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August 14th, 2012:

Back to Blue

The Texas House Democratic Campaign Committee has announced its list of targeted districts for 2012. From their press release:

The list of nine includes five former House members — Abel Herrero (HD 34), Yvonne Gonzales Toureilles (HD 43), Carol Kent (HD 114), Robert Miklos (HD 107), and Joe Moody (HD 78); and four new candidates — Phil Cortez (HD 117), Ann Johnson (HD 134), Mary Ann Perez (HD 144), and Rosemary Robbins (HD 105).

The organization also announced that two of their major donors have pledged to match up to $75,000 in contributions to kick off the “Back to Blue” effort.

“The HDCC has a proven track record of helping Democratic House candidates win,” said state Representative and HDCC Board Member Jessica Farrar, “Our mission is to turn Texas House seats blue and with these candidates on our team in 2012, we will be successful.

“Thanks to our generous contributors, we have an incredible opportunity to double down and raise the money needed to win these seats,” continued Farrar.

In addition to organizational assistance, staff support, and message training, candidates targeted by the HDCC will receive financial support.

“My campaign has knocked on over 25,000 doors in Dallas County and from the conversations I’ve had with voters, I know that Democrats are on the right side of the issues. We continue to support our neighborhood schools, fight to protect women’s health and stand up to Republican lawmakers who chose not to play by the rules,” said Robert Miklos. “I know that with the HDCC’s support, the hard work of my campaign team, and the generous help of those who care about the future of our state, I will win on Election Day.”

“I am proud to have the support of the Texas HDCC and to be recognized as a ‘Back to Blue’ candidate. This shows our hard work in Houston is paying off,” said Ann Johnson. “Our voters and the people we’ve talked to don’t want politics as usual. They want someone they can count on and will be held accountable for the promises they make.”

See here for more; the HDCC is also on Facebook and Twitter. In addition to those nine, they have a five-member second tier, and three incumbents they’ve identified as in need of some protection – Reps. Craig Eiland, Joe Farias, and Hubert Vo. The five B-listers are Robert Stem (HD12), John Adams (HD45), Dora Olivo (HD85, another former member), Rich Hancock (HD102), and Matt Stilwell (HD136). I’m a numbers guy, so here are some numbers:

Top tier Dist Incumbent Obama Houston ================================== 034 Scott 52.58 58.83 043 Lozano 47.94 54.68 078 Margo 55.31 56.84 105 Harper-Brown 46.14 48.18 107 Sheets 46.71 48.46 114 Open 46.57 45.66 117 Garza 52.52 52.76 134 Davis 46.68 42.56 144 Open 47.95 54.53 Second tier Dist Incumbent Obama Houston ================================== 012 Open 39.38 46.67 045 Isaac 46.92 45.84 085 Open 40.68 45.22 102 Carter 46.64 46.75 136 Open 45.92 42.93 Incumbent protection Dist Incumbent Obama Houston ================================== 023 Eiland 47.77 54.22 118 Farias 55.10 57.61 149 Vo 55.52 56.35 Others of interest Dist Incumbent Obama Houston ================================== 017 Kleinschmidt 41.93 47.24 032 Hunter 42.57 46.20 041 Open* 57.05 59.68 047 Workman 44.75 41.27 052 Gonzales 46.18 45.01 054 Aycock 47.93 49.01 065 Open 43.04 42.36 074 Open* 57.91 61.32 113 Burkett 46.05 47.87 115 Open 43.86 43.24

Electoral data can be found here; look in the RED206 for the relevant information. The “others of interest” are my own selections. The two starred seats are open D seats; HD41 was Veronica Gonzales and HD74 was Pete Gallego.

Democrats are going to pick up three seats by default: HDs 35, 40, and 101. The former two were left open by Reps. Aliseda and Pena, the latter is a new district in Tarrant County. Strictly by the numbers, I’d classify HDs 34 and 78 are Democratic Favored; HD117 as Lean Democratic; HDs 43 and 144 as Tossup; HDs 105 and 107 as Lean Republican; and HDs 114 and 134 as Republican Favored. There are plenty of other factors to consider – candidate quality, fundraising, demographic change since 2008, etc – but let’s stick with just the numbers for now. Let’s be optimistic and say Dems can pick up seven of these nine top tier seats and not lose any they currently hold; honestly, only Eiland would seem to be in real danger. That’s a ten-seat net, which with Lozano’s switch gets them to 57. Better, but still a long way to go. The map for 2012 is unlikely to expand beyond the indicated second tier, as not all of the “other districts” I’ve identified have Dems running in them.

