TAYLOR — A coalition of nearly 50 local business operators and others who mounted protests about skyrocketing appraisals say their actions will keep downtown a thriving hub attracting new commerce.
As Samsung Austin Semiconductor spurs local growth, commercial-property appraisals that have, in some cases, risen almost 500% in two years threatened to strangle the burgeoning boom.
“Here we are in the shadow of Samsung and everything should be heading into an upward trend, but this would have killed downtown,” said Rick Northcutt, sales associate owner at RE/MAX Associate Group, 906 N. Main St.
In Taylor’s historic downtown district, property owners opened their 2023 appraisal letters to find jumps of up to 300%, according to several investors, after incurring increases of 150% and occasionally more the previous year.
“It was going to be extremely detrimental to our downtown property owners and their tenants. We were going to lose a lot of businesses,” said Julie Downs, owner and managing agent of Tierra Grande Real Estate, 421 N. Main.
“There’s no limitation on how much they (Williamson Central Appraisal District) can raise the appraised value on non-homestead property. It’s difficult for businesses to plan. We can’t get into contracts knowing our property values could go up this high,” she added.
Samsung, a South Korean-owned microchip plant, was announced in November 2021 as part of a $17 billion investment in Taylor and Central Texas, spurred in part by federal legislation to bring critical technology manufacturing back to the United States and away from China and Taiwan.
Over the next few years, Samsung plans to add up to 2,000 employees to its local payroll, not to mention temporary workers.
Many will come to downtown to shop and dine, which is why maintaining the city center is so important both for locals and out-of-towners, advocates said.
GETTING ORGANIZED
Downs’ company helps investors find businesses to lease their buildings, so clients started calling her when they saw their new appraisals. She and fellow property owner Doug Moss started contacting other owners and organizing a committee.
Downtown property owner Rick von Pfeil was also concerned about what the increase would mean to Taylor businesses.
“In bigger cities with bigger buildings, you have corporations that own them. In smaller towns like Taylor, you have smaller buildings and you have neighbors that own them,” said von Pfeil. “I personally know all of my tenants.”
“Any type of tax increase that comes to the downtown property owners is going to have to trickle down in some fashion to the businesses that are in those buildings and I don’t want that to hurt the businesses I have as tenants,” he added.
Northcutt — who is co-owner of the property that houses 74 Man Store, Friends of the Bride and Trouvaille Antiques, among other real estate — said county taxes on his downtown properties went from about $30,000 in 2022 to over $80,000 with the proposed 2023 appraisal.
“Our combined rent of all of our tenants didn’t add up to just what the taxes would be. We were going to have to raise everyone’s rents. None of my tenants would have been able to pay the increased taxes,” he said.
Like Downs, Northcutt and von Pfeil started talking to neighboring property owners with the idea of banding together to appeal the increases.
“Rick Northcutt and I had discussed the issue once the appraisals started coming out and we were just shocked at what was happening in the downtown historical area,” said property investor Keith Hagler.
“We started rallying people to talk about this. It’s kind of how Taylor has always worked, some person tells some other person, somebody tells somebody else. Pretty soon we got us a group together,” he added.
SPIRIT OF TAYLOR
Folks quickly joined forces and their first meeting included 40 downtown property owners, growing to 46 by the second meeting.
“I didn’t know what to expect when you got everybody in the room together because you’re going to have some people who just want to gripe and there never was any of that. We had one focus. Everybody just came together with one cause and figured out one issue we had and worked on that issue,” Hagler said.
Downs agreed. “The true spirit of Taylor came out there. Everyone acted in such a professional manner,” she said. “It could have been so ugly because tempers come out. There was a lot of frustration but everyone realized that bringing that frustration to the table wasn’t going to solve anything.”
One question on everybody’s mind was, “Why?”
“We tracked Hutto and Georgetown and they’ve had escalations but nowhere as hard as Taylor,” Downs said.
According to the investors, one property owner had already filed a protest with WCAD and received a response. The agency’s reply showed the property comparisons used to evaluate his property.
That information provided a critical insight into the issue.
WCAD uses sales prices of similar properties for comparison to determine a property’s market value. Texas law says sales prices can be kept private. So WCAD found itself with a shortage of comparison sales to evaluate downtown Taylor holdings, according to Chief Appraiser Alvin Lankford.
“Texas is a non-sales disclosure state, so we do not get all the information about sales that happen,” Lankford said. “The more information we have available, the more accurate our appraisals can be.”
WCAD appraisers ended up using information from three Taylor sales, and a fourth sale from a commercial property in downtown Georgetown.
The Taylor properties they used included a “unicorn,” according to investors — a building that sold for double its market value.
While the group did not want to speak on the record about a land deal they were not involved in, many cited a transaction made by a California buyer who paid over $3 million — an “extreme amount” for a downtown Taylor property.
WCAD records show only one parcel fitting that description, located at 219/221 N. Main, which went from a market value of $1.14 million in 2022 to a proposed 2023 value of $3.53 million after it was sold to a person in Pasadena, California. The appraised value has since been reduced to $1.71 million after the protest.
“Now we’re getting people from all parts of the world due to Samsung. And if they’ll come in and pay X amount for this piece of property, should that affect every piece of property that surrounds it? It doesn’t mean all the buildings around it are near that price,” Hagler said.
Armed with an idea of what had caused the alarming increase in appraisal values, the group decided to send an ambassador to speak with WCAD on their behalf. They chose von Pfeil to represent them.
“What WCAD came to me with was kind of like the old ‘help us help you,’” said von Pfeil. “They said they don’t have enough public records because people that have sold in Taylor are keeping the records private. They were willing to take out the $3 million sale in Taylor and the commercial property in Georgetown if we could bring a couple of recent sales to replace them.”
Von Pfeil and Downs met with others in the group to find investors willing to make their sales information public.
“We asked, ‘Would you mind, for the benefit of everyone, disclosing what the sales prices were so we can have something in writing we can take to the county and they can replace those astronomical numbers with new comps?’” von Pfeil said, “and everybody was willing to do that because not only did it help themselves but it helped the rest of the group.”
APPRAISALS REVISED
Armed with new numbers, WCAD did as promised and replaced both the $3 million sale and the Georgetown property with more representative numbers for evaluation. The agency then used those numbers on all protested downtown appraisals, Lankford said.
“The system worked like it should. They gave us additional sales and we were able to revalue the properties for the valuation protests,” he said. “If we could get sales disclosures we would get that right in the first place, but we get what we can and have to do the best we can with what we have.”
Von Pfeil believes all of the owners in the group filed protests.
“We made it clear at our first meeting that if you don’t file you’ve got no case, no argument, no meeting date. You’ve got nothing to work with. So everyone in our group knew to do that,” he said.
Von Pfeil, Northcutt and Downs all reported that they had heard from other members of the group that their ensuing visits to WCAD to settle their protests went very quickly, with the agents having already adjusted amounts based on the newly supplied sales information.
“My property value on Second Street was lowered from $709k to $373k. This was a huge success. I cannot express how impressed and appreciative I am to you all,” one property owner said in an email to von Pfeil.
“My appraised value went from $711,108 down to $364,972. I want to thank everyone that was instrumental in assisting all of the downtown property owners,” wrote another.
Both owners requested to remain anonymous.
The group of property owners never organized or made itself official. There were no appointed leaders, and no catchy name. But it did unify people with a common interest, many of whom had never met.
“It was great finally meeting some of these owners who I’d heard of but travel in different circles,” Hagler said. “And now, we have everyone’s email so it will be easier for us all to come together again if something else comes up.”
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