Beginning in 2014, Central Market parent HEB began snapping up parcels on the city block bounded by Lemmon and Bowser Avenues between Reagan and Throckmorton Streets. Their intent was to open a Central Market. That plan has been abandoned for what I last heard was a Central Market planned for the old Albertson’s location on Lemmon and McKinney Avenues.

The main reason the deal failed was zoning. The parcels facing Lemmon Avenue are zoned for commercial operations while the Bowser-facing lots were zoned for residential use. The Oak Lawn Committee told HEB there was no way they’d support a commercial encroachment into a residential area. I’m sure the fear was that if they’d said “yes” here, other Lemmon Avenue businesses would want to convert the residential backs of their blocks to commercial too. (more…)

Dallas Land Use

The Productive Land Use Series will focus on annual property tax revenue at the neighborhood level. Since land is the city’s primary resource, this series will delve into how we are using our land and if we can use it more efficiently. For part 1, click here.

In the previous post, we looked at various types of housing throughout Dallas and evaluated the property tax revenue per acre collected every year in order to analyze a neighborhood’s financial contribution to city operations. Using a well-maintained, single-family neighborhood as our standard, $30,000 collected per acre annually is our baseline to which we judge the financial performance of our land use.

As we look at the productivity of our neighborhoods, we see that the desirability of an area reflects positively in property tax return for the city. More often than not, the attractiveness of a neighborhood is related to the commercial amenities located in the vicinity of the residents. These third places, where people work and play, not only help define the community, but also contribute to the functioning of our city by paying property tax and sales tax.

We should expect higher revenue from our commercial spaces because they see more activity than our homes. From entertainment to employment, commercial spaces bring people together to spend money. As important cogs in our economy, they must also pay their share for the municipal services they require.

First, let’s take a look at the most common commercial space in our city:

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Rob Wheelock headshotShould you treat your home like a commercial property when it comes to property taxes?

For many, a home is their biggest single investment. So why NOT do what the big boys do and scrutinize every expense on your home, from repairs and maintenance to property taxes? We reached out to Rob Wheelock for a sneak peak at how the pros keep those taxes down.

CD: Rob, are you telling me that owners of commercial properties look at their appraisals every year?

Rob:Yes, at least the biggest majority of them do. Commercial is different from residential, in that there are no exemptions or caps, which leads to some potentially large swings in value. I work with Alliance Tax Advisors in business development and every once in a while, I’ll speak to an owner that hasn’t used a consultant, but for the most part, all the big boys use someone. It’s just smart business. Remember the three methods of appraisal the Appraisal Districts use:

1. Sales Approach (the price at which a property would transfer for cash or its equivalent under prevailing market conditions).

2. Cost Approach (Preferred method for special use properties, new construction, limited sales data, or limited income data).

3. Income Approach (Capitalization rates based off net operating income).

Licensed Property Tax Consultants look at all three approaches and work the one that produces the lowest valuation. Let’s say you own a small strip center with three tenants and one tenant moved out and their space has been sitting empty for 6 months. A Tax Consultant would probably look at the income approach because income would be down for the year, which leads to a lower valuation.

CD: Smart. But at what cost point in a residential property is this cost-effective?

Rob: I say there’s no amount too small to save, so I would have my valuation looked at every year, regardless of the value. Property Tax Managers works on a contingency basis and looks at every opportunity to find savings. We have a client that lives behind the Pink Wall in a small condo that was valued at $79,450 last year that we were able to reduce to $36,320 saving her $998 in property taxes. Not bad. And the good news is, they left her alone this year, so she’ll save another $998. Since she has a Homestead Exemption, the most they can increase her value in any year is 10%, so she will be saving for a minimum of 8 more years. Bottom line is, why pay more than your fair share, if someone like us will do all the work for you? Our service shouldn’t be viewed as a cost; we save our clients’ money. It only cost them money if they don’t use our services. Maybe I’m cheap (OK, I know I’m cheap), but I’d rather save money than pay more than my fair share.

CD: I concur! Don’t get me started! What are some other tricks we can learn from the commercial guys?

Realize there are others who knows more about the property tax code, appraisals and valuations than a typical developer/investor. Utilize the professional services available that help bring value and savings to your bottom line. Realize that you are not a licensed property tax consultant, and that a trained team, that works billions of dollars in property values, will always out perform an individual, and save you time and money in the process.

I have to give a plug to Alliance Tax Advisors where I work in business development. This year they will review over $24,000,000,000 (yes Billion) in assets, saving developers and commercial property owners millions of dollars. If commercial property owners leave it to the pros, why shouldn’t a home owner?

 

When Erle Rawlins Jr. and his wife purchased an old laundry business on Congress Avenue, his goal was to take the building and turn it from a cavernous commercial property and into a true townhome. This was in 1934, when most people were trying to find their financial footing after the stock market crash of 1929.

Rawlins was a business-savvy man — a Realtor, natch — and he knew a thing or two about architecture. So he set out on this project with the help of Earl Hart Miller, and what they ended up with is this amazing 3,000-square-foot home around which high-rises and a bustling neighborhood was built.

Even though 3610 Congress Ave. needs a lot of work, she’s still a beauty. There are three bedrooms and two baths, but the real stunners of this property are the living areas. There you’ll find amazing textures, parquet and tile floors, gigantic windows, and high ceilings. They’re rooms where just about anything seems possible.

There’s also a good-sized pool in the backyard, which would be great for garden parties as guests can look up through the canopy of trees and see the buildings of Uptown and the sky sparkle around them.

I’ve already mentioned this, but this historic home is in a desperate state of disrepair, with leaks in the tar and gravel roof endangering some of the architectural features that make this home special. The price of 3610 Congress — a mere $599,000 — takes these conditions into account.

I don’t want to be a Debbie Downer, but the listing says that the zoning could allow for this home to be razed and redeveloped. I hope that a caring person will make this townhome in the heart of Oak Lawn their labor of love. It seems all too special to become rubble.