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Yet Another Judge Rules That Montrose Property Owners Were Cheated Out of $6.6 Million

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Management districts took yet another judicial blow last week.

On October 31, state district Judge Daryl L. Moore ruled that the Montrose Management District (which was initially formed as the West and East Montrose management districts) violated Texas law and illegally assessed and collected approximately $6.6 million from business property owners in the Montrose. Judge Moore’s findings affirm a November 2016 ruling by now retired Harris County Civil Court Judge Joseph J. “Tad” Halbach Jr. in the 1620 Hawthorne, Ltd. vs. Montrose Management District, et al. lawsuit that dates back to 2012.

The assessments paid by the owners of real property within the geographical area known as West Montrose Management District were not voluntarily made, but were paid under duress. West Montrose Management District is ordered to reimburse the invalidly assessed and unlawfully collected assessments to those who paid them. West Montrose Management District is enjoined from spending any of the assessments that have been collected but not yet spent, or from spending any assessments that West Montrose Management District receives after the date of the signing of this Final Judgment.

As we’ve written over the years, Texas Legislature-created management districts supposedly drive positive economic change. They assess and collect taxes from commercial property owners in a gerrymandered area in order to build new bike paths, improve landscaping and go forth with “neighborhood branding.” Property owners have contested that these assessments are complete bunk and that their tax dollars need to be set aside to pay the piles of business expenses and not on cute “live, work and play” initiatives.

Now, according to Judge Moore’s ruling, it’s time for the Montrose Management District to pay back property owners. But they’re not going to, at least not yet, because on Friday, the management district filed an appeal to Houston’s 14th Court of Appeals.

The district stands by its position that it is operating within its legal charter granted by the State of Texas. No refunds for assessments collected in the West Montrose Management District (the only portion of the district under dispute in this legal action) will be made, pending the outcome of the current appeal.

On Friday, aggro property owners spouted off at Montrose Management District executive director Ben Brewer III, who held a public meeting discussing the district’s 15-year plan that includes dedicating $60 million towards street sweeping, marketing and other so-called neighborhood improvements. Andy Taylor, the attorney representing the victorious plaintiffs in the lawsuit, threatened to file a motion for contempt if the management district moved forward with its multi-million dollar strategy.

What did some of the Montrose Management District board members have to say to the business owners whose cherished tax dollars help bankroll their projects, whether that’s stainless steel signage or hand-crafted brand growth? Who knows because all 11 members no-showed.

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