Besieged by the Bay

Beset by skyrocketing tax assessments and wary of encroaching development, property owners in San Leon-Bacliff wonder if their "poor man's Riviera" may soon go the way of other waterfront zones along Galveston Bay.

It's a beautiful, breezy day on Galveston Bay, and Rick Handley is in his element, taking in the world from the deck of neighbor Sonny Butler's home overlooking the water. There are cold beers all around, and Handley is his usual off-color self, joking and taking playful digs at his companions.

But Handley's spirits noticeably sag when the conversation turns to the notices he and his fellow owners of waterfront property in the unincorporated towns of San Leon and Bacliff received last month. The Galveston Central Appraisal District pegged the value of his three lots at almost $220,000 -- a 40 percent increase over the previous year. After an informal hearing with a district appraiser, Handley managed to win a reduction in his land value due to the poor condition of his bulkhead, leaving him with an increase of 23 percent.

A retired plumber who bought his place in 1963, the 72-year-old Handley gets about $300 a month from his plumber's pension to add to his $853 Social Security check. With his expected tax increase, he'll be paying almost a third of his income to cover his property taxes. "It'll make me drink cheaper beer," he jokes, though he acknowledges he'll be pressed to make ends meet.

Compared to some of his neighbors, Handley got off easy. The land value of Sonny Butler's homestead more than doubled, from $34,340 to $77,660. Other property owners saw their assessments more than triple.

A former president of the San Leon-Bacliff-Bayview Chamber of Commerce, about the closest thing to local government in the area, Butler operates a small motel behind his home, which he rents, by the week or month, to workers in the nearby Texas City petrochemical plants. But he's ready to vacate the bay area, and has had the property on the market for four years. He hasn't found a buyer. To Butler, the dramatic jump in assessments is both unfair and out of line with reality.

"It's like taking a sledgehammer and hitting [property owners] on top of the head," says Butler. "If they would write me a check for what they have [the property] appraised for, I'd be gone tomorrow."

Butler isn't the only one. "We really have to do a lot of soul-searching and a lot of budgeting to see if we can stay," says Ann Shaner, who lives with her husband Gene on Cliff Drive in Bacliff. The assessment on their land more than doubled, and that was after they persuaded the Central Appraisal District to reduce the original amount by almost $10,000. The Shaners retired from the construction business, but still have a few years to go before they qualify for Social Security. "We're not employed," Shaner says. "We are trying to make ends meet on our few investments."

Even if the Shaners hang on, it's likely that some of their neighbors won't. And that may mark a turning point for San Leon and Bacliff, two of the last remaining waterfront redoubts on Galveston Bay still inhabited mostly by middle-class homeowners. Situated on a small peninsula that juts into the bay several miles east of League City, the communities are a last bastion of bayfront life the way it used to be, having managed to retain their unpretentious, everyday character. "It's a little country town," says Bacliff's Marion Medlock of the area.

The prospect of struggling to survive or being forced to move has residents frustrated and searching for an explanation. But aside from CAD staffers, who many residents claim have been unresponsive or rude, the residents don't know where to point their fingers. Many have heard the rumor that Merv Griffin has bought property in the area for a casino he wants to build and has influenced the CAD to try and clear the waterfront of middle-class homeowners. Others accuse the local school boards, who have influence in the CAD, of trying to get assessments jacked as high as possible to cover their bloated budgets. Hard evidence to support either theory, however, is lacking.

Medlock has been organizing a group to protest their assessments and has called two meetings to discuss options. "I'm not very political and I don't like doing this," she explains, "but I felt like somebody has to do it, so I jumped in."

The odds are stacked against Medlock and her allies. CAD chief appraiser Ken Wright and his staff defend the dramatic increases, saying that property on the waterfront has been undervalued in past years and that the higher assessments are just the necessary correction required by law. He says he and his staff have spent countless hours working with San Leon and Bacliff property owners to do whatever they can, but they can only do so much. "The sales that we have indicate that waterfront property values are currently more than we previously had them on the rolls for," says Wright. "Substantially more, in some cases."

