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August 19th, 2008
Kyle council to decide next move after Sanchez court decision

Editor at Large

KYLE – The Kyle City Council will be officially appraised tonight that the city lost a lawsuit filed by downtown resident Jaime Sanchez over a disputed piece of property. The city could appeal the ruling by a Hays County jury in district court, but it’s unlikely.

The court jury ordered a judgment of $35,000 for Sanchez. Kyle reportedly spent $50,000 on legal fees, meaning the case cost the city at least $85,000.

Sanchez purchased a piece of property adjacent to his home during a tax foreclosure sale in 2003, hoping to build a sports bar and restaurant. But when he began to put up a fence, the city told him that old maps indicated the property belonged to Kyle and ordered him to stop.

Sanchez filed suit in 2005. Among Sanchez’ arguments were that the city could do no better than produce a plat from 1883 and a map from 1968, and that the city collected taxes on the property for decades before he purchased it.

Sanchez ran unsuccessfully for the Kyle City Council in 2006, while the suit was active.

The city council also is expected to set a guaranteed maximum property tax rate. After first proposing a rate of 35 cents per $100 of assessed value, the city staff began talking last week about a rate of 37.31 cents. The city presently is taxing 27.07 cents on the present budget.

The city’s effective tax rate for Fiscal Year 2008-09 is 26.73 cents. The effective rate is the rate that would raise the same amount of tax revenue as the city raised from property in FY 2008. The rollback rate is 39.28 cents, though a sales tax adjustment would bring it down to 33.29 cents.

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2 thoughts on “Kyle council to decide next move after Sanchez court decision

  1. This was a poor decision by the city manager to urge the city of Kyle to get involved in this litigation. They could have probably purchased enough property for the alley they planned for a lot less than $85,000. Now they look stupid, greedy, arbitrary, high-handed and just plain dumb. Probably won’t get to touch the property with a 10 foot pole for any reasonable sum. What a kook that city manager is. Doesn’t know how to work things out with people.

  2. Obviously, this is a peculiar and confusing story. OK, it cost the city $85,000 in judgment and attorney fees. Remember, though, Sanchez sued the city, so the city’s choices were to either defend itself or give him what he wanted. I’ve heard tell that Sanchez wanted six figures to settle at the start. Even if that means he only wanted $100,000 to settle, then the city ends up $15,000 ahead by spending $50,000 to get a $35,000 judgment for Sanchez (a total of $85,000).

    The city says Sanchez wanted $80,000 at the end. By then, the city was $40,000 into attorneys fees. That’s $120,000. The city took it through the process and ended up spending $85,000, a good $35,000 less than $120,000.

    Not saying the city was entirely right here. Obviously, the court ruled against the city. It is peculiar that the city would claim it owned land on which it collected property taxes for decades. It’s entirely possible that Kyle, lacking administrative sophistication for decades, simply didn’t know what it was doing.

    Yes, the city and Sanchez should have worked something out. But if Sanchez wanted, at minimum, $80,000 to settle at the start, then the city spent $85,000 to fight and it only ends up as a $5,000 loss for the city. No big deal. The payoff for the city, with a legal victory, would have been a piece of land worth well more than $85,000. And if Sanchez actually wanted $100,000 or more, then the city actually saved at least $15,000 by fighting in court.

    The city didn’t actually get the land it claimed to own, but that story is not finished. You’d better believe that if Sanchez wants to open his sports bar and he wants anything at all that’s out of the code, the slightest variance or concession, the city will twist his arm for that street right of way. If he wants something from the city, the city will want something from him, and we can guess what the city will want.

    So, in the end, nobody really wins, except the attorneys who billed tens of thousands of dollars on both sides. By the way, the Kyle City Council met in executive session last night to hear the outcome officially from the city attorneys. Later, the council reconvened and took no action. There will be no appeal.

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