against a Democrat the party might take action (because) allowing Republicans to take seats on the city council without a challenge only allows them to build their bench….”
Voter Activation Network
The Texas Democratic Party has provided 23 mayoral and council candidates with access to the party’s Voter Activation Network (VAN), a sophisticated database of registered voters and voting history.
“My guess is more candidates will rent access in coming months,” Gins said.
The list Gins provided indicates that mayoral candidates Stephen Ira “Steve” Adler and Michael William “Mike” Martinez have obtained VAN access, as have at least one candidate in every City Council district.
The one-time fee for VAN access is modest, and the amount depends upon the number of registered voters in the district, Gins said.
District 1 candidate Ora Elliott Houston paid $300 for VAN access, according to her Contribution and Expenditure Report filed July 15, 2014, while mayoral candidate Martinez reported spending $1,100.
Marco Mancillas
District 4 candidate Marco Mancillas, who is running in a field of nine other candidates, is among those using VAN.
Mancillas is enthusiastic about this tool and utilizes it for such tasks as “cutting turf,” a phrase used to describe the process of providing electronic maps to each volunteer who is walking neighborhoods and knocking on doors for the candidate.
The maps can be read on a volunteer’s smart phone.
Once the volunteer’s work is completed, the block walker can update the VAN database to indicate which voters are supporting Mancillas, which are undecided, and which are supporting another candidate.
“It’s a new way of doing things,” Mancillas said. “The great thing about VAN is you can talk to voters you want to. It depends on the target you want to hit. You can select all Democrats who voted in local primary and general elections and it brings you a list.”
Jim Wick
Actually the VAN is not new but it is being used this year for the first time in the City of Austin elections, Jim Wick said in a July 30 interview.
Wick is managing Steve Adler’s mayoral campaign this year and ran Bill Spelman’s 2012 reelection campaign. “It was not available to us then,” he said. “It is definitely a powerful tool.”
Although VAN is being used by the Adler mayoral campaign, it’s not perfect, Wick said. “Most of the municipal voting records are not in the VAN. “Those records would be incredibly important, but it does have all the primary and general election” data.
Wick is supplementing VAN data with records that he gets from the voter registrar and manipulates to suit the campaign’s needs.
“The other problem is the VAN is not coded for city voters at all, or council districts,” Wick said. Instead, the data is arranged by whole intact precincts but without coding of voters to denote the district or municipality.” Another problem is that some voter precincts are actually split between council districts, or have part of the precinct inside the city and part outside.
Gins said, “That level of municipal data has never been a priority for the party.”
Matt Stillwell
While the VAN appears to be favored by the less experienced candidates it is not being used by some experienced candidates like Matthew Duane “Matt” Stillwell, a District 6 candidate (Correction: an earlier version of this story erroneously stated that Stillwell was a District 5 candidate) who in 2012 ran for state representative as a Democrat in District 136. He got 40.71 percent of the vote but lost to Republican Anthony Dale, who got 53.05 percent.
“I personally don’t like VAN,” Stillwell said in a July 23 interview. “I’m using a different tool: NationBuilder.”
Gins said, “It is interesting to note that NationBuilder is available to anyone of any party, whereas VAN is a Democratic tool. Some Democrats don’t trust putting data in NationBuilder for various reasons but mostly because Republicans can use it and there are concerns about how secure the data is. …
“In a city race in Austin I don’t think those concerns really matter.”
Majority of city candidates Democrats
In Texas voters do not register with a political party. The only public record of a person’s party affiliation is in which party’s primary elections they have voted.
The field of actual candidates won’t be set until the close of business Monday, August 18, the last day to file for a place on the ballot. But as of this writing seven candidates have appointed campaign treasurers indicating they will run for mayor, while 66 have appointed treasurers to run for council seats (the latest being Mackenzie Kelly in District 6, who appointed a treasurer Monday, and Jose Antonio Vallera in District 3, who did so Tuesday).
Three council candidates appointed treasurers but have indicated they are no longer a candidate and they are not included in the 66: Miguel M. Ancira in District 3 and Chelsea Elizabeth Brass and Gabriel “Gabe” Rojas in District 4.
• 48 candidates have voted exclusively in Democratic primaries.
• 7 candidates have voted only in Republican primaries.