Still, the assessments have some obvious flaws. An examination of individual property values revealed a number of inequities that the CAD staff was unable to explain. Some people are being assessed for abandoned rights of way they don't even own, while others are not being assessed for the same rights of way.

And the magnitude of the increases raises a fundamental question of fairness, even if the CAD can defend its actions.

"Whether it's fair or not, I don't think so," says Galveston County Tax Assessor-Collector Chuck Wilson, who also serves as an appointee on the CAD board. "But I'm not the person who calls that shot."

And while he sympathizes with the concerns of the residents, Ken Wright says the CAD's mandate doesn't permit it to take an individual's economic circumstances into account when valuing property.

"Our job is fairly straightforward and very easy, really," says Wright. "We try and divorce ourselves from the human element as much as possible."

Not much happens in San Leon and Bacliff. The fishing industry, once the foundation of the local economy, has been declining for years. Unlike in nearby Kemah, where restaurants and gift shops line the streets and pleasure craft have mostly replaced the shrimp and oyster boats at the docks, tourism hasn't yet rejuvenated the local economy. Nor have the many beer joints that dot the landscape -- at $1 a Lone Star, profit margins are small.

San Leon doesn't entirely lack for excitement. An occasional murder or fatal accident provides good gossip for the beer halls. In 1990, a Greek tanker collided with two barges three miles offshore, sinking one and spilling 700,000 gallons of oil into the bay. Local oystermen nearly declared war when the state canceled the 1987 oyster season due to depleted stocks.

But for the most part, the town plods along in a sleepy, small-town way, insulated from the swirling social and political currents of Galveston to the south and Houston to the north. Even the throngs who travel to Kemah for weekend recreation seem unaware of San Leon's existence. "Most Houstonians don't have a clue about it," says Clay Moore, a Houston attorney who bought a getaway place in San Leon and moved there permanently about five years ago.

Still, San Leon is a veritable beehive compared to its early days, when the landscape mostly consisted of a few vast fig farms and a cannery. "The figs grew like you wouldn't believe," recalls Buck Smith, who built his ramshackle house on the bay in 1947. "During the [canning] season, this whole peninsula smelled like fig preserves."

The cannery closed before World War II; the fig farms stopped harvesting in the late 1950s. Petrochemical plants rose to the south in Texas City and provided jobs for some of the residents. Others worked the oyster beds offshore or fished the rich waters of Galveston Bay for a living. Much of the peninsula was subdivided into lots and put up for sale. Many of the interior lots remain undeveloped and overgrown, creating the impression of a natural prairie bordered by clusters of houses. "It's not prairie," notes Smith. "It's 25-foot lots all cut up."

The waterfront was first developed in the 1930s, as city dwellers looking for a temporary escape built small weekend and summer cottages. Back then, land was cheap. Dora McWhirter, a Bacliff resident who has lived in the area for almost 70 years, first bought property there in 1936 for $500 -- including a house. "You could buy any lot you wanted for $25," recalls McWhirter, who lived on a fig farm in her youth and later worked at the cannery.

Over the years, the price of land inflated, but San Leon remained relatively affordable. As waterfront property in Galveston and elsewhere on the bay grew increasingly expensive, middle-class families and retirees who wanted to live on the water chose San Leon and Bacliff, the "poor man's Riviera," as some locals called the area. Where only a handful of full-timers once lived, permanent residents now comprise the majority in many bayfront neighborhoods.

The area remains economically depressed. Few businesses have moved into San Leon or Bacliff, and jobs are scarce. With yields declining, many shrimp and oyster boats sit idle. The housing stock reflects the economy -- away from the waterfront, sagging, patched wood-frame houses and grungy trailers rule the yards.

Though a little better maintained, the houses on the waterfront more resembled their interior neighbors than typical coastal estates. When funds permitted, owners would tack on additions, renovate their bulkheads or otherwise make spot improvements, the improvised feel in keeping with the ever-shifting coastline.

Eventually, someone with plenty of cash and a grand vision was bound to notice the large and comparatively cheap stretches of waterfront in San Leon and Bacliff. ZZ Top bassist Dusty Hill built his dream palace several years ago on the peninsula's north shore. Local businessman Chuck Jardina purchased prime real estate, constructed expensive houses on it and resold to wealthy buyers at a nice profit. New three-story beach-style vacation homes sprouted next to the older dwellings, creating an odd aesthetic mix similar to the blocks of West University Place where huge Tudor mansions tower above the surviving ranch-style teardowns.

Sales to the well-heeled are about the only ones taking place in the area. Wary of the threat of hurricanes, banks are reluctant to make loans for construction along the shoreline, meaning that buyers generally have to finance the sales themselves. Maintenance of the bulkheads and other protective measures are extremely pricey, as is insurance, if you can get it. About the only people who can afford to buy and build anymore have big-balance bank accounts.

The model for what might eventually happen can be found a short distance to the north along the Clear Creek Channel to the bay. In the early 1980s, Kemah looked a lot like San Leon and Bacliff still do. But the funky atmosphere has given way to a more moneyed air. What was once called "Saigon Harbor" because of the plethora of Vietnamese fishing boats docked there is now an exclusive marina crowded with pleasure craft. The modest houses that lined the bayfront have mostly been replaced by fancy homes with private piers and yacht slips. And after the Landry's chain recently purchased the four waterfront restaurants it didn't already own, Landry's chairman Tilman Fertitta announced plans to transform the strip with retail shops and possibly a boardwalk and a Planet Hollywood or Hard Rock Cafe.

With Kemah locked up, it's to be expected that the search for prime waterfront lots for development has turned south -- toward San Leon and Bacliff. The rumor is spreading around town that Fertitta has purchased the prime lot occupied until recently by Bacliff By The Sea, a restaurant that burned several months ago. Fertitta says he hasn't.

Regardless, those who are buying on the water are paying top dollar for the land. Priced beyond the ability of most people to pay, the poor man's Riviera may soon go the way of other waterfront zones along the bay, or any other exclusive community. Middle-class inhabitants such as Rick Handley may last awhile, scrimping to pay escalating taxes and other expenses, but their clocks are ticking.

"Eventually," Handley laments, "it'll be like West University."

Sandy Peck bought a pair of San Leon waterfront lots on Avenue A 1/2 in 1989. A teacher in the Clear Lake schools, Peck had always desired a home on the bay and picked San Leon for one reason. "It was cheaper," she explains. She lived in a tiny rental house across the street with her daughter while working several jobs to save enough for two adjacent lots, which she bought in 1994. To keep costs down, Peck built her own house on the property with help from her friends.

Peck hoped to leave the place to her daughter, who recently graduated from college and now lives in Houston. But the meteoric rise in property values -- the assessment on her land tripled this year, from $25,710 to $79,530 -- will make that difficult, if not impossible. "Down the road here, it's gonna have to be sold," says Peck. "I can't stay."

Ironically, the Galveston CAD is using Peck as an example of how property values have increased in the area. For her second two lots, according to CAD records, she paid $44,000, or $7.85 per square foot. Averaging that and other sales in the area, says the CAD's director of appraisal operations, Jerry Daum, the current value of waterfront property stands at about $6.50 a square foot.

One little problem, says Peck: The CAD figure is wrong. "That isn't what I paid," she says, placing the price at closer to $36,000, not including closing costs and other expenses picked up by the previous owner. But even using her figure, Peck still paid $6.42 per square foot for her land -- close to what the CAD says it's worth.

Other sales in the area would appear to push the number downward. A large waterfront tract recently purchased by local businessman and developer Chuck Jardina, for example, sold for close to $2 per square foot. But Jerry Daum notes that a chunk of land as big as Jardina's generally sells for less per square foot than smaller lots. Besides, for every sale below $6.50, there's another one higher; $6.50 is the average, Daum says.

