The managers of Austin’s Circuit of the Americas race track are arguing the $7 million-plus property-tax bill they receive in January is more than 2½ times higher than it should be, an assertion disputed by the arm of the local government that sets property values.
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Circuit of the Americas says property taxes 21 times too high.
By MartyToohey MTOOHEY@STATESMAN.COM
The managers of Austin’s Circuit of the Americas racetrack are arguing the $7 million-plus property-tax bill they receive in January is more than 2½ times higher than it should be, an assertion disputed by the arm of the local government that sets property values.
The two sides have been in district court since the fall, and Wednesday, in a separate hearing, Circuit of the Americas will argue that government appraisers are trying to overvalue the track for the second year in a row. At stake is roughly $5 million that would be split between the city, county, health care district, Austin Community College and the Del Valle school district. Circuit of the Americas President Jason Dial declined to speak to the specifics of the case, citing the ongoing lawsuit. But he said the tax bill would require the track to add $50 in taxes for each ticket sold.
Travis Central Appraisal District chief Marya Crigler said the district stands by its determination that the track was worth $273 million in 2013, but likewise said she could not speak to many of the case’s specifics because it is in court. “The Circuit of the Americas is a unique and complex property to appraise,” she has said. Track critics said the dispute speaks to the larger debate about whether Texas’ property appraisal system is weighted too heavily in favor of large businesses, at the expense of homeowners.
“They’re basically saying that Travis County homeowners should pay higher taxes to cover what (the circuit) wants us to think it shouldn’t have to pay,” said Bill Aleshire, possibly the loudest Circuit of the Americas critic. The former county judge and tax-office chief added: “It’s ridiculous that after going around telling everyone what an asset to the tax base they would be, and getting tens of millions in tax breaks on the notion they are such an economic boon, that they would turn around and argue it isn’t really worth that much.”
The 3.4-mile-track has hosted the United States Grand Prix, for which it was built, the past two Novembers. In addition, it has staged the internationally televised X Games and Moto GP, among other events. The venue is about 1,500 acres total and also includes a 14,000-seat amphitheater. The Statesman is a corporate sponsor of the amphitheater. Circuit of the Americas has been widely praised for its efficient staging of the events. The track has, quite literally, brought international attention to Austin and, according to its supporters, brought millions of dollars to the city.
But it remains a polarizing bit of Austin civic life, mainly because of the up to $25 million in state tax incentives the track expects to collect for its first 10 years, along with discounted utilities and other enticements the city offered to get the track built after a series of protracted, contentious debates. Track critics say those incentives should not be going to a private event. The cost to build the circuit has been reported anywhere from $300 million to $450 million. The eight pages’ worth of court records filed so far provide few details as to how Circuit of the Americas determined how much the track is worth, and how that differs from the appraisal district’s conclusions.
The track’s lawyers submitted only a one-page letter to the appraisal district in May 2013 requesting an unspecified lower value, according to the appraisal district. At the end of 2012 the appraisal district determined the track was worth $273,110,489, making its property-tax bill $7,349,949.48, according to Travis County Tax Office records. The track paid $2,751,972.89 on time, according to the tax office. The rest of the bill, $4,597,976.59, is based on inaccurately high valuing of the property, according to Circuit of the Americas. Based on the $2.8 million in taxes they have paid, the owners have apparently decided the track is worth roughly $102 million.
Dial, the Circuit of the Americas president, said the bill accompanying a $273 million value “translates to over $50 in taxes per ticket sold. That $50 tax would be on top of sales tax and other applicable taxes. This is an excessive tax burden placed on Austinites attending or wanting to attend events at Circuit of The Americas and Austin360 Amphitheater.” The court challenge is based on the argument that the track has not been appropriately compared to similar properties.
State law allows commercial properties to be appraised based on the median value of “a reasonable number” of comps. Such a comparison has not happened, according to the lawsuit. It’s not clear from the court records what properties track managers think should be used in the comparison.
As of Tuesday, Circuit of the Americas also owed $827,635.80 in late penalties and interest, in addition to the $4.6 million still unpaid from the January bill. But tax office spokeswoman Tiffany Seward said the penalties will ultimately depend on the outcome of the lawsuit. The track is not delinquent on its taxes, according to the tax office. The appraisal district contends the track is now worth $289,242,788, the amount on which the bill arriving next January would be based.
behind the Statesman paywall:
Wondering about those tax subsidies that COTA is receiving while refusing to pay their taxes?
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