• 16 candidates have voted in both parties primaries. Of these, 10 have voted more often in GOP primaries, 5 have voted more often in Democratic primaries, and one voted the same number of times in each.
• 2 candidates are registered to vote but have not cast ballots in any election: Frank R. “Franko” Guajardo in District 3 and Xavier Hernandez in District 4.
Republican-leaning candidates actually make up the majority of the field in Council District 6 and constitute fully half the candidates running in Districts 5 and 10.
District 3 candidate Sabino Pio Renteria and District 5 candidate Ann Kitchen have each voted in 22 Democratic Primary elections since 1990, which is as far back as the Travis County Voter Registrar’s electronic records go. That’s the highest number of Democratic Primary votes cast by the candidates in this election.
District 5 candidate Luis Miguel “Mike” Rodriguez tops the Republican candidates, having cast ballots in 15 GOP primaries since 1996.
The mayoral candidate profited from not having to comply with the SOS Ordinance
Investigative Report by Ken Martin
Part 6 in a series
Steve Adler
Environmentalists sharply criticized mayoral candidate Stephen Ira “Steve” Adler for representing land owners who avoided compliance with current environmental ordinances, as The Austin Bulldog reported in Part 4 and Part 5 of this series.
A review of several hundred pages of public records obtained through research and public information requests indicate that Adler himself personally profited from not having to comply with the Save Our Springs Ordinance for development of a tract in Oak Hill.
The steeply sloped 16-acre tract that Adler and law partner Michael Barron bought in January 1995 carried with it a Restrictive Covenant executed in December 1987—more than 10 years before any development plans were filed. The Restrictive Covenant granted rights to 65 percent impervious cover on the tract. If subject to the Save Our Springs Ordinance, enacted more than two years before Barron and Adler purchased the tract, impervious cover would have been limited to 25 percent.
The site plan for development of the property was filed by Barron and Adler in May 1998, more than three years after they bought the land.
A post-bust bargain?
The raw land that Barron and Adler bought in January 1995 for an undisclosed price was one of hundreds, if not thousands, of tracts in Central Texas that were swallowed up in the great real estate bust of the 1980s. Homebuilders folded. Developers failed. Bankruptcies were common. Banks and savings and loan institutions crumbled. The federal government established new agencies to grapple with the mess that devastated the economy. Taxpayers were out billions of dollars to restore sanity to the market.
The 16-acre tract, which came to be known as Wesco Acres Lot 1, had been flipped numerous times before it wound up in default on a lien of $1,818,909 when owned by Saddleback Properties NV a Netherland Antilles corporation, and was sold at auction at the Travis County Courthouse in January 1988 for an undisclosed amount.
Brad Rockwell
Brad Rockwell, an attorney with Frederick Perales Allmon & Rockwell, said, “Among the many things Adler apparently is, he is a real estate speculator who scooped up a foreclosed property in the Barton Springs watershed and took advantage of a bad deal the City cut with an owner several owners ago to develop at more than two times the impervious cover allowed by the SOS Ordinance. Adler sold (portions of) the property for development at an intensity that would not be allowed under the SOS Ordinance.
“As a result, Adler’s real estate transaction almost certainly contributed to the pollution of Barton Springs. Adler showed great cleverness in working the system to his own enrichment. I would hope that Austin can do better than to have a mayor who chose to make a profit off of the pollution of Barton Springs.”
Adler declines to reveal price
Adler explained how he came to be involved in the purchase. He told The Austin Bulldog that Bud Johnson of Dripping Springs pitched the property to Barron.
“(Johnson) was an old-time real estate guy,” Adler stated in a June 25 e-mail. “He brought the deal to my law partner who recommended we invest because he thought it was a good investment and I participated with him, subject to the interest of Bud Johnson.
“I really did not know very much about the property and did not purchase the property with intent to develop it,” Adler stated in the June 25 e-mail.
Adler said that Bud Johnson held an “equitable ownership” in the land that entitled him to “get half of any future income from the property.” Johnson died “about January 2007,” Adler said, and Johnson’s successor is now entitled to that income.
“Record title is in my name and Mike’s,” Adler stated in a June 24 e-mail. “But we hold it in trust or subject to this agreement and that has been how the property has been handled.”
