“After taking into consideration all data received, the Board of Equalization has decided to affirm the city’s latest assessment for both phases of the Ix parcels,” board Chairman Paul Muhlberger wrote in an Aug. 7 email.
The Ix property is owned by Monticello Associates, a group that includes developers Allen Cadgene and Ludwig Kuttner.
There are two separate sections of the Ix property, and city assessors increased the theoretical value of both when assessments were released in January. The land was for many years home to the Frank Ix and Sons textile factory, which closed in 1999.
The 10.75-acre parcel known as Phase 1 includes several businesses such as Studio IX, Blue Wheel Bicycles PsiKick and Brazos Tacos. City assessors originally increased the land value from $1.8 million in 2016 to $6.37 million in 2017.
The 6.723-acre parcel known as Phase 2 is home to the IX Art Park and now the Three Notch’d Brewery and Restaurant. Assessors increased the land value from $1.128 million in 2016 to $5.675 million in 2017.
Monticello Associates purchased both properties in June 2000 for $5.3 million.
After an initial appeal, the assessor’s office reduced Phase 1’s land assessment to $5.1 million and Phase 2’s land assessment to $4.5 million, a reduction of 19.9 percent and 20.7 percent, respectively.
The owners of property were not satisfied and made a further appeal, which led to an appearance in early August before the Board of Equalization.
Susan Krischel, of Monticello Associates, argued during an hour-long hearing that the land where the IX Art Park operates should get a break due to the many festivals, concerts and other events that have been held at the site.
The Board of Equalization disagreed.
“Your client owns a very unique parcel whose highest and best use even with your stated and potential value reducers, in our opinion, is within range of the city’s most recent assessed value,” Muhlberger said.
Krischel said she was disappointed with the decision.
“The IX Art Park has operated as a public service to the community for three years offering low rent to artists and nonprofit organizations, hosting free concerts and events and providing families with a rich and playful park experience,” she said in an interview.
Krischel said by judging the land solely on “highest and best use,” the city is encouraging the property owners to seek ways to maximize its ultimate profit. She suggested the city could have assessed the property based on the amount of income generated.
“Instead, they have decided to punish us for being civic minded,” she said.
City Assessor Jeffrey Davis said Phase 2 did not at the time of assessment have a building on it that generated enough income for the value to be calculated using an income-based approach. So the “highest and best use” mechanism was used.
“Highest and best use analysis is a concept in the appraisal process that requires each property be appraised as though it were being put to its most profitable use,” Davis said. “It must be a legal use, as well as physically possible and financially feasible.”
At the August hearing, BOE member Eric Horton said the property’s value could be reduced if there was a deed or covenant that marked the land’s use as a park.
Since the BOE hearing, the Three Notch’d Brewery and Restaurant has opened in a building on Phase 2.