The Ellis Appraisal District has filed a countersuit in response to an almost-annual filing by Holcim Inc. that alleges an unfair property valuation of its Midlothian cement plant.
Holcim filed the initial suit to contest its 2018 valuation on July 23 in the 443rd Judicial District Court of Ellis County. The EAD followed with its counter last week.
Kathy Rodrigue, EAD Chief Appraiser, stated the legal action by the appraisal district comes after years of lawsuits filed by Holcim. In fact, she noted the company has disputed its property valuation in 13 of the past 15 years, with 2004 and 2006 being the lone exceptions.
According to the EAD, litigation between Holcim and the appraisal district dates back to 2003 when Holcim first filed a lawsuit to cut the plant’s appraised market valuation of $203 million to less than half of that amount. She explained the suit came despite Holcim having just spent "well over $100 million on a significant plant expansion that doubled its size."
As reported in a 2017 Daily Light article, an Ellis County jury ruled in favor of the Midlothian-based cement plant in its contest of the 2012 property valuation. The new valuation was set at $75 million.
The ruling led to the EAD, City of Midlothian, and Midlothian ISD refunding $1,006,771 in property tax collections to the plant related to the 2012 valuation.
Ellis County returned $146,975.30 in already-paid property taxes, while the school district was forced to subtract $595,494 out of its budget.
“That’s the equivalent of 11 teacher salaries,” Midlothian ISD Superintendent Dr. Lane Ledbetter previously told the Daily Light. “While we recognize the need to increase profits, we encourage businesses to view tax dollars as an investment in their public schools and their future workforce.”
The City of Midlothian declined to comment in the original article and did not provide an exact dollar amount that was to be refunded.
Court documents filed in the 40th Judicial District Court and 443rd Judicial District Court reflect Holcim is contesting its valuation in each year from 2013-18.
With the recently filed countersuit, the appraisal district seeks to defend Texas’ equitable market valuation system and the interests of 66,000 other taxpaying owners, explained Rodrigue.
“We were extremely hesitant to take this step, and have no intention to file suit against other taxpayers who protest appraisals in the normal manner,” Rodrigue wrote in an official statement. “However, enough is enough when you have a major property owner that repeatedly pursues litigation as a first course of action instead of even trying to have reasonable negotiations.”
In the EAD's statement, appraisal district officials stressed that the legal action was only made after careful consideration, and done to protect the fundamental fairness principles embedded in the state’s appraisal system, which is designed to apportion the tax burden equitably among all taxpayers.
According to Rodrigue, this marks the first time in district officials’ recollection that such a suit has been filed against a property owner.
“We strongly believe in the state’s appraisal system, which is designed to ensure that all property owners pay their fair share of taxes based on a reasonable, equitably applied market valuation process,” Rodrigue said. “When one large property owner consistently litigates its fair valuation, it results in other taxpayers having to shoulder more of the load. Quite simply, that just isn’t right. Our board of directors made up of local citizens representing the community, decided it was the district’s duty to stand up for the essential fairness of our process and system.”
Rodrigue also noted that "Holcim has never sought to resolve basic disagreements about its plant’s appraised market value through informal settlement discussions" following the 2013 lawsuit. The tactic is unlike the approach of other major property owners, including other cement plant owners in the community, she explained.
Rodrigue added that lawsuits filed by Holcim repeatedly have asserted claims of "unequal appraisals compared to similar properties, at least in the initial complaint, yet claims have been withdrawn shortly before trial commencement."
“Although the valuation of cement plants is quite complex, the simple fact is that the EAD appraises all three Midlothian cement plants – and resolves all valuation concerns – with the exact same, fair methodology,” the EAD release stated. “The Ellis Appraisal District’s recently filed countersuit is designed to ensure that such highly relevant, factual evidence and testimony about the fairness of its market valuation process can be heard and considered by the jury in any trial that may result from Holcim’s current lawsuit.”
A Holcim representative sated the company values its "relationship with the communities in which we live and work. The Midlothian plant has been in operation since 1987 and over the years, has provided a significant tax base for the town and surrounding communities.
"It is common for businesses to regularly evaluate the fair value of any property," the statement continued. "We are committed to paying our fair share of taxes however we believe the plant property continues to be valued above current fair market value."