Jim Wick
Asked in an e-mail how much Barron and Adler paid for the 16-acre Wesco Acres tract in 1995, Adler, through his campaign manager, Jim Wick, replied, “As you know, there are many things that can impact the price of property and the market works in cycles. Steve has only a 25 percent participation in the property you inquire about and to protect the privacy of the others involved, who have not chosen to run for public office, will not disclose the prices paid for the property … almost 20 years ago.”
Given that that the man who had had 50 percent equitable ownership in proceeds from the property—Bud Johnson—is deceased, according to Adler, that leaves only Adler himself and law partner Barron whose privacy is being protected.
Wesco Acres sales and development
Westlake Equipment Service Inc. sold the 16-acre tract to Harold Scherz, trustee, July 6, 1978. A plat for the property (a map drawn to scale) was filed July 28, 1981.
The property was taken into the City of Austin as part of a massive full-purpose annexation in the Oak Hill area that was completed December 19, 1985.
A Restrictive Covenant executed December 16, 1987, by Saddleback Joint Venture in connection with Zoning Case No. C14-85-288.118, and filed of record November 30, 1988, permitted 65 percent impervious cover on the tract in compliance with regulations pertaining to the Williamson Creek Watershed.
The tract is located within the City of Austin’s Drinking Water Protection Zone, and would be limited to 25 percent impervious cover if subject to the SOS Ordinance that voters approved August 8, 1992—more than two years before Barron and Adler bought it.
Barron and Adler sold portions of the 16-acre tract to the City of Austin, to Travis County, and to the privately owned Melwood Alliance LLC. Through Wesco Holdings LLC, they retain ownership of one lot.
City of Austin purchase—The City of Austin paid Barron and Adler $475,000 for 5 acres and a driveway easement of 0.337 acres January 6, 1997, according to the City of Austin Purchase Contract signed December 20, 1996. The City subsequently built a fire station on that tract. (The Austin Bulldog filed a public information request for a copy of the closing statement for the sale, which would provide a more accurate accounting of the cost, but the City’s response indicated the closing statement could not be found.)
Site plan application—Barron and Adler submitted a site plan to the City of Austin May 11, 1998, for development of the remaining 11 acres. Site Plan SP-98-0197C allowed 95,832 square feet of administrative/business office development, along with associated surface parking, drives, water quality/detention pond, and related improvements.
The site plan indicates the proposed impervious cover for the 11 acres was 54.05 percent. This is 11 percent less than the 65 percent allowed—but still more than twice the 25 percent impervious cover that would have been allowed by the SOS Ordinance, were it not for the Restrictive Covenant.
Travis County purchase—Travis County paid Adler and Barron $650,313 for 5.829 acres December 26, 2002, according to the closing statement, and the parties entered a joint development agreement. Travis County subsequently constructed a pair of two-story buildings on the tract, each 19,180 square feet, plus adjacent surface parking. These provide offices for the Precinct 3 Justice of the Peace and Constable, a tax office substation, a Community Care Health Center, and the West Rural Community Center.
Wesco Holdings formed—On August 25, 2006, Adler and Barron formed Wesco Holdings LLC. They are its sole directors. On October 18, 2006, the law partners issued a warranty deed to Wesco Holdings for the remaining 5.171 acres of Lot 1 of Wesco Acres, consisting of two lots of 2.5855 acres each.
Melwood Alliance purchase—Also on October 18, 2006, Wesco Holdings issued a warranty deed with vendor’s lien to Melwood Alliance LLC for 2.5855 acres. The sale price was not disclosed, but the deed indicates that Frost National Bank held a promissory note from the buyer for $172,000.
Adler, through campaign manager Wick, declined to reveal what Melwood Alliance actually paid for the land.
Melwood Alliance in 2008 constructed two single-story office buildings, each 4,500 square feet. The property is now valued at $1,300,239, according to the Travis Central Appraisal District.
Three-story building planned—Wesco Holdings still owns 2.5855 acres of unimproved land valued at $168,936, according to the Travis Central Appraisal District. The Site Plan, for which a six-year extension was granted March 25, 2014, indicates that a three-story building of 28,770 square feet is planned for that tract, along with surface parking, curbs, and a dumpster pad.
Travis County has the first right of refusal for the not-yet-constructed office building. The request for site plan extension stated that plans were to be finalized and submitted following approval.
Environmentalists critical
Bill Bunch
Bill Bunch, executive director of the Save Our Springs Alliance, slammed Adler for using the Restrictive Covenant to avoid compliance with the SOS Ordinance, saying, “He is trying to say building under the Restrictive Covenant is different from grandfathering. It is not.”
