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In Fruitvale, there’s a cluster of auto businesses—a radiator shop, a muffler place, a junkyard—all on neighboring properties owned by the same landlord, a company based out of the Central Valley. Like all property owners, the company is supposed to pay taxes on each parcel to help fund city, county, and school services.
But the landlord, AECO Management Enterprises, has never received a tax bill for one of those properties, a large lot with parked cars and sheds on it. Why not? Since 1982, the site has been incorrectly listed in county records as a public agency, which would exempt it from paying property taxes. (The company has paid taxes on the other properties in the cluster.)
For decades, the erroneous designation went unnoticed, losing the county likely tens of thousands of dollars in tax revenue—until a local resident decided to go digging last week.
His discovery, which he shared on Twitter, raises questions about how many other property owners have skipped paying taxes for years because of a lack of oversight.
Jeff Baker, a longtime Oakland resident who recently moved to Berkeley, saw a suggestion on Twitter last week that local cities dealing with major budget gaps could lease public property to developers to bring in more revenue. “I was surprised by the claim that the city of Oakland had that much property that could be developed,” Baker said in an interview Tuesday. He decided to find out just how many under-utilized public parcels were out there.
At home on his computer, Baker pulled up maps he’s compiled from public data provided by the Alameda County Assessor’s Office, including information about each parcel. He zoomed in on an E. 15th Street lot filled with parked cars. The lot was coded as an “exempt public agency,” but when Baker looked up its mailing address, he noticed the E. 15th Street lot’s mail went to an adjacent auto body shop on International Boulevard. The mailing address for that body shop? A P.O. box shared with another body shop in Berkeley.
Looking at the state’s businesses directory, the county’s database of deeds, and other public records, Baker determined that the same company, AECO Management Enterprises, seemingly also called Automotive Engineering Company, owned all the properties in question, as well as the other car-related businesses at that Fruitvale site.
“So what do we have?” Baker wrote in his Twitter thread last week. “A little auto repair landlord empire in Oakland, where the same owner holds five adjacent parcels, but one of them fell right through the cracks of the assessor’s system decades ago. Not a big conspiracy, just failure to manage government affairs.”
By posting his sleuthing online, Baker thought he was calling attention to a case study in what could be a broader trend of negligence, but he didn’t expect anything to change immediately. To his surprise, the Assessor’s Office itself chimed in on the social media site Monday.
“Thank you for letting us know about the issue. We corrected the records and an assessment will be made shortly along with property tax bills issued to the property owner,” posted the office’s official Twitter account in response to Baker’s thread.
The tax code allows the office to send an owner four years’ worth of back bills, Alameda County Assessor Phong La told The Oakandside in a phone interview Tuesday. “Obviously, going forward he’ll get a tax bill.”
La said the parcel was surplus county property when it was sold to a private owner in 1982. Only one person who was working in the office at the time is still there, said La, who was elected in 2018.
“We had to guess at what went wrong,” said La, who suspects that someone entering data into the system saw the company name “AECO” and misread it as ALCO, the abbreviation for county-owned buildings. “ABCO Auto Electric” is also painted on another building next to the site.
The Oaklandside called a Lodi phone number listed in connection with AECO Management Enterprise’s principal officer several times this week, and always encountered a busy signal.
So how many other privately owned Oakland properties have similarly sat untaxed for decades on end? La said his deputy assessor, who’s been at the office longer than him, has never seen another instance of a parcel incorrectly listed as a government property, so he expects this case was a fluke. He said the county will work to make sure a similar mistake doesn’t happen again.
But the office might not realize there are other sites in this position, since there aren’t regular reviews of tax-exempt properties.
“We don’t have the staff to go back and audit,” La said. “The only time in which there’s a check is when there’s a change of ownership or transfer of property.” There are other areas that La wishes the county could investigate. For example, when businesses change ownership, the sale should trigