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The Montrose Management District has backed off plans to send tax levies to commercial property owners in light of the city’s objections to its “illegal” board, Mayor John Whitmire said Wednesday.
In a sternly worded speech at City Council, Whitmire said he believes the Montrose Management District is violating state law by failing to have enough members on its board.
Whitmire said the district has failed to be transparent with the business owners who would be hit with a tax increase. He added that City Council would “consider” appointing new members to fill out the district’s board, which went dormant in 2016 after lawsuits and an outcry from business owners.
“Until we do that, they need to cease and desist, and not even think about taking some official action,” he said.
Why we reported this story
- The Houston Landing has been covering the Montrose Management District’s intended revival for several weeks, and was the first news organization to report on the confusion surrounding the district’s quiet return to the scene.
- In the weeks since, we have spoken with local business owners who object to the district’s proposed levy, and we covered the district’s first public meeting of 2024.
- Now Houston Mayor John Whitmire has weighed in, asserting that the District’s board is running illegally.
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The mayor’s statement marked a major development in the saga of the management district, which emerged in December from a years-long period of silence. One of the business owners who has been organizing against its revival said she was thrilled.
“I would be lying if I said I wasn’t pretty excited,” said Pat Greer, the owner of a West Clay Street health food restaurant. “Right now, we feel like the system is working, and the mayor and City Council heard us.”
The district has been controversial almost since its inception, pitting business owners who appreciated services like added police patrols and street beautification against those who resented having to pay additional taxes.
The district was authorized by a 2005 state law, which allows its assessments to apply only to commercial, not residential, properties.
In 2012, business owners filed a lawsuit seeking to put it out of operation. After years of legal wrangling, in 2018 the district’s board voted to put itself out of existence.
Montrose business owners celebrated, but many were unaware that the board’s vote was conditional upon court approval that never came.
Pointing to that lapse, the district board met again in December 2023. Word soon spread among Montrose business owners that the district intended to send out new tax assessments at a rate of 9 cents per $100 of assessed value for commercial property owners, with certain exceptions. Many were surprised and outraged.
On its website, the management district lists four board members and six vacant positions. Whitmire said Wednesday that the city has been able to confirm the membership of three board members, but state law requires five to sit on a management district board.
“There is no authorized management district,” Whitmire said. “We have been assured, in contact with their consultants, that there will not be a billing sent out until we get an opportunity to properly consider the reinstitution of that management board.”
A district spokesperson confirmed that new tax assessments, which had appeared imminent as recently as a Feb. 29 board meeting, will not be rolled out in the near future.
“The mayor is correct in saying that no assessments are going out until 13 board members are seated,” spokesman Alan Bernstein said.
Business owners should “disregard” for now any notices to pay tax assessments levied by the district, Whitmire said.
Confusion had spread among property owners in recent weeks after one discovered that a private tax collection service employed by the district was listing unpaid back taxes from 2016, Greer said.
“No one has received, in the mail or by hand, an assessment, but it is on the Equi-Tax records right this minute,” Greer said.
Whitmire’s remarks came hours before business owners were set to hold a Wednesday night meeting at a Montrose restaurant to discuss how to push back against the management district.
District C Councilmember Abbie Kamin, who represents the neighborhood, said she was aligned with the mayor on the issue.
“I have since Day One, when there was word that the management district was ‘coming back,’ quote-unquote, I have said this must be done not only with transparency, but with a high degree of engagement from residents and businesses,” she said.
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