Wildlife Exemption Battle Brews in San Antonio
September 13, 2009 | San Antonio Express News
Four years after the city granted a famously controversial tax deal to the PGA Tour golf resort, the owner is fighting for lower property taxes by claiming the site’s two golf courses provide a wildlife refuge for birds and deer. In a legal battle with the Bexar Appraisal District, the owner, SA Real Estate, contends about 375 acres of land used for the golf courses merits a wildlife management valuation worth about $1.4 million in tax savings over the past two years.
That amount doesn’t include future tax breaks on the land, valued this year at about $15.6 million. “They’ve gone out of their way to comply with everything that the law requires,” said Tim Parma, a tax agent for the company. “They’ve got a very green, environmentally friendly golf course.”
Appraisal review boards rejected two requests for the wildlife designation since last year, and the appraisal district is fighting a 2008 lawsuit filed by the company, an affiliate of Denver hotel developer Miller Global Properties.To county appraisers, the request contradicts common sense.
“I don’t think most people think of a golf course as a wildlife refuge,” said Mary Kieke, the county’s deputy chief appraiser. “Setting aside any insecticide and fertilizer contamination issue, clearing land for fairways cannot possibly enhance any wildlife’s access to shelter.”
At stake are millions of dollars in future revenue for local taxing entities, including Bexar County, Judson Independent School District, University Health System and Alamo Colleges. The proposal to develop the site partly over the environmentally sensitive Edwards Aquifer recharge zone launched one of the most divisive battles in the city’s history. After a three-year dispute charged with politics and environmental concerns, developers won an agreement in 2005 that the city would not annex the development for 29 years. The abatement cost the city about $50 million in future tax revenues.
Developers also prevailed with the creation of a special taxing district to help pay for the resort. The district, which solely encompasses the development known as Cibolo Canyons, allows the resort owner to levy taxes to fund improvements on the property.
The project sits on about 2,800 acres of land at Bulverde Road and Stone Oak Parkway. It includes a 1,002-room JW Marriott hotel, a $13 million water park, seven restaurants and a spa. The two 18-hole golf courses, part of the Tournament Players Club network, are set to open next year, along with the other attractions. So far, the latest tax dispute has remained relatively quiet, but it has the potential to revive old debate.
“This is a continuation of the efforts by the owners and developers to shift the burden of the development onto other taxpayers,” said environmentalist Richard Alles, who opposed the PGA resort. But the company has gained support from some proponents of the wildlife valuation, including Texas Parks and Wildlife biologist Richard Heilbrun, who made suggestions on land management for the property. “In an urban area, any protected green space is valuable,” he said. “You’d be amazed at the wildlife diversity that’s found on golf courses, some corporate campuses, cemeteries and urban green belts.”
Tax penalty
The battle began last year when the appraisal district revoked a longstanding wildlife designation on the land, prompting a tax penalty of about $688,840 against SA Real Estate for changing the land use. Owners subject to the penalty, known as a “rollback tax,” must pay the difference between taxes on the land’s agricultural value and the amount that would have been paid on the higher market value.
In response, the company has protested its appraisals for the past two years, arguing that construction of the golf courses left most of the wildlife habitat untouched. Initially, the company asked for the lower tax valuation on all of the golf course land, but retooled its argument this year. Instead of asking for a tax break on all 489 acres, SA Real Estate applied for the lower valuation on 375 acres, cutting out those portions of irrigated land explicitly devoted to the golf holes.
“We’re not asking for wildlife on the portions of this property that are being used as the golf course — the roughs, the greens the fairways and all that,” Parma said at a protest hearing in July. He said the areas continue to provide everything that wildlife needs: native plants for food and shelter, grasses and trees left between the holes and water from the ponds. Still, review board members seemed incredulous.
“How in the world can they have all that control over all those animals with fairways, tees and greens in the middle of it?” panel member Wayne Mendicino asked.
