No Property Taxes for Private Restaurant Built on Public Land

Should a private business that sits on public land have to pay property taxes? That's the question Chef Tim Love, the man behind some of Fort Worth's most popular restaurants, recently had to face.

The debate stems from his Woodshed Smokehouse, on the banks of the Trinity River near downtown Fort Worth.

The Woodshed is a public-private partnership. It sits on public land, owned by the Tarrant Regional Water District (TRWD), the agency responsible for Trinity River flood control and recreation.

Because of that, the TRWD and Love always thought they were tax-exempt. But for the first time in four years of business, this year, the tax bill came as the Tarrant Appraisal District challenged the restaurant's tax-exempt status.

Chief Appraiser Jeff Law sent NBC 5 this statement: "The Texas Property Tax Code states that property owned by the state or a political subdivision of the state is exempt from taxation only if it is used for a public purpose. Property owned by the state or a political subdivision of the state that is not used for a public purpose is taxable."

The Appraisal District didn't think the restaurant qualified.

One diner at the restaurant Thursday afternoon agreed.

"We all have to pay that," said Elizabeth Abrahams. "If it's on public land, they should be paying for the slice of public land that they're using."

Love did pay the tax bill, then challenged it in court, and a judge recently sided with him: public land, no property tax.

"I own a bunch of properties in Fort Worth and suffer from the same tax hikes as everybody else," Love said. "I'm gonna do exactly as the lease says and I'm going to do exactly as the law says."

And the Woodshed is a work of love for the chef, who grew up visiting the river on the spot where his restaurant now sits.

"I'm very invested in what the river is and can be and always have been – way before Woodshed existed, all the way back to riding paddle boats when I was 6 years old," said Love. "I feel like maybe TRWD made the right choice by developing that one piece of property and showing, 'Hey, look how great the river can be.'"

The TRWD paid $1.1 million to build the shell of the Woodshed. Because business has been good, they now expect to recoup those costs a year early.

The restaurant pays 4 to 6 percent of its revenues to the district in rent. That is money that goes back into flood protection and trail upkeep.

And you don't even have to pay for a bite, if you want to sit on the patio after a run or bike ride on the trail out front.

"We have a concert there every night that's free, we don't ever charge a cover,” said Love. "We give away water and Gatorade to walkers and bikers."