“Whether or not it’s a plat note or a condition of zoning, the basic assertion is the same: that the earlier and weaker standard is locked in and trumps the SOS Ordinance,” Bunch said. “The rule had always been before that new ordinances could be more protective than zoning conditions and whatever was more protective would apply.”
Doug Young
Austin attorney Doug Young of Scanlan Buckle & Young PC is critical of the fact that development rights for impervious cover were retained on the Wesco Acres tract by a man who may be elected Austin’s next mayor.
“In disputes, when the city is effecting its duty to attempt to enforce the will of the people reflected in current law—and to treat everyone equally, as is the case when only the current law is evenly applied—it would not be helpful for developers to be able to point at the city’s mayor and whine than the city is unfairly denying the developer special rights and favors like those already taken by the city’s mayor.”
“If the ‘rights’ were established in the 1987 restrictive covenant, this is a prototypical example of how bogus Chapter 245 is: The theory of Chapter 245 is that a developer should not have to change its project or incur unforeseen cost of compliance with future regulations once a development project is commenced. There was no development project here—the original developer was foreclosed, the forecloser was an S&L that itself failed; speculators bought and sold the property with no intention to develop; and everybody was buying and selling the property at fire-sale discounted prices, not based on investment-backed expectations of a particular ‘project.’ I call bullshit here.”
Steve Beers, president of the Save Barton Creek Association, said, “This case exemplifies what’s still wrong with watershed protection in the Barton Springs zone. The powers-that-be mostly refuse to apply the current law.
“The voter-approved SOS law has been on the books now for over 22 years. Everyone who wants to build out there wants an exemption—no matter what the circumstances. And each would-be developer or builder always has abundant precedent from other prior cases that won exemptions—for whatever reason.
“Nearly every property owner out there wins their special relief, except for the owners of the region’s water supply—that is us, the public,” Beers said.
“If this land is indeed grandfathered, then how come the owners were just asking the City to lock in a site plan for a further 10 years? Was that merely a formality?”
Adler previously told The Austin Bulldog that the Restrictive Covenant granted 65 percent impervious cover on the tract and that limit would apply regardless of whether the site-plan extension had been approved.
Beers said, “Maybe it’s too much to expect self-interested private-sector persons not to take advantage of every available loophole, but it’s especially vexing that the City and County governments both developed parts of this tract—yet they themselves did not build out to the current best standards.
“How can these governments set an example to private sector builders that they regulate, if they won’t follow the law themselves?
“The City and County also could have bargained for additional protections on the remaining property that the Adler partnership retains, as a condition of doing business with them. Didn’t happen,” Beers said.
“Since none of that is possible anymore, my main hope is that Mr. Adler might now take a stand that he can voluntarily follow the City’s most protective current standard—that is, the Save Our Springs Ordinance.”
These records show the history of tranactions for this 16-acre tract in the years before Michael Barron and his law partner Steve Adler bought the property in 1995 for an undisclosed price.The property was taken into the City of Austin as part of a massive full-purpose annexation in the Oak Hill area that was completed December 19, 1985. These records show the property at its peak value in 1984 carried a lien of $1,818,909, or $113,681 per acre. After default the property was auctioned to the highest bidder in January 1988 for an undisclosed price.
Significant milestones in the history of developing this property are as follows:
• A Restrictive Covenant filed of record November 30, 1988, specified that development of 16 acres of land could proceed under regulations for the Williamson Creek Watershed and the maximum impervious cover allowed would be 65 percent. (See pp. 1-6.)
• Adler and law partner Michael Barron bought 16 acres of Lot 1, Wesco Acres, from Findlay Properties Inc. in a transaction recorded Jan. 31, 1995, for an undisclosed price. (pp. 7-12.)
• City of Austin bought 5.0 acres and a driveway easement of 0.337 acres for $475,000 Jan. 6, 1997 (p. 13-26).
• Barron and Adler filed Declaration of Condominiums Jan. 6, 1997 (pp. 27-49).
• Barron and Adler filed Site Plan for Wesco Acres, 11 acres, May 11, 1998 (pp. 50-78)
• Barron and Adler sold 5.829 acres to and entered a joint development agreement with Travis County Dec. 26, 2002, for $650,313 (pp. 79-175).
