What you need to know about the legal battle waged in Montrose

HOUSTON – A recent judge’s ruling dealt a blow to the Montrose Management District. The issue was whether the district was lawfully collecting assessments from commercial property owners on the west side of Montrose.

Here are some frequently asked questions about the situation:

What is the Montrose Management District?

This is one of several management districts created by the state legislature to promote economic development in specific areas of town. Typically, these districts assess a fee on commercial property owners and then use the money for beautification projects, clean-up projects, security and other economic development projects.

Why is this district being sued?

In 2011, the district was required to get at least 25 signatures from commercial property owners on a petition that would allow it to collect an assessment on business properties in this area. Houston attorney Andy Taylor represents several property owners on the west side of Montrose. He argued the district did not gain enough valid signatures to begin lawfully collecting this assessment. Taylor said the district was collecting 12 and-a-half cents for every $100 of valuation on commercial properties.

“It’s literally taxation without representation,” Taylor said.

Recently, a judge ruled the district “illegally collected $6,589,092.70, based upon the 2011 Assessment Petition, which is void.” The judge also ruled this money must be paid back and the district can no longer collect assessments or spend any money collected from assessments not yet spent. You can read the final order here.

File: Final Judgment Montrose District

How Did The District Respond To The Ruling?

The district immediately appealed the order to the 14th Court of Appeals. A statement on its website reads, “The Montrose Management District is disappointed in the October 31, 2017 ruling by Judge Moore and on November 2, 2017, immediately appealed the decision to the Fourteenth Court of Appeals in Houston. In that court, the district has prevailed in every previous motion related to filings pursued by this plaintiff’s attorney. 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.

The district’s executive director, Ben Brewer, issued a second statement to KPRC. “There is a tremendous amount of misinformation being floated around on this complex issue. As one of 53 management districts established around the City of Houston, the Montrose Management District has been performing its state-granted purpose to enhance the economic well-being of this neighborhood for the last 10 years. While we acknowledge there are critics of the District, we also have support from many commercial property and business owners who understand all that the Montrose Management District does.”

What’s Next?

In addition to the district’s appeal of the judge’s ruling, Taylor has filed a separate legal action to have the district dissolved.

“There’s no question the citizens want to kill this district,” said Taylor.

Taylor said he has garnered enough signatures from the area’s owners and residents to have the district dissolved under state law. However, Taylor said district officials are contesting many of the signatures on the petition and this matter is pending before the court.

“They have evolved into bureaucratic cash registers and that is the problem,” said Daphne Scarbrough, owner of The Brass Maiden on Richmond.