Scarbrough Building narrowly avoids losing tax relief status

The historic Scarbrough Building had a close call with its tax abatement status when the Historic Landmark Commission voted unanimously at its April 27 meeting to remove its eligibility status.

When the Velvet Taco restaurant opened a new outdoor seating area, workers removed three panes of glass from the bottom floor of the historic Scarbrough Building – without first asking the city’s permission. In an effort to retain the new seating area, the downtown restaurant belatedly sought a certificate of appropriateness from the Historic Landmark Commission, in hopes of maintaining the design.

However, with unanimous input from the landmark commission that the windows needed to be immediately replaced, a denial of the request for a certificate of appropriateness and the building’s tax abatement status on the line, Historic Preservation Officer Steve Sadowsky told the Austin Monitor that the restaurant was responsive. He said the glass was reinstalled on April 30. “So they were true to their word and are eligible for the tax exemption,” he said.

The property at 522 Congress Avenue was valued at $55,362,385 for 2019. Without a tax exemption, property tax is $1.2 million rather than $812,680.

The glass reinstallation came one day before the Planning and Zoning Department finalized its list of historic properties earning tax abatement status. Approval of historically designated properties eligible for tax relief occurs in April and the final list is submitted to the county on April 30.

Sadowsky confirmed to the landmark commission that the restaurant did not seek approval for this modification. He said that staff would have administratively opposed the request to remove the glass if a proper application had been submitted.

As part of the retroactive submission to retain the outdoor seating area, the restaurant group indicated that the expense to reinstall the glass would be a financial undertaking that they would rather avoid. In an email sent to Planning and Zoning staff, Velvet Taco management said, “We are currently not in a position, with the state of the restaurant industry we would prefer not to spend the money to put the glass back in, prior to getting the answer from the Historic Landmark Commission.”

Commissioners clarified that the removal of tax-exempt status was a tactic to motivate the restoration of the building to a state of historic compliance. City staff, the Historic Landmark Commission and the Travis County Historical Commission all agreed that the building needs to have the integrity of its exterior protected, as the first steel-framed high-rise and the first air-conditioned retail building in Austin.

“This is a very important property and we should keep it in the program,” Commissioner Ben Heimsath said.

Commissioners Alex Papavasiliou and Mathew Jacob were absent.

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