When you are in the business of telling taxpayers the market value of their property, lawsuits and protests are business as usual.
As those unhappy with recent appraisals line up to complain, McLennan County Appraisal District officials continue to deal with $1.6 billion worth of appraised values that are tied up in litigation dating back seven years.
Currently, there are 83 lawsuits pending against MCAD, with some of the county’s largest retailers and industries crying foul about their appraised values, including Sandy Creek Power Plant, Target, both movie multiplexes, Mars Wrigley Confectionery, H-E-B, Walmart, Chick-fil-A and a number of apartment complexes.
So far this year, 3,568 taxpayers have given notice they intend to protest their appraisals, said Joe Don Bobbitt, MCAD assistant chief appraiser. Typically, like many taxpayers who wait until the last minute to pay their taxes, those protesting appraisals often flood the office with 11th-hour filings and mailings.
Bobbitt said protests are down from this same time last year, but by the May 15 filing deadline in 2018, about 15,000 people had filed to protest their appraisals last year.
“It’s just a way of life down here,” Bobbitt said.
MCAD officials are required to have 95 percent of the tax roll completed before they can certify the roll and give the numbers to taxing entities for budget preparations.
According to MCAD figures, the average homeowner saw a median increase in appraised market value of 4.8 percent this year, down from about 12 percent last year.
But it’s the accumulative effect over the last few years that have taxpayers flocking to MCAD’s office and galvanizing on social media in constant debate of MCAD’s methods.
MCAD has a $300,000 budget for legal matters this year, down from $450,000 the year before when MCAD officials thought they would be battling Sandy Creek in court again. MCAD also has a reserve fund of $400,000 to $600,000 set aside for litigation, Bobbitt said.
In 2018, MCAD spent $220,000 for legal costs, he said.
Most of the lawsuits are filed by businesses. If they sue MCAD, they are required to pay taxes on the undisputed amount. If they want to pay the entire amount, they get a refund if they prevail. If they just pay the undisputed amount and lose, they have to pay the remainder of the taxes, possibly with interest, Bobbitt said.
The appeal process remains underway in 2019, so no new lawsuits have been filed this year. County records show that 58 lawsuits were filed against MCAD in 2018, with 13 disposed of; 40 filed in 2017, with 28 disposed of; 46 filed in 2016, with 38 disposed of; 22 filed in 2015 with 18 disposed of; and 23 filed in 2014 with 18 disposed of.
Among the high-profile plaintiffs, the Sandy Creek Power Plant in Riesel, continues to be a thorn in MCAD’s side. The coal-fired plant site, divided into eight properties for taxing purposes on 689 acres, sued MCAD in 2014, 2016 and 2018.
A 170th State District Court jury handed MCAD a major courtroom defeat in August 2016, its verdict slashing the appraised value of the plant by more than half after a five-day trial.
MCAD argued for a value of $900 million in 2014 and $1.17 billion in 2015. The jury, however, set the plant’s value at $408 million in 2014 and $431 million in 2015, close to what the plant was seeking.
On the same day the judgment was entered in the 2014 lawsuit, Sept. 7, 2016, MCAD filed its response to Sandy Creek’s lawsuit challenging its 2016 appraisal, according to court records.
The jury’s verdict saved Sandy Creek $12 million in taxes for each year, while the trial cost the appraisal district about $600,000 in legal expenses, MCAD officials said.
In January 2017, Sandy Creek and MCAD entered into an agreed judgment setting the overall value at $400 million, down from the previous $431 million.
While MCAD figures list the 2018 appraised value at $466.6 million, the Lower Colorado River Authority owns about 11 percent of the plant and is tax-exempt, Bobbitt said. The 2018 lawsuit dispute boils down to a $444 million appraised value placed on Sandy Creek by MCAD, while Sandy Creek is seeking a $250 million value, Bobbitt said.
Mars Wrigley Confectionery, the candy maker formerly known as M&M Mars, has sued MCAD the last three years, and all three suits remain pending, according to county records.
In 2016, MCAD set its appraised value at $72 million, but the Appraisal Review Board knocked that back to $65 million. The 2017 appraised value is listed at $68.1 million, while the 2018 appraised value was set at $71.8 million. In 2018, the Appraisal Review Board granted Mars no relief, leaving the appraisal the same.
American Multi-Cinema Inc., doing business as the Starplex Cinema, sued MCAD in 1999, 2017 and 2018. The 1999 case was settled in January 2000 but court records do not show the result of the settlement.
Starplex now has two lawsuits pending involving appraisals from 2016, 2017 and 2018. In 2018, the appraised value was $7.2 million and the ARB granted no relief.
Likewise, Hollywood Theaters Inc., doing business as Jewel Stadium 16, sued in 2008, 2013 and 2018. All the suits have been resolved with values hovering around $7 million from 2010 to 2018, with a 2019 appraised value at $7.59 million.
H-E-B has sued MCAD for appraisals on its multiple stores in 2009, 2014, 2015, 2016 and 2018. All were resolved except for the most recent case, records show.