Appraisals under fire

The Valero refinery in Texas City won their appraisal lawsuit earlier this year. 

Photo by Jennifer Reynolds

TEXAS CITY — Valero’s court victory in contesting its Texas City refinery property valuation prompted a call by the county’s tax assessor for the central appraisal district to dump the firm that handles industrial value calculations.

In 2011, the Galveston Central Appraisal District assessed three of Valero’s properties, which include the refinery, to have a taxable value of $526.8 million. Valero argued that appraisers did not fairly compare the refinery with other industrial properties in the city and that the value of the facility was actually $333.4 million.

On Feb. 8, a jury in Judge Lonnie Cox’s 56th District Court ruled in Valero’s favor and lowered the company’s assessed value by $189.4 million for the 2011 tax year. That means the Texas City school district, the city, county and College of the Mainland are set to refund Valero about $4.874 million.

While the Galveston Central Appraisal District is likely to appeal, County Tax Assessor Cheryl Johnson renewed her call for the appraisal district to fire Hugh Landrum and Associates, the firm that has handled the industrial valuations for the district for about a decade.

“The history of the (Galveston Central Appraisal District) over the last decade with regard to defending its values has been dismal,” Johnson said. “It has failed to hire qualified, convincing companies to perform the industrial valuations, convincing qualified experts, and it has not developed a winning legal team or have a legal strategy that is successful.”

Calls to Hugh Landrum Jr., the president of the firm and a former Texas City City Commissioner, were not returned Wednesday.

Ken Wright, the district’s chief, said now was not a time to point fingers, but admitted he is not happy with the work Landrum and Associates did on the Valero case.

“Taking action hastily really would not accomplish what you want,” Wright said. “When you have calmer heads prevail the right decision will be made that won’t be in conflict with our goals.”

Wright said it would be up to the appraisal district’s board to decide whether changes are needed.

Landrum and Associates is a 45-year-old engineering firm that specializes in valuating industrial facilities. The work is complex and includes a lot of regulation exemptions, including exemptions for environmental equipment and the little-known comparison law that Valero used in this case.

The firm also handles industrial valuations in Brazoria, Dallas, Fort Bend, Harris, Liberty, Polk, Waller and Wharton counties.

The Jefferson County appraisal district is facing a lawsuit by Valero over its property values that were not handled by Landrum and Associates, but another firm.

Contact Mainland Editor T.J. Aulds at 409-683-5334 or tjaulds@galvnews.com.

(5) comments

Paul Hyatt

How many times has this happened since this company has been doing these evaluations???? Isn't this the 2nd or the 3rd time that this has happened since these yokels have been doing this???? Makes me wonder if they do the home evaluations since they seem to be off kilter much of the time....

Randy Chapman

Sure they overcharge homeowners, but homeowners generally don't retain high caliber legal times like corporations do. This is even more true when talking about the oil industry, where they use their obscene profits derived from an unregulated monopoly to screw the consumers and taxpayers.

Gary Miller

Repeat after me. "businesses do not pay taxes, their customers do".
Repeat after me. "businesses do not pay taxes, their customers do".
Repeat after me. "businesses do not pay taxes, their customers do".
Repeat after me. "businesses do not pay taxes, their customers do".

I would like to know how much we pay GC CAD. The more mistakes they make the more people ( lawyers ) they can hire to litgate their mistakes. Being wrong is more profitable than being right.
How much extra do GC CAD mistakes cost taxpayers?

Gary Miller

Business employ workers who pay Property taxes. Businesses don't pay taxes. They add their property taxes to their prices and cover the taxes as a cost of doing business. The true result of property taxes on business is the business will employ fewer taxpaying workers.
A net loss to the economy and taxing agencies.

Kevin Lang

If the business isn't paying property taxes, then why would they hire fewer workers? Wouldn't they just increase their prices as you said?

I think you left out the part where there's a limit on how high a business can raise prices before sales suffer, which means that either the business stops operating, cuts staff, or stops selling the products affected. Either of these could negatively affect the total amount of tax receipts for the taxing agencies.

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