Deal to build tower on church land benefits city and county

A recently finalized deal to build an office tower in a church's parking lot could add more than $1 million in tax revenue to local coffers.

Earlier this month, Houston's First Baptist Church said it plans to lease its nearly 4-acre parking lot to the Hines development firm. Hines has proposed constructing an office building and parking garage on the now tax-exempt parcel located along a busy stretch of Interstate 10 near the West Loop, converting the property into commercial use.

The parcel would then become subject to city, county, school and related taxes for the first time in decades. Harris County Appraisal District Chief Appraiser Jim Robinson said that's a rather unusual occurrence.

"Normally, once a property goes exempt for a church it usually stays exempt," Robinson said.

The amount of taxes owed would depend on the new building's value.

The cost to erect a high-rise office structure, similar in size to what Hines has proposed, ranges from $100 to $120 per square foot, according to a construction cost report from Kirksey Architecture.

At a 3 percent tax rate, that could amount to a tax bill of at least $1.2 million just for the office building. The 1,500-car parking garage, which likely would be taxed as well, would generate an additional amount.

As a nonprofit organization, First Baptist still would be exempt from paying taxes on real- estate income generated by the deal, church spokesman Steven Murray noted.

Under the terms, Hines would lease the land from the church for at least 99 years. The church did not disclose the value of the lease.

First Baptist has cited a lack of parking as the impetus for the arrangement.

More here:
Deal to build tower on church land benefits city and county