• Barron & Adler form Wesco Holdings LLC and are its sole directors Aug. 25, 2006 (pp. 176-185).
• Barron & Adler issues warranty bill of sale to Wesco Holdings Oct. 18, 2006 (pp. 186-188).
• Barron & Adler issues warranty deed to Wesco Holdings LLC Oct. 18, 2006 (pp. 189-193).
• Wesco Holdings issues warranty deed with vendor’s lien to Melwood Alliance LLC for 2.5855 acres Oct. 18, 2006 (pp. 194-199).
• Travis Central Appraisal District values Melwood Alliance’s 2.5855 acres at $1,300,230 for 2013 taxes (pp. 200-201).
• Filed Texas Franchise Tax Public Information Reports for Wesco Holdings LLC for 2007, 2009-2001, 2013 (pp. 203-206)
• Travis Central Appraisal District values Wesco Holdings’ remaining 2.5855 acres at $169.936 for 2013 taxes (pp. 207-208).
• Wesco Holdings applied for a fourth site-plan extension of 10 years, supported by Travis County to meet its future needs, Aug. 1, 2013 (pp. 209-231).
• City of Austin Planning Commission approves 6-year extension of the site plan on March 25, 2014.
Land Development Code Advisory Group Member Neslund accused of failing to register as lobbyist
Updated Friday July 25, 2014 9:55am to link recording of statements made at press conference Updated Friday, August 15, 2014 8:15pm
Update: The Ethics Review Commission met the evening of Tuesday, August 12, 2014. After spending more than an hour and a half in executive session, the Commission heard testimony from the complainant’s attorney; Fred Lewis, from respondent Melissa Neslund; and from her attorney, Casey Dobson of Scott Douglass & McConnico LLP. After hearing testimony the Commission members asked questions, debated matters, and on the motion of Commissioner James Ruiz, seconded by Commissioner Dennis Speight, voted 4-2 to dismiss the complaint. Voting in favor of the motion were Commissioners Ruiz, Speight, Austin Kaplan, and Peter Einhorn. Voting no were Commissioners Donna Beth McCormick and Velva Price.
The complaint names Melissa Neslund, a senior associate and project director for land use and entitlements with Bury Inc., a consulting firm founded by professional engineer Paul J. Bury III in 1984, according to the firm’s website.
The Austin City Council approved the establishment of the Advisory Group December 6, 2012, “to assist in the development of a new Land Development Code per the Imagine Austin Comprehensive Plan.” The minutes for City Council Agenda Item 74 of December 6, 2012 state the resolution specifically prohibited members “who are registered or required to register as a lobbyist under City Code Chapter 4-8 or who are employed by a person registered or required to register under that chapter.”
The Austin City Clerk’s website lists the names of 65 lobbyists registered with the city. That list does not contain Neslund’s name or the name of anyone else The Austin Bulldog could identify as working for Bury Inc.
In a e-mail responding to The Austin Bulldog’s request for comment, Neslund provided a written statement, as follows:
Melissa Neslund
“I am not a lobbyist (registered or unregistered), and I do not undertake in lobbying activities. My role at Bury is to support real estate industry clients through the City’s land development process. At no time during that process do I lobby or solicit support for my projects from any City official. If I (or my firm) are working on a project that requires lobbying, we refer our clients to a land use attorney.
“Additionally, related to the make-up of the (Citizens Advisory Group) membership, the Resolution adopted by Council (20121206-074) states, ‘Members should be selected based on expertise in the fields of urban planning (my background), architecture, household affordability, neighborhoods, construction, project review and permitting (also my background), environmental protection and sustainability or other fields.’ I was appointed to this committee because of my land use and permitting expertise, and I do not intend to resign or step down from the (Citizens Advisory Group) due to this unfounded claim.”
Fred Lewis
Austin attorney Fred Lewis provided free legal assistance to Ingle in drafting and filing the complaint against Neslund.
Provided a copy of Neslund’s statement, Lewis said, “I think Ms. Neslund’s arguments are sophistry. She describes herself in the Melissa Neslund Profile on LinkedIn.com as essentially a lobbyist, an admission against interest: “Representing developers through the zoning and entitlement processes throughout Central Texas; tracking and responding to code and ordinance amendments being processed through the jurisdictions within the region….”
