Friday, October 23, 2015 by Jo Clifton

Who is being sued in city’s appraisal suit?

In its lawsuit challenging the Travis Central Appraisal District’s valuations of commercial property and vacant land, the city of Austin has sued the owners of numerous tax exempt properties, including the Salvation Army, the Congress Avenue Baptist Church, the Faith United Methodist Church on South Lamar, the Austin Independent School District, the University of Texas and the U.S. Postal Service.

The city has even sued itself as the owner of the police department parking garage on East Eighth Street.

However, the city has not sued Cox Texas Newspapers, the owner of the Austin American-Statesman building on South Congress, which has an assessed value of more than $48.5 million. Also, the city did not sue AMLI Residential Properties, owner of the downtown high-rise apartments valued at more than $67.4 million. Nor did it sue Samsung, which owns property assessed at $5.9 million, or a number of other commercial properties in the F1 property category.

The city has sued the South Austin Christian Church, which is not in the F1 commercial category.

All of this data comes courtesy of attorneys and a consultant working for Junk Yard Dogs, the owner of the building in which the property tax group Protax is located.

In its lawsuit against TCAD, the city said it was including all commercial, or F1, properties as well as all vacant land, categorized as C1. However, the city’s list has numerous errors, according to consultant Susan K. Bawcom, owner of Creative Data Consulting, who analyzed TCAD records for the Junk Yard Dogs.

According to Bawcom’s affidavit, all of the properties included in the lawsuit are within the city of Austin. Properties within TCAD’s jurisdiction but not within the city were excluded from the lawsuit, even though the lawsuit purports to include all F1 and C1 properties in Travis County. Bawcom also found that 3,097 properties included in the F1 commercial list in the lawsuit are not actually in that category, according to TCAD records.

She also cited errors within the vacant land, or C1, category. For example, her affidavit says that 54 properties cited in the lawsuit as being in the C1 vacant category are actually not vacant land and are not labeled C1, according to TCAD.

City spokesman David Green said, “The lawsuit concerns tax valuation and doesn’t specifically address tax exempt status. Additionally, we believe all appropriate properties were included in the list we obtained from TCAD. TCAD is ultimately responsible for the accuracy of that information.”

According to attorney Bill Aleshire, one of those representing the Junk Yard Dogs, there are a total of 19,103 defendants in the city’s lawsuit. Of those, 7,930 property owners were sued as the owners of vacant land and an additional 11,173 were sued as owners of commercial property.

Aleshire pointed out some other apparent errors, such as naming the Circuit of the Americas property in the lawsuit, even though it is neither in the commercial nor the vacant land category.

When Austin filed its lawsuit against TCAD and named owners of the two different types of properties, the assistant city attorney in charge of the case filed a letter with the Travis County District Clerk’s Office saying that the city was not requesting service on the more than 19,000 defendants. The lawsuit requested substitute service of process, in effect sending a letter, instead of requiring the city to pay for the expensive task of tracking down and personally handing a copy of the lawsuit to each of the defendants.

This week, District Judge Tim Sulak denied that request. That means the city may have to personally serve each of the defendants, but it is not clear how or when it might do that.

On July 18, TCAD sent a letter to owners of vacant land and commercial property notifying them that the city had filed the petition challenging appraisals on those categories of land. The letter said, “You’re receiving this notice because one or more of your properties is subject to appeal.”

Then on July 28, TCAD sent another letter to certain property owners referring back to the letter of July 18. The second letter said that the city of Austin’s notice of appeal applied only to land within the city and apologized for the error to people not living within the city.

In a win for the city, however, the judge removed six homeowner intervenors who were attempting to be a part of the lawsuit. The judge also denied a motion for summary judgment by the Junk Yard Dogs. That group has filed an additional motion asking the judge to require the city to specify exactly which property owners are subject to the lawsuit. It asked the judge to order the city to indicate whether it is suing all commercial and vacant property owners or only those within the city.

Aleshire said the hearing on that motion has been set for Nov. 6.

Photo by Valerie Everett made available through a Creative Commons license.

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Key Players & Topics In This Article

Bill Aleshire: A former Travis County judge, Aleshire has since been involved in a host of causes. These include the 2011 controversy over what Travis County Attorney David Escamilla eventually found to be Austin City Council violations of the Texas Open Meetings Act, as well as a law suit over City of Austin historic property tax exemptions.

Travis Central Appraisal District: The tax appraisal district for Travis County.

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