DALLAS - A central Texas county is asking the state for a ruling on the property tax exemption of bond-financed dormitory complexes being built and operated as public-private partnerships at Texas A&M University.
Brazos County, which encompasses the main Texas A&M campus at College Station, wants Texas Attorney General Ken Paxton to determine if the White Creek and ACC South College student housing complexes are exempt from county property taxes.
"These projects will be in competition with private housing projects that do not enjoy tax-exempt status, and when those private projects compete against tax-exempt projects they are at a competitive disadvantage," Brazos County Attorney Rodney Anderson said in his Aug. 26
The lease stipulations that limit tenants to students, staff, or faculty seem to resolve the public use requirement for exemption from county taxes but the public ownership of the dormitories is questionable, Anderson said in his letter.
The long-term agreement may remove public ownership of the property because it gives the developer legal title to any improvements on the site, Anderson said.
The student housing corporation that is acting as the private partner in the arrangement is not part of the state of Texas nor is it a political subdivision of the state, he said.
"The issues suggested by this letter are important for Brazos County Appraisal District to be able to correctly administer the exemption requests, not only for the two projects, but for other projects that may be constructed in the future," Anderson said.
Texas A&M officials contend that the dormitory projects serve a public purpose that is directly linked to the university's mission.
"The concerns of local officials and local apartment owners are misplaced," said Ray Bonilla, the university's general counsel. "The new projects are exempt from property taxes because they serve a public purpose, like the Corps of Cadets dorms and other dorms on the university campus."
The White Creek and ACC South College are part of the five P3 housing efforts that will provide a total of $900 million for Texas A&M University over the useful life of the projects, said university president Michael Young.
The university's board of regents mandated in 2013 that the system consider P3 arrangements for funding and building dorms and other non-academic facilities.
A&M Chancellor John Sharp said the money from P3s reduces the funding needed from student tuition and taxpayers.