“This is lobbying, both in common meaning and legally. She fulfills the City’s lobbying definition because she is representing clients to directly or indirectly influence an official (which includes city staff) on a municipal question, which is defined broadly as any recommendation, regulation, or policy,” Lewis said.
“A lobbyist should not serve on a city committee because they represent two masters: the public interest as an appointed public member and her lobby clients’ financial interests. That is a classic conflict of interest between public duties and private interests,” Lewis said.
What the law says
City Code Chapter 4-8-11 states, “A person who lobbies in violation of a provision of this chapter, or who shall knowingly obstruct or prevent compliance with this chapter, or who shall fail to meet the reporting provisions of this chapter shall be guilty of a Class C misdemeanor.”
The City Code requiring lobbyists to register has a provision in it that may be key in whether Neslund will be found to have violated the code by not registering.
Chapter 4-8-2(6) Defines Lobby or Lobbying to mean: “the solicitation of a City official, by private interview, postal or telephonic communications, or any other means other than public expression at a meeting of City officials open to the public under Chapter 551 (Open Meetings Act) of the Texas Government Code, directly or indirectly by a person in an effort to influence or persuade the City official to favor or oppose, recommend or not recommend, vote for or against, or to take action or refrain from taking action on a municipal question. The term lobby or lobbying shall not include a mere request for information or an inquiry about a municipal question, matters, or a procedure or communication to a City official which is incidental to other employment not for purpose of lobbying.” (Italics added for emphasis.)
Along with a copy of the sworn complaint attorney Lewis provided copies of the agendas for five meetings of the Austin City Council, one meeting of the Zoning and Platting Commission, and one meeting of the Board of Adjustment. Each agenda shows that Melissa Neslund was listed as the representative for a property owner.
So the crux of the matter appears to be whether Neslund, in fact, lobbied with any city official that did not involve whatever she may have said during the course of these posted public meetings.
Lewis said, “When she is down there with city staff trying to get them to recommend or approve some parcel for zoning, platting or whatever, she is lobbying. She is directly or indirectly trying to influence city officials. It’s lobbying if you are paid or compensated for it. It is lobbying under the law in my opinion and we need to have an investigation and hearing.”
In addition, Lewis said that aside from this particular complaint, the City Code needs to be tightened.
“We need to change the law so people can’t make these kinds of arguments, however weak. We ought to clarify the law so those who want to misunderstand can no longer misunderstand.”
What’s driving this complaint?
Ingle and Lewis were accompanied by more than a dozen neighborhood representatives at the press conference this afternoon to announce the complaint. Most of them expressed strong beliefs that the Land Development Code Advisory Group is stacked with members who represent people with a strong profit motive and hardly any representation to protect the interests of neighborhoods in preserving the quality of life they’re fighting to maintain.
The Press Release Issued by Mary Ingle July 24, 2014, which Ingle read to the assembled group, states, “By filing the complaint, I am trying to signal what is symptomatically wrong with our city’s land planning and development process. … The composition of this group is almost exclusively from members of the real estate industry to the virtual exclusion of neighborhood advocates. Only one of the 11 members of the group can be characterized as speaking for neighborhood interests. Too many of the others either have financial ties to (the) real estate industry or motives to please the City staff.”
“Older core neighborhoods are being radically transformed by profit-driven developers given almost a free hand by City staff to demolish existing affordable homes and replace them with less affordable structures not compatible with neighborhoods,” Ingle said.
Although Ingle’s sworn complaint named only Neslund, Ingle said, “an investigation of business relationships of other members of the (Advisory Group) should commence.”
Many of those attending said they had been attending public meetings of the Advisory Group and were dismayed by the direction it’s taking and its perceived lack of attention to neighborhood concerns.
Gilberto Rivera, who chairs the City of Austin’s Community Development Commission, noted that unlike the members of many designated city boards and commissions, members of the Land Development Code Advisory Group were exempted from having to file Statements of Financial Interest, as required by City Code Chapter 2-7-72(C).
Daniel Llanes
Daniel Llanes, a Sector 6 representative on the Austin Neighborhoods Council, said the Advisory Group “needs to include all stakeholders—not just the ones profiting from development.”
Llanes also criticized the way the Advisory Group was formed. Seven of its 11 members were appointed by the City Council and four were appointed by City Manager Marc Ott, he said, adding that the city manager is an employee and “should not be participating in making appointments to a policymaking board.”
Susana Almanza
Susana Almanza of PODER, a candidate running for City Council in District 3, said the Land Development Code rewrite is being “fast tracked so it will be in place before the next council, which will have neighborhood representation.” The new council will take office in January.
Steve Speir, a board member of the Better Austin Today Political Action Committee, said in his view the Advisory Group is headed in the direction of trying to abolish neighborhood plans.
Joan Bartz, who was involved in founding the Austin Neighborhoods Council in 1973 and is still active, said, “Imagine Austin provided the key to open Pandora’s Box of the Land Development Code rewrite.”
David King, second vice president of Austin Neighborhoods Council, said, “Affordability is at stake. The Advisory Group must be free of conflicts of interest.”
King said that the population of Austin can be doubled under the city’s existing zoning. “It’s all about the money—not about preserving neighborhoods.”
Pep rally revs crowd to achieve the dream of turning Texas blue
Updated Wednesday July 23, 2014 1:24pm to link recording of speeches
Kirk Watson with Randall Slagle and Lloyd Doggett
Well you can’t blame the Democrats for wanting what they haven’t won in the last two decades, and that’s the election of the governor who will succeed Rick Perry.
The year 1994 marked the end of an era for Democrats. Governor Ann Richards lost her reelection bid to George W. Bush, but, in a last hurrah, Democrats Bob Bullock, Dan Morales, John Sharp, Martha Whitehead, and Garry Mauro all won another term. Ever since then every statewide race on the ballot has been won by Republicans.
Yet hope springs eternal in eternally deep-blue Travis County, the scene for a Saturday evening Democratic Party rally featuring the tried-and-true combination of barbecue, beer, and stump speeches, all emceed by State Senator Kirk Watson of Austin. A crowd estimated at more than 400 sprawled out over the grounds of the new party headquarters on East Martin Luther King Jr. Blvd.
In introducing U.S. Representative Lloyd Doggett (D-Austin), Watson said, “Here we are in the heart of Travis County, the heart of the city of Austin, but we ain’t in his congressional district, because we’re sitting in the congressional district of somebody from Fort Worth.” (This is the result of the last legislative redistricting that left Central Austin in the congressional district of Representative Roger Williams, a Republican whose district stretches from almost to Cowtown all the way to Wimberley and includes the State Capitol.)
“This is really a place of hope, right here,” Doggett said. “And every time we walk another block, we call another person who might not otherwise have voted, you write a check, you put up a sign, you expand that hope for Texas. But it’s not just hope for Texas. It’s hope for our entire country.”
Lloyd Doggett
“I believe if we work together and pull together, we have the potential by getting just a few women (who) are listening to what Greg Abbott is saying and doing. If just a few people concerned about whether a chemical plant next to their house is going to explode, with Greg Abbott not revealing any of the facts. If they’re listening to Dan Patrick, who has been kind of a Rush Limbaugh wannabe, going him one step further. We pull in some of those folks who haven’t participated with us before, and maybe if we turn out the people that share our values, just maybe with pulling very difficult, we can get just across the finish line. We can’t afford a landslide, but we can afford turning Texas into a win column.”
Watson said, “It’s been a while since there’s been this level of enthusiasm and electricity about our candidate for governor.” He called it a “tremendous honor” to have served in the Texas Senate with Wendy Davis (D-Fort Worth), the party’s gubernatorial candidate.
Democratic Caucus picked Davis to filibuster
Watson provided some insight into how it came to be Davis who delivered the filibuster that energized Democrats and propelled her into the national spotlight and the party’s gubernatorial nominee. Watson, as chair of the Democratic Caucus, said a number of Democrats were eager to filibuster on behalf of women’s rights to healthcare but the party wanted to “put a face on it.”
“We wanted to have a woman stand up on that floor and be the person that represented the women of the state of Texas and the men of the state of Texas in that fight. And the good news is that the person we had there to do that for us was smart, was articulate, was ready to take the fight no matter what it meant, and was someone who had the deep passion to represent all of us. Wendy Davis was that person, and Wendy Davis will be that kind of governor for all of us.”
Amber Davis, daughter of Wendy Davis, said, “When it comes to Texas politics, there’s a secret that all smart Democrats and Republicans know: Texas is not a blue state or a red state—it’s a non-voting state.”