Explaining how CAD appraisers arrived at specific values is a tricky process, especially since every property seems to have adjustments for size, location and other factors. "It's a very complicated thing," says Daum. "Not too many people can handle it. Not too many appraisers can handle it."

This may explain why so many of the taxpayers who have complained to the CAD about their property values have come away frustrated. Jean Helton, whose family has owned 4.75 undeveloped acres on the bay since the 1940s, saw the property's value more than triple in 1997, from $225,000 to almost $700,000. When she and her son Pat went to the CAD offices for an informal meeting with an appraiser, the first of two steps in the appeal process, she was rebuffed. "He wouldn't do anything," says Helton. "He said, 'That's it.' "

Others have had more success. Jardina brought a real estate expert to his informal hearing, and his assessment was reduced to $355,540, about half that of Helton's for almost the same amount of land. CAD land supervisor Mark Meyer explained that Jardina received discounts for the size and depth of his property, plus a 30 percent "marketability" discount because "it's harder to sell anything on the water."

Asked why the property was deemed less marketable, given that Jardina had just bought it several months earlier, Meyer grew impatient. "I don't know what else to tell you," he snapped. "Any other questions?"

Jerry Daum had a different explanation. Since Jardina had only paid about $350,000 for the land, it didn't make sense to assess it for much more. But the CAD had to use the $6.50 base line figure, Daum says, so the appraiser had to justify the adjusted figure. Thus, the extra 30 percent discount. "They're using a percentage to get to the value they perceive to be right," he says.

Ed Jones, who has lived on Cliff Drive for the past 20 years and appealed his own assessment, puts it another way. "They can prove anything they want to with figures and a computer," Jones says.

As for why Jean Helton didn't get the same benefits as Jardina, Daum says that her formal appeal before the appraisal review board is yet to come, and that she may end up getting her assessment adjusted then. "Her case," says Daum, "is not resolved yet."

This is all news to Helton, who says she's heard nothing about her prospects before the review board, or even when her hearing will take place.

Whether she'll actually obtain satisfaction remains to be seen. After a similar unpleasant experience at his informal hearing, Ed Jones hoped to persuade the review board his property had been overvalued. Jones made his appearance several weeks later after his request to postpone the date was rejected. "I was unprepared," he says, and at that point the result was inevitable. "I was told to take it or leave it."

After a formal appeal before the appraisal review board, a taxpayer's only recourse is in civil court, a step beyond the reach of most San Leon and Bacliff residents. And though the CAD has made a number of small adjustments to individual properties, there's no sign of backing away from the overall increase.

The CAD is also insulated from the democratic process: Even if the taxpayers wanted to, there's almost no way to directly affect district policies. The chief appraiser answers only to the CAD board, which consists of five members chosen by the cities, towns and school districts in Galveston County. Because of the arcane manner (unique to the Galveston CAD) in which board members are selected -- by giving extra weight to school districts with big budgets -- four of the five CAD trustees also serve on area school boards, none of which include San Leon or Bacliff.

Only tax assessor-collector Chuck Wilson, who is elected countywide, can be called to account by voters. And Wilson says that practically speaking, he has little authority. "I find myself accepting the policy set by the chief appraiser," Wilson explains.

The residents' sense of helplessness has soured them on the CAD -- and on government in general -- and it's spawned a number of conspiracy theories to explain the revaluations. Some believe that the increase was ordered to counteract the property tax cap and rollback initiatives that circulated through the Legislature this spring, threatening the overall county tax base. Others think the CAD is in cahoots with developers to drive people off their land and open it up for a future casino or other massive project.

Wilson has his doubts about the hefty assessment increase in San Leon and Bacliff. A gregarious politician with a salty tongue and a penchant for self-promotion, he isn't sure there have been enough sales on the San Leon and Bacliff waterfront for the CAD to identify a trend, and he questions the fairness of doubling or tripling values on senior citizens and others on tight budgets.

But Wilson, who says he knows "every crook and crook wannabe" in Galveston County, doubts there's any conspiracy afoot.

"San Leon might have gotten more beat on than anybody else," he says, "but everybody in the county is pissed off."

