Five local government agencies collecting property taxes must refund more than $638,000 in taxes already paid
The appraisal district spent $204,000 on its attorney fees before waving the white flag in the litigation and settling. The agreed judgments required costs and attorney fees to be borne by the parties.
The two lawsuits against Travis Central Appraisal District (TCAD) were filed by Catherine Tower LLC, owner of the 15-story apartment building totaling 269,603 square feet located at 210 Barton Springs Road (behind the Hyatt Regency Hotel).
One lawsuit challenged TCAD’s assessment for tax years 2016 and 2017 (Cause No. D-1-GN-16-002929). The other addressed the 2018 valuation (Cause No. D-1-GN-18-003586).
On April 4, 2019, the parties reached an oral agreement to settle all three suits, said Greg Christopher, CEO of Christopher Investments.
Yet just 11 days after reaching the oral agreement to set the 2018 appraised value at $122.5 million, the appraisal district issued a 2019 valuation of $144.2 million.
Christopher was outraged
“Imagine how shocked we were settling for $122.5 million for 2018 and getting an increase of $22 million for 2019,” he said. The 2019 Notice of Appraised Value for Catherine Tower was issued April 15, 2019, for $144,199,723. (Copy linked below.)
Christopher’s attorney, Lorri Michel of Michel Gray LLP, said the drastic increase in property values was not appropriate under the state’s Tax Code.
Michel points to Section 41.43(a-3) which established a barrier to jacking up a property value that had been lowered the previous year. The statute states “…the appraisal district has the burden of establishing the value of the property by clear and convincing evidence…if the appraised value of the property was lowered…the preceding tax year.”
To protest the 2019 valuation, Christopher said he obtained a fee-based appraisal conducted by Newmark Knight Frank Valuation & Advisory LLC. He provided a copy of the 192-page appraisal (linked below) which assigned a “value conclusion” of $124.1 million.
Michel said she presented that appraisal to a three-member Appraisal Review Board panel. One member wanted to accept a valuation of $124.1 million in the appraisal but was overruled by the two other members and the valuation was increased to $132.3 million.
Michel’s client was not pleased with that result.
And neither was TCAD Chief Appraiser Marya Crigler. On June 28, 2019, she signed a Notice of Appeal of Travis Appraisal Review Board Determination, in effect a notice of intent to sue over the $132.3 million value assigned by the ARB.
“If TCAD doesn’t work something out with us now, we will sue on the $132.3 valuation,” Michel said. “We think there was clear and convincing evidence the value should have been set at $124.1 million. That evidence is the appraisal that we got for the property by an appraiser who has done a fair amount of appraisals for TCAD over the years.”
“Christopher Investments is hoping to reach an agreement with TCAD on the values in an attempt to avoid another round of costly litigation,” she said.
Lawsuit results recap
In the 2016-2017 lawsuit the appraisal district was represented by attorney Tammy White-Chaffer, partner in Houston-based Olson & Olson LLP.
In the 2018 lawsuit the district’s counsel was Mary Sanchez of Austin-based Evertson & Sanchez PC.
Both suits resulted in agreed final judgments issued April 16, 2019.
The judgments lowered the valuations as follows:
2016 valuation—reduced by more than $20 million, from $134.4 million to $114 million.
2017 valuation—reduced by $3.9 million from $124.9 million to $121 million.
2018 valuation—reduced by $4.9 million from slightly less than $127 million to $122.5 million.
TCAD’s loss in these lawsuits over Catherine Tower come on top of the even bigger financial setback resulting from losing the lawsuit filed by Texas Disposal Systems Landfill Inc. As reported by The Austin Bulldog July 16, 2019, that litigation resulted in an estimated refund of $800 million, in addition to paying plaintiff’s attorney fees of $105,000 and its own attorney fees of nearly $88,000.
Catherine Tower LLC paid 2018 property taxes totaling $2,690,738, according to records of the Travis County Tax Assessor-Collector (copy linked below). AISD got the lion’s share of it, $1,460,200.
Links:
2019 Notice of Appraised Value for Catherine Tower LLC (3 pages)
Agreed Final Judgment Cause No. D-1-GN-16-002929, April 16, 2019 (5 pages)
Agreed Final Judgment Cause No. D-1-GN-18-003586, April 16, 2019 (5 pages)
Newmark Knight Frank Valuation & Advisory LLC appraisal, June 13, 2019 (192 pages)
Notice of Appeal of Travis Appraisal Review Board Determination, June 28, 2019 (1 page)
Property Tax Receipt for Catherine Tower LLC for 2018 (1 page)
The Catherine Property Tax Comps for property tax year 2019, April 15, 2019 (4 pages)
Related Bulldog coverage:
TCAD loses landfill lawsuit at cost of nearly $1 million, July 16, 2019
New offices for Travis Central Appraisal District, July 15, 2019
Deputy chief appraiser abruptly resigns, July 10, 2019
Appraisal Review Board heads off lawsuit, June 12, 2019
New procedures undermine appraisal process, June 6, 2019
Lawsuit Seeks Property Tax Hearings, December 17, 2018
Homestead Exemptions a Tax Loophole,” February 26, 2014
Homestead Exemptions Rife With Abuse, December 20, 2013
Chris Riley Nailed for Back Taxes, August 20, 2014
Appraisal District to End Records Suppression, November 22, 2011
Appraisal Records Hidden from Public View, November 18, 2011
Are Austin’s Property Taxes Fair and Equitable? July 30, 2010
Trust indicators:
Ken Martin has been covering local government and politics in the Austin area since 1981. See more on Ken on the About page.
Email [email protected].
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