Certainly it’s possible for things to go better for the Dems, but worse is also in play. You could imagine a true disaster in which they get nothing but the three gimmes and lose Eiland along the way for a net +2 and only 49 seats, or one more than they had in 2011. I don’t think that’s likely, but it’s not out of the question. The long-awaited ruling from the DC Court will almost certainly trigger a new map from the San Antonio court, and for all we know the Lege may take another crack at drawing a map. The original San Antonio Court interim map made a 60-member Dem caucus likely, with friendlier Dallas districts, a Dem-favored HD54, and a tossup HD26 in Fort Bend among the differences. All I can say at this point is that I don’t believe we should get too accustomed to this interim map.

So that’s the state of play for this cycle. Go look at the candidates, pick a few favorites, and give to them or give to the HDCC. Change isn’t going to happen without your help.

Once again with sales price discolsure

Loren Steffy returns to a familiar topic.

By some estimates, Williams Tower could sell for as much as $475 million. When it comes to paying the taxes, though, the 64-story tower will be worth less than half that much.

That’s because the building’s current owner, the Hines Real Estate Investment Trust, waged a successful battle to lower the building’s appraised value year after year, as did the Kuwait investors who owned the building before Hines bought it in 2008.

Last year, for example, the building was appraised at $252 million, 7 percent below the $271.5 million for which it sold in 2008. As I wrote in February, market prices typically are far higher than the appraised value, which determines the amount of tax property owners must pay.

The appraised values, though, are lowered even more by the relentless efforts of building owners. Hines, for example, appealed the appraisal and got it reduced by another 22 percent last year, to $197 million, according to Harris County Appraisal District records.

[…]

Appraisal districts are required by state law to use the “fee simple” method in determining property values. That means the district must consider the physical building and its surrounding area, and then assign a value based on the average values and occupancy rates. It can’t consider many of the intangibles that give value to a prime property like Williams Tower.

In other words, HCAD’s appraisals don’t have much relationship to market prices but represent the district’s best estimate of taxable value.

“This is as good as it gets, and as good as it gets stinks,” said George Scott, a former HCAD researcher who left the district several months ago and now blogs about property tax issues.

Scott’s blog is here; I was not aware of it before reading Steffy’s column. Steffy wrote about this before back in February. That column was focused more on the sales price disclosure issue, while this one is primarily about the appraisal reduction business, but it’s all the same thing in the end, with the same result of lower tax collections for local entities. Patricia Kilday Hart wrote about this as well the week before during the height of the janitors’ strike.

While downtown building owners are shortchanging the janitors at payroll time, union reps argue, they also are shortchanging local governments by gaming the local appraisal system. Commercial building owners aren’t paying a fair wage to janitors, and they aren’t paying their fair share of government services. And that leaves the average Houstonian with a heftier tax bill.

“While janitors are fighting for enough money to keep the lights on and feed their children, the building owners are pulling money out of the services that help the average Houstonian,” said Durrell Douglas of the Texas Organizing Project, which is supporting the janitors’ union. “While some people are scraping pennies together to live, the building owners are not hurting, and they are not paying their fair share.”

Douglas bases his opinion on a study, conducted by advocates for the janitors, of appraisal protests by owners of 350 commercial properties in 2011. Big building owners were successful in knocking down their appraisals in 77 percent of their appeals, compared to only 55 percent of the appeals of single-family homeowners.

The study concluded that commercial property owners managed to knock more than $2.4 billion off of the appraised value of their buildings, which resulted in significant lost revenue for local governmental entities: $15.4 million for the city of Houston, $9.4 million for Harris County, $4.6 million for the Harris County Hospital District and $29.1 million for various school districts. (The study examined big skyscrapers not just in downtown but in Katy, Alief, Spring Branch, Cy-Fair and Clear Lake school districts.)