Ill will toward government is nothing unusual in San Leon and Bacliff. The sentiment dates at least back to the early 1980s, when tensions between American and Vietnamese shrimpers that had been building for several years erupted in violence. With the help of the federal government, a number of Vietnamese refugees resettled on Galveston Bay in the late 1970s, borrowed money for shrimp boats and began competing head-to-head with the locals. Angered by what they claimed were below-the-belt fishing tactics by the newcomers (and dwindling revenues), the natives grew restless. Three Vietnamese boats and a home in nearby Seabrook were torched. The Klan got involved. During one confrontation, a Vietnamese shrimper shot and killed an adversary; the gunman pleaded self-defense and was acquitted.

Hordes of reporters descended on San Leon, Seabrook and surrounding towns. Playing up the Klan angle, which was actually more sideshow than integral to the conflict, the newspaper and television reports portrayed area residents as bigoted rednecks, an image that still stings. Several people who said they'd been burned by the media during the shrimp battles refused to talk to the Press for this story.

For the most part, the Vietnamese and Texan shrimpers have ironed out their differences, though mistrust remains. The two groups even joined forces in 1994 to protest proposed state government restrictions on Gulf Coast shrimping. But Vietnamese shrimp boats and wholesalers now dominate the waterfront, a source of resentment for those who feel pushed out. These days, though, their vitriol is directed as much at state and federal government, which they blame for stacking the deck against them.

From such seeds of frustration spring such anti-government groups as the Republic of Texas, which, in fact, has a few members in the vicinity. After Leonard Clark Cooper's waterfront property was seized and sold for nonpayment of taxes, Cooper fired off a series of threatening letters and legal notices to the new owner and others demanding justice under the flag of the Republic. "You do not own my property," Cooper wrote, "but you will feel like you paid for it several times over and all who participate in this scam will feel likewise." Cooper's current whereabouts are unknown, though Jerry Daum says he's not in the area. But Daum is taking no chances. "I won't send any appraisers over there," he says.

One local businessman, who wears his distaste for the government on his sleeve, cautions that people like Cooper aren't to be dismissed lightly. "You know Fort Davis?" he says, referring to the West Texas town where Richard McLaren made his recent aborted stand against the Department of Public Safety. "That could happen here."

Indeed, some of the residents are talking revolt, though within the bounds of propriety. At the second community meeting organized by Marion Medlock, various people spoke about the possibility of putting together a statewide referendum, similar to Proposition 13 in California.

"There's so much about government that's unreasonable," says Bacliff resident Ed Jones, who sees the property tax issue uniting his neighborhood. "Hey, if California can do it, why can't we?"

That kind of initiative takes a tremendous investment of time and resources, though, and the ability of Medlock's group to sustain such an effort is doubtful: While the first meeting drew more than 100 people, the second attracted fewer than 60. One fiery speech about taxation without representation brought a smattering of applause, but for the most part, those in attendance seemed resigned to their fate, hoping at best to shave a few bucks off the bill. Medlock herself understands the odds. "I'm depressed," she said a week after the second meeting. No further explanation was necessary.

Even if it takes another decade or two for San Leon and Bacliff to gentrify, says Chuck Wilson, the die is already cast. That's just the way of it. "When everybody finds paradise, it changes," he says. "Everybody wants a piece of it."

In the end, though, the last laugh may belong to those who are forced to abdicate their property to the well-heeled. Constant erosion from the elements has carved a number of feet from the shoreline since the original maps were drawn. Avenue A, which was designed to run along the north shore of the peninsula in San Leon, now stops and starts because some of its intended path has eroded away. And plenty of residents still remember Hurricane Carla back in 1961, a killer which destroyed many of the houses on the bay and took away a chunk of waterfront.

Buck Smith lost two of his walls to Carla and spent the first few days after the storm shooting at looters and pulling pieces of barge out of his living room. Smith, who thinks he'll move back to Houston soon, knows in his bones that the Big One is on its way.

There will be another hurricane, he says, and "it'll wipe out this place.

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