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Travis commissioners decline to challenge commercial appraisals

Wednesday, July 22, 2009 by Jacob Cottingham

Travis County Commissioners have declined to pursue an official challenge to the way the county’s Central Appraisal District calculates the value of commercial properties, but said they plan to keep an eye on the situation.


Brian Rodgers of Change Austin and Travis Central Appraisal District Chief Appraiser Patrick Brown were both in front of Commissioners on Tuesday to discuss allegations of undervalued commercial property in the county. While there was little new information, the commissioners were considering whether to either press forward with an official challenge to the appraisal district or ask for an audit from the state.


Brown’s office has been under fire from Change Austin for what Rodgers said was systematic undervaluing of commercial property in Travis County. The county receives most of its revenue from property taxes levied against official appraisal values. Rodgers was before the court with a list of 30 properties whose sale values far outstripped their official appraisal values.


Early on, it was established that the deadline for filing an official challenge to TCAD’s tax rolls expired on June 15, and that new legislation required annual state check-ups on the appraisal district. The court cited these reasons in declining to press forward, but made commitments to work with the district in the future to ensure more accurate appraisals.


Brown offered a number of reasons why such appraisals seemed out of whack, and acknowledged that the TCAD has made some errors. He contended that the commercial real estate market was in a slump, and said that some of the valuations presented by Change Austin did not consider the improvements, which the county appraises separately.


“You can’t just solely look at the land or the improvements; you have to look at the overall value,” Brown said. Change Austin has listed The Austonian as appraised at $2,958,985 on their list of 30. However, they showed a sales price of $7.37 million in 2005. Brown said the numbers were off.


The land’s allocated value may be incorrect but we do have $26,286.882 on that, which obviously far exceeds the $7,370,000 sale price…” He said the entire value incorporated both the land value and the building’s value, and that it was 41 percent complete according to TCAD records. He also said the land is now appraised at $6,936,035, which is closing in on the sales price.


Change Austin, TCAD and Commissioners agreed that the lack of a state law requiring full disclosure of commercial property sales prices severely hampered the appraisal district’s ability to accurately value properties. Brown even complimented Rodgers’ methodology for obtaining land valuations. He used public records disclosing “comps” for nearby areas in which the City of Austin and Travis County had hired third-party appraisers to value property they were interested in.


Brown said his office is now going to “follow the same process as Brian Rodgers did and ask for all appraisals from our jurisdictions; we’re going to continue to add staff to our residential and commercial Land/Ag departments; we invite and will review the properties on the list that have been provided to us.” Asked if a staff shake up could result if the district is still having problems next year Brown said, “We’re going to do whatever it takes to get the roll as right as we can based on information that we have when notices go out.”


As for the current list of 30, which Rodgers said, “If they just take my 30 comps and raise those people’s property tax this year or next year, we’ve failed. This is the tip of the iceberg that’s widespread. It’s not like we’ve found the last 30 undervalued properties and now we’re finished.” For his part Brown said, “The best we can do for most of these properties is put it in our 2010 rolls. I respect the quality of our managers and they have constructive knowledge of these properties and there is going to be some major effort put in these areas where we have deficiencies.”


After a closed session on the matter, Judge Sam Biscoe told In Fact Daily there were additional problems. “My guess is for a good sampling you probably need 1,000 or 1,100 properties,” he said, indicating that the list of 30 may have been too small. The problem with a challenge, he said, is that “you have to have specific reasons. I’m not sure that with such a limited number of properties you get there. The other thing is that it does require a whole lot more work than we have time to put into it,” but said efforts would be redoubled next year.

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