The Daily Hustle: 4/12/11

Yesterday, just hours before the Historic Landmark Commission recommended a suite of changes to the city's generous tax abatements for historic homes, a lawsuit was filed in the 419th judicial court petitioning the city to stop the practice outright.

The complainants – Dominic Chavez, Alfred Stanley and Chronicle Postmarks author Mike Levy – “ask the Court the stop the Defendants” –the City of Austin, and all individual council members – “from giving tax breaks on allegedly 'historic' properties without first making a finding that there is a 'need' for the tax relief to encourage the preservation of each 'historic' site.” Citing state tax code they allege allows such tax breaks only when needed, they go on to cite examples of owner-occupied homes they feel flout that rule. One example, “House 'B' is a West Austin multi-million dollar mansion built less than 100 years ago,” that was extensively remodeled, then granted an abatement. “The exemption was granted despite the fact that the remodeling had already been done, indicating no 'need' for the exemption.”

The pleading also puts Austin's historic tax practices on blast compared to other cities, noting “in Austin, virtually every property designated by the Council as 'historic' gets the tax exemption. But, in Fort Worth, for example, there are 7,000 historic properties of which only 349 receive tax incentives; in Houston there are 294 historic properties of which only 72 receive tax incentives; and in San Antonio, there are 1,500 historic properties of which only 814 receive tax incentives.”

The revised tax abatement suggestions, passed out of the HLC last night, should wind their way to council at their April 28 meeting, so a change is coming – but what?

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