She said that for this election Democrats are taking party organization to places that had been written off in past elections, like Ochiltree County, on the far north tip of the Texas panhandle, where 90 percent of voters had cast ballots for Rick Perry in 2010 and Democratic gubernatorial candidate Bill White got just 189 votes in a population of 10,000. For the 2014 election, she said that Democrats already have six full-time volunteers in Ochiltree County, with the goal of creating a ripple that will add to a wave of change in state politics.
A comptroller candidate who can count
Mike Collier
State Comptroller candidate Mike Collier noted that he is a certified public accountant and made light of his odd attire—a suit and tie—for this highly informal gathering, which he wore because his staff told him to “wear something comfortable.”
Collier said the state needs to invest in schools, roads, and water, not become addicted to debt and must not raise taxes.
“You need an accountant,” he said, “someone who can count to 20 without taking his boots off.”
Junior member of Texas House
State Representative Celia Israel is the newest member of the Texas Legislature by virtue of winning a special election for District 50 in January 2014 to fill the seat vacated by the resignation of Mark Strama.
Israel said she will run the same door-to-door campaign to win reelection in November to a full term as she ran to win the special election.
“If each one of our urban counties turns up the gas a little bit, we turn Texas blue,” she said. “It’s just that simple.”
Israel capped her speech by presenting a check for $5,000 to Travis County Democratic Party Chair Jan Soifer.
Democrats represent ‘mainstream values’
State Representative Donna Howard (D-Austin) said, “The Democratic Party is the face of Texas. We represent the mainstream values of Texas. We’re the ones that are standing up for families. We’re the ones that are standing up for equal opportunity and equal justice for all. We’re the ones that are standing up for responsible government.
“It’s not okay to say no to everything,” Howard said. “The people who are over at the capitol right now think all they have to do is say no, and that is not responsible. We need to let our neighbors know, when they go to church, when they go to the schools, when they go to the grocery store, wherever we go in our neighborhoods, we need to let people know that it is okay to vote for Democrats, because we represent mainstream Texas.”
Appellate judges decide important cases
Diane Henson
Diane Henson is a candidate for chief justice of the Third Court of Appeals, where she served a six-year term 2006-2012. She presented her case for the importance of this court’s work by noting that it hears appeals for 24 Texas counties, those cases involving state government regulatory agencies, including fracking cases, tax cases, and utility rate-making cases.
That’s why, Henson said, that special interests and big business are particularly concerned about taking control of this powerful court.
“The special interests are lining up against me, with my opponent,” she said, adding those interests already have five “severe conservatives” filling the seats on this court and the one moderate, Woodie Jones, is about to retire.
“We have to decide: Are we going to keep one moderate pragmatic jurist on this powerful court, or are they going to get them all? We have to fight for this seat,” she said.
Noting that this seat on the court has gone back and forth in recent elections by only 2 percentage points, she called on the crowd to work with her to win.
When people say to her are appellate judges important, Henson said, “Just say the words Hobby Lobby. Just say the words Citizens United. And just say the words, Bush v. Gore.”
Henson derided the Third Court of Appeals decision related to the Tom DeLay money laundering case. His colleague’s case went first and the district attorney’s indictment was challenged because checks were involved and checks were not funds under the money laundering statute.
“When you get checks, what do they do in your bank account? They become funds for me. So when my colleagues wrote an opinion that said checks were not funds, I wrote a dissent that then the Travis County District Attorney took the Court of Criminal Appeals and nine members of that court said, ‘Henson is right.’”
She said she was on the panel that ordered DNA testing in the Michael Morton case, leading to his exoneration.
Henson asked the crowd to urge their neighbors to go down the ballot and vote, because “judges matter.”
She closed by saying her campaign bumper stickers were available, and, “I want to see my name on your rear end.”
Only chance to unseat a Travis County Republican
Watson introduced Randall Slagle, candidate for Precinct 2 Justice of the Peace, by dinging the incumbent Republican (Glenn Bass) for not having a law degree and for having a long backlog of cases in that court.
“This is a court where everyday people deal with everyday problems,” Slagle said: Traffic tickets, small claims, landlord-tenant disputes.
Slagle, a Travis County prosecutor, fired the crowd by announcing, “This is the only race in Travis County this fall in which you can unseat a Republican, the only one.”
