Developer Larry Hamilton, founder and CEO of Hamilton Properties Corporation, is one of many landowners facing a fight with the Dallas Central Appraisal District regarding its new appraisals of downtown properties. Hamilton recently purchased a parking lot at 1114 Wood Street as a potential site for his convention center hotel proposal and is partnering on an aloft hotel project at 1033 Young Street. Both parcels were previously valued at $30 per square foot -- then jumped to $100 per square foot.
“We’ll have to argue it,” Hamilton tells Unfair Park. “Obviously, the pendulum has swung too far in the other direction.”
He says the increased values for downtown properties will result in higher parking rates, which may deter businesses from coming downtown. Higher parking costs, along with having to pay higher rents to accommodate the property tax hike, will be a deciding factor for businesses weighing the option of coming to Dallas instead of suburbs like Plano or Las Colinas, where parking is free and rents are lower. Hamilton claims the increased values serve as a big hit to downtown revitalization.
Hamilton calls the new appraisals “excessive,” but says he wasn’t shocked given the publicity surrounding the city’s pending acquisition of the Chavez property as a site for a potential convention center hotel. He says the convention center hotel debate brought on the revaluations, but stresses that the hotel “is much needed and is a good idea.” Hamilton is one of five developers with a convention center hotel proposal under consideration by the city.
Because he favors limited government and low taxation, Hamilton says it’s generally detrimental when taxes go up in an area. However, he does maintain there shouldn’t be dramatic discrepancies between the valuations of vacant land versus improved properties because it’s in city’s best interest to see vacant parcels being held as surface lots redeveloped to a higher and better use.
“So, I suppose, from that standpoint, they should be paying their share of the load,” Hamilton says. “And we will be because we own one of those parcels.”
The value of Hamilton’s parking lot on Wood Street jumped 236 percent, from $2.5 million last year to $8.4 million. The estimated taxes on the property are now approximately $211,000 compared to approximately $63,000 in 2007. He says the mass appraisal process used by DCAD tends to be “fraught with oversights,” “very crude” and “inaccurate.”
“It forces the property owner to go out and have to fight, which is inconvenient,” Hamilton says. “This particular controversial sale [the Chavez property] has negatively affected all owners of vacant land downtown, so that’s unfortunate.” --Sam Merten