07:12 AM CDT on Thursday, May 18, 2006

By Mark Greenblatt / 11 News

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How would you like to have a landlord who never raises your rent and never charges a fine when you pay late?

Sound too good to be true? The 11 News Defenders discovered it’s happening all over Houston, but you might not believe who the landlord is.

It’s something anyone who rents a home or office might not like, but is used to: getting a letter from your landlord saying they’re about to raise your rent.

But if you want to avoid any more rent hikes, we found out all you have to do is sign a lease with the City of Houston.

“If you had told me that happened and not shown me, I wouldn’t have believed it,” City Councilman Michael Berry said.

What could make Berry so upset?

Tax dollars.

“It borders on criminal that the taxpayer could be cheated that badly,” he said.

What’s he talking about? It turns out the city had been giving some people big breaks, at the taxpayers’ expense, for years.

Take the folks at Bubba’s Sports Bar and Grill. They rent a small strip of land for its parking lot from the city.

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The Defenders mapped out 70 of these low-rent locations and discovered most are near a busy highway or inside the Loop -- areas where property prices have skyrocketed over the last 20 years.

“Basically if we come over here, we’re on city land,” General Manager Care Fore said. “But if we come back over here, we’re on Bubba’s land. We pay a month-to-month fee.”

It's a fee you wouldn’t believe, for a time you won’t believe: $65 a month for 11 years straight without an increase, even though the city leased the property on a month-to-month basis.

“Nothing changes, on and on and on and on,” Fore said.

So what’s going on?

The 11 News Defenders discovered that Houston’s real estate division under the public works department has virtually ignored many of the very leases it's supposed to manage, allowing tenants to go unpunished when paying late and permitting the price they pay to remain the same for decades or longer.

So just where can you find these bargain leases?

The Defenders mapped out 70 of them and discovered most sit near a busy highway or inside the Loop -- areas where property prices have skyrocketed over the last 20 years.

For example, U.C. Motors, a used car dealership, has paid a rent of $130 a month for the last 12 years, on another month-to-month lease.

Across town, the Coastal Aluminum Screen Company has paid just $150 a month for nearly 8,000 square feet. The city has allowed them to pay the same rent for 24 years in a row.

In Midtown, the posh restaurant Brennan’s has paid $200 a month for leasing an extra parking area from the city. It’s the same price the city has allowed them to pay for 24 years as well.

In fact, the last time the city checked up on the value of the land there was in 1977. “That’s pretty extreme negligence,” Berry said.

He said he’s astonished, and believes rents should have potentially been doubled or more than tripled over the years from where they stand today.

“The rental values should have seen an exponential growth,” Berry said.

He added that each lease should have been reviewed and re-appraised, “at least annually, at the worst case every five years.”

The Defenders also showed Berry another property: one rented out to car dealer P.C. Motors. It’s in a high-profile, high-traffic area off Telephone Road.

And the last time the city checked the value there was 1966.

“I don’t even know where to begin at how disgusting that is,” Berry said. When the 11 News Defenders went looking for answers, they discovered that the city’s director of its real estate division didn’t have a lot of answers.

On four separate occasions, Nancy Collins, a manager of that division in the city’s Public Works Department, would not comment on Berry’s statements or many other questions we asked about.

11 News: “[Berry] believes you have been negligent in your duties.”

Collins: “I would say no comment, and I don’t agree.”

11 News: “Do you think your staff should be going back to check on each property?”

Collins: “I would not venture to answer that because it is a very general question.” The Defenders then asked Collins about P.C. Motors – that car dealer that her division hasn’t reviewed for 40 years?

Collins: “All I can tell you is we have a lot of responsibilities, and we focus our resources on the core mission.”

But guess what? The people at P.C. Motors are in for a shock.

The Defenders uncovered a city memo ( read document) from a senior staff member to management in the real estate division that read, “It appears the city does not own the site which has been leased since September 1, 1966.”

And worse – that memo went out in 1995.

But it still didn’t stop the city from collecting rent from the business for the last 11 years.

What did the Collins have to say about that?

Collins: “I think that’s something that warrants review.”

11 News: “Don’t you think that review should have happened a few years ago?”

Collins: “Yes I do.”

11 News: “Why didn’t it?”

Collins: “Well I can’t answer that question. I don’t have an answer.”

Houston Mayor Bill White is not pleased with what the Defenders found.

“I mean it’s unacceptable,” Mayor White said. “People ought to be paying fair market value for those leases.”

He said a new department will handle the rents from now on. Just a few months ago, the mayor hired Bob Christie, a real estate expert with 30 years of experience in the private sector.

“This is evidence why this management change I implemented already is long overdue,” Mayor White said.

White told us he will ask Christie to give him recommendations on the best way to get top dollar out of the land in question.

Regarding the bargain prices we found, like the property that had not been revalued in 40 years, White said: “Total incompetence on the city’s part. And inexcusable.”

He also told us he’d like to sell off most of those properties that have those bargain leases.

The mayor says he now plans to try and sell off, rather than rent, most of that land we just told you about, assigning that task to an expert in real estate he hired recently.

But there’s no way to know how much it’s all worth today, since only the city appraises city-owned land.

Still, we’re told a big sell-off could potentially bring in big bucks and get the land back on the tax rolls.