To receive the tax benefit, Texas law requires landowners to take at least three of seven possible steps that benefit wildlife. Parma said the company has taken pains to carry out all seven practices. For example, site managers clear overgrown brush, control erosion and spread grain for deer and quail, according to the company’s wildlife management plans. Managers also plant native grasses for food and keep nest boxes for songbirds.
The company also has invoked rising concerns over the endangered golden-cheeked warbler. On separate parcels north of the golf courses, developers set aside about 780 acres as a conservation area that’s home to warblers. That acreage already is taxed at the lower wildlife value. The resort also includes a large housing development that is taxed at residential property rates.
The developer, Forestar Real Estate Group, formerly known as Lumbermen’s Investment Corp., wasn’t aware of SA Real Estate’s request for the lower wildlife valuation.The former wildlife manager on the property, George Hollis, said clearing on the courses didn’t interrupt the birds, and some warbler sightings continue on the courses. “These golf courses were designed to create golden cheeked warbler habitat instead of destroy them,” Hollis told a review board last year. But county appraisers doubt warblers would prefer the golf areas to the nearby preserve.
“There are thousands of acres out here of native area,” appraiser Joel Martin said at the hearing. “If I were a bird or a deer, I’d probably stick to that vs. coming to a golf course.” He said it’s common for designers to leave swaths of native land on golf courses. The wildlife management efforts touted by SA Real Estate are standard golf course features, he said. “The supplemental water? Those are water traps,” Martin said. “The native areas on the side? So you don’t look at the hole next to you.”
What would Tiger say?
Today, construction on both courses is complete and the playing areas have an organic feel. During a tour last week of the south golf course, called The Oaks, white egrets, ducks and doves dotted the landscape. Cedar, mesquite and oak trees line the playing areas. The holes are isolated between as much as six acres of thick trees and brush. And the outlines of the ponds and sand traps reflect the gnarled contours of the Hill Country.
Regardless of how the courses look, both sides of the tax skirmish agree the legal outcome hinges on one question: what is the primary use of the land? The attorney for SA Real Estate, Joseph Harrison, said the golf courses haven’t changed the areas around the playing fields. He contends that state law allows appraisers to designate some parts of the property as golf course while leaving most of it under the wildlife valuation.
“The primary use is still wildlife,” he said. “You have to look at use on the ground section by section. Open space doesn’t work all or nothing.” County appraisers believe the golf courses trump the preservation of the native land left on the parcel.
“When they ask Tiger Woods what he’s coming to do, he’s gonna say he’s coming to play golf,” Martin told the review board. “It’d be different if I had 500 acres of wildlife and I went out there and hit golf balls once in a while. But not a developed, multimillion-dollar golf course.”
It’s not clear whether a wildlife valuation on the golf courses would set a precedent. County appraisers and the company’s supporters said they know of no other golf course that holds the wildlife valuation.But Hollis, the former wildlife manager on the property, urged appraisal board members last year to use the case as an incentive for other golf course developers.
“Adding golf courses to this going green (concept) is going to add new meaning to it,” Hollis said. “You all have the ability today to really revolutionize the design, development and construction of all future golf courses in the state of Texas. One of the things that other developers will pick up on is what they will get by being environmentally friendly.”
Heilbrun, the parks and wildlife biologist, said the company has earned the incentive. “The bottom line is you can’t look at a project and see what it was before,” Heilbrun said. “You have to look at what the other possibilities would be if the golf course didn’t exist.” But the idea that the company should receive additional tax incentives galls some activists. Alles, with Aquifer Guardians in Urban Areas, pointed out the city already required developers to preserve the native habitat around the courses.
“Non-play areas that surround the fairway and roughs will be left as native Hill Country Habitat,” according to the Environmental Management Plan. “They’re double-dipping,” Alles said. “They got their incentives from the city, and now they want to go back and use the same actions to get additional incentives from the county.”
So far, the company has not swayed at least one key figure in the old PGA debate. Bexar County Judge Nelson Wolff, who pushed to bring the resort to San Antonio, said he doesn’t agree with the company’s position. “If they’re trying to carve out pieces of the golf course and saying they’re exempt, that doesn’t seem right,” he said.
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