KFOX14 - kfoxtv.com - Search Results

The following is an archived video story. The text content of that video story is available below for reference. The original video has been deleted and is no longer available.

Commercial properties struggle to keep up with property taxes

By: Genevieve Curtis
EL PASO, Texas - Many El Pasoans are convinced they're paying more in property taxes than their properties are worth.

One of those reasons is inconsistent property assessments. City leaders want the state of Texas to take a closer look at the way the Central Appraisal District assesses property values across El Paso.

KFOX14 spoke to business owners who are suing over the issue.

Bruce Meyer is a partner with Yandell Office Partnership and they own the commercial building at 900 East Yandell Drive.

The owners and tenants filed a lawsuit against the CAD after the supposed value of their property increased by 101 percent in just one year. Meyer said they hadnt made any big improvements or changes to the property.

The tenant at the building, Total Orthotic & Prosthetic Solutions, Inc., would have had to pay double in taxes because of the increase in property value.

In 20 years of owning the building, Meyer said the valuations from the CAD were fairly consistent. For four years, the building was estimated around $410,000. Then in 2012, the valuation went down to around $380,000.

Thats why last year, Meyer was shocked to see the CAD had valued the property at double that -- at more than $770,000.

That would have meant Meyers tenant would have had to pay more than $20,000 in 2013 property taxes, when in 2012 they paid close to $10,000.

Yandell Office Partnership and the family-run business appealed, and the value was lowered by only about 40 percent which meant it was still about 60 percent higher than the previous year.

We were expecting some sort of valuation increase, but not 101 percent and not 57 percent, said Bruce Meyer, of Yandell Office Partnership.

These types of cases and inconsistencies prompted city leaders to ask the state comptroller to audit the CAD.

Here are the problems we are hearing from local taxpayers,; help us work towards a solution. We obviously have a problem and we need your help, said City Rep. Cortney Niland, who sits on the CADs review board.

But the burden of huge spikes falls on business owners.

I have no idea how they came up with this dollar amount, said Miguel Guerra, who owns Total Orthotic & Prosthetic Solutions.

Guerra said its forced them to make tough choices.

What are we going to do to offset this? We have to make cutbacks in certain areas and try to make it work, said Guerra.

Guerra said he would hate to have to lay off employees because of the enormous tax bill. So far he hasnt had to make those kinds of cuts, but hes worried the increases and unexpected spikes could continue.

It could get to the point where we cannot afford the rent here, said Guerra.
That would leave Meyer without a tenant.

The tenant is running a business, and if they can find a better location at a better price, they'll move. So whats a vacant building going to be worth? said Meyer.

CAD Chief Appraiser Dinah Kilgore told City Council the department would welcome the review -- it has passed the state's reviews in the past.

She said it has about 200 pending lawsuits, which is about average for a city of this size, she said.

In an interview with CAD officials over the phone, they said they face a number of challenges when it comes to appraising values.

Property owners in Texas don't have to disclose sale prices or rent.

The taxing districts need money, I know that. I want good services from my city and my county, but I need some certainty. As much as I can get in business, said Meyer.

Meyer and Guerra had to pay the 2013 property taxes at the increased value in order to file a lawsuit against the CAD. If they win, they will have the difference returned to them, but it could take more than a year.

State law prevents more than a 10 percent increase in your home evaluation, but there is nothing to prevent commercial proprieties from seeing massive spikes.