The ruse of property tax transparency in Texas was laid bare this holiday season with the sale of the KPMG Plaza tower at 2323 Ross Avenue in downtown Dallas. It would be hard to find a better example of the giant con played on Texas homeowners than this 18-story office tower which reportedly sold at the end of 2019 for a cool $240 million. As usual, the Dallas Morning Snooze completely missed the real story surrounding the sale of this trophy commercial property, focusing instead on the glitz and glamour behind Dallas real estate scene.
The real story behind the sale of the KPMG Plaza tower is the corruption of the Texas property tax system, exposed in all of its two-tiered glory. The real story behind the KPMG Plaza tower sale is the fact that this trophy commercial property was assessed and taxed at only 58 percent of its market value for 2019. The real story is the fact that the Dallas Central Appraisal District valued this property at $100 million less than the sale price reported in the area’s largest paper.
The real story is that Dallas area schools, homeowners and other entities were shortchanged by a Texas property tax system which left $100 million in taxable property off the rolls, leaving $2.73 million in tax revenue uncollected on a single commercial tower in Downtown Dallas. This is the simple math sifted from from the appraisal record at the Dallas CAD.
I detailed earlier this year how the Texas property tax scam works in practice here in North Texas. The irony runs thick with the sale of the KPMG Plaza tower, because none other than Ryan LLC is listed as the tax agent for the property. According to Steve Brown at the Dallas Morning News, the tower previously traded hands for $200 million back in 2016. That’s pretty interesting considering the Dallas CAD valued the property at only $115 million in 2018…two years later.
At least now we know what the crony legislators in Austin meant by “transparency” when they dubbed their latest legislative PR piece the “the Texas Property Tax Reform and Transparency Act of 2019”.
This would all be comical if urban school districts in Texas weren’t struggling to educate children across the state in outdated campuses and strained budgets. It would be comical if Austin itself wasn’t dealing with a large homeless population, as the business development groups in the state capital are busy trying to make actual people disappear. It would be comical if thousands of Texas homeowners weren’t being buried by record property tax bills when appraisal districts generally assess them at 90-100 percent of actual market value.
According to the same Dallas Morning News article the office tower at 1900 Pearl was also sold in 2019 for “about $180 million”. If you check the Dallas Appraisal District website, they show a market value of only $87.4 million for 2019. That means the owners of 1900 Pearl essentially saved over $2.3 million in property taxes because of Texas’ two-tiered system, and the gross undervaluation of this office tower.
In the real world it’s not comical. It’s a stark reminder that the difference between what our corrupt leaders tell us they are doing vs what they are really doing behind the scenes is chasm as large as the Grand Canyon. By pretending to reform the Texas property tax system without actually doing so, the Texas Legislature just sowed the seeds of more inequality and more social unrest. The sale of the KPMG Plaza tower isn’t a business success story, as the Dallas Morning News might lead you to believe. It’s a giant failure of crony capitalist government staring us in the face.