Local tax officials are concerned as uncertainty looms over whether Austin's biggest office landlord will be able to pay $17.8 million in property taxes that are due Monday.The commercial real estate mess is just beginning. Uncollected tax bills are going to soar, and many small to mid-sized regional banks heavily into commercial real estate are headed for bankruptcy.
The money is due from Thomas Properties Group Inc. and Lehman Brothers, which, along with the California State Teachers' Retirement System, own 10 office buildings in Austin, including the Frost Bank Tower downtown.
Thomas Properties has gone to court in an attempt to force Lehman Brothers Holdings Inc. to release money from a $100 million revolving loan to pay the property tax bill. But the lawsuit is entangled in Lehman Brothers Holdings Inc.'s complex bankruptcy case in New York, and it's not clear when the Thomas matter might be resolved.
City and county budget and tax officials have met twice in the past two months to discuss the outlook for tax collections generally, as well as the potential impact if the Thomas Properties/Lehman money isn't forthcoming, said Dusty Knight, chief deputy of the Travis County tax assessor/collector's office.
"This could very majorly impact all taxing jurisdictions in the county," Knight said. "Their budgets are contingent on getting the money in a timely manner. If it takes four or five years to get it back, it could affect this year's budgets drastically."
Mike "Mish" Shedlock
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