I don’t have any information about the study being cited, but when Steffy wrote his February column he referenced a “random sample of more than 40 office buildings that sold in the past five years”, and the revenue reductions for that sample are in line with the totals Hart cites. We’re talking real money, and I’ll give you three guesses where cities, counties, and school districts turn to make up for that lost revenue. (Hint: You and me.) I’ll turn it over to George Scott for the last word:

I am a conservative. Conservatism to me means that one has an inherent distrust of government and generally favors the free enterprise principles that less regulation is better than more regulation when it involves the production skills of the American economy.

However, I believe that I can hold that as a guiding principle and still not believe that everything corporations do, think, believe, or support is moral, ethical, rational, justified, or in the interests of the community or nation.

As far as the owners of these downtown buildings, I am personally dedicated to the notion that these folks should no longer be able to ‘game’ the property tax system. That they apparently want to do it at the same time they play hard ball with the janitors is particularly offensive.

There’s an old football sports analogy that comes to mind.

These folks have ‘over-kicked their coverage.’ It may take another year to get the instant replay showing that I am right, but I am right. Stay tuned.

I hope he’s right, because we’ve been talking about sales tax disclosure for several sessions now, and given the slash and burn priorities of the crowd that’s running things now, I don’t see how it will get any traction this time around. I’d love to be proven wrong about that.

Deal struck on the GMP

Well, this is interesting.

The Metro board on Aug. 3 approved a ballot proposal that would have shifted tens of millions of dollars more in mobility payments to Houston at the expense of the county and small cities by basing the payments on where sales taxes are collected.

Monday’s tentative deal – reached in a meeting among Houston Mayor Annise Parker, County Commissioner Steve Radack, Metro chairman Gilbert Garcia and Greater Houston Partnership chairman Tony Chase – scrapped that approach, participants said.

The county and cities’ current mobility contracts expire in 2014. Under the new proposal, any increases in sales tax revenues above 2014 levels would be split half-and-half between Metro and its member governments, sources said.

That formula would continue until Metro had collected about $400 million under the arrangement, County Judge Ed Emmett said. Sources differed on whether that was projected to occur in 2024 or 2026.

Radack and Emmett stressed that the proposed deal would require Metro to spend its share of the tax revenue increase on buses, bus shelters and paying down debt, not on light rail lines.

“I’m optimistic that this will be a far better deal for the county and, at the same time, what’s being discussed will be a mechanism for Metro to be able to increase the amount of buses,” Radack said.

At this point, I don’t have enough information to have an opinion about this. I’m glad everyone has joined hands and is singing “Kumbaya”, but beyond that I need more details. It looks like a variation on the original mobility payment freeze that Chairman Garcia floated, and it does have the virtue of providing more money to Metro. Let me hear more and I’ll let you know more.

Ashby set to rise

Ready or not, here it comes.

Look out below!

Construction on the 21-story luxury apartment building at 1717 Bissonnet is scheduled to begin by the fourth quarter of this year and is expected to take 18 to 24 months to complete.

Kevin Kirton of Buckhead Investment Partners, which is developing the project, said he plans to go to the city for permitting in the “very near future.”

The project, which has become known as the Ashby high-rise, still doesn’t have an official name, but has faced objection from the surrounding community because of its location in a mostly residential area. Neighbors fear that the massive building will have a negative effect on traffic and property values.

Yes, it does have an official name. It’s the Ashby Highrise. I don’t care what the developers eventually decide to call it, it will forever be the Ashby Highrise. Frankly, Kirton should save us all some trouble and just formalize it.

One more thing:

In addition, Kirton expects the project to create 2,500 full-time jobs and generate $1.5 million in tax revenue annually.

The high-rise will feature a restaurant, but the developer has done away with plans for a day spa and significant amount of office space to reduce traffic headaches. In addition, the project was originally planned as a condo project, but is now a luxury apartment building due to market conditions, Kirton said.

Um, what? 2,500 full-time jobs? Based on what, exactly? I’m trying not to be snarky here, I’m trying to envision how a mostly residential building could possibly do that. Do you think Kirton has an economic study stashed somewhere, or did he throw that out to see if it would get reported as is? Help me out here, I have no context for this, it just sounds ridiculous to me. What do you think? Swamplot has more.