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This request concerns resolution of an inverse condemnation lawsuit. In 2007, the City of Houston purchased 2.3 acres of real property located at 7277 Regency Square (“Property”). The Property is currently being used as the Houston Police Department’s Midwest Station. The deed to the Property includes an obligation to pay certain semiannual assessments to Plaintiff Regency Square Improvement Association for the maintenance and upkeep of common areas with other property owners in the business district. This obligation was included in the original deed documents when the business district was originally developed in 1977.
The City did not pay the assessments when it purchased the property in 2007, or at any subsequent years, prompting the filing of a lawsuit styled Regency Square Improvement Association v. City of Houston, a Municipal Corporation Situated in Harris, Fort Bend and Montgomery Counties, Texas; Cause No. 2014-11660, in the 295th Judicial District Court of Harris County, Texas. The City is not immune from lawsuits seeking to compel payment of deed assessments that run with the land. To refuse to do so is akin to a “taking” of a property right. The measure of damages is the monetary value of the right to assess maintenance fees for the duration of the City’s ownership of the Property.
This case was conditionally settled at mediation for $73,000, subject to council approval. Based on historical assessments and future forecasts, $73,000 is a fair and reasonable valuation of the assessment rights, both past and future. The proposed settlement would forever extinguish the City’s obligation to pay the assessments on the Property.
After a thorough review, the Legal Department recommends that Council approve the Compromise and Settlement Agreement and issuance of warrant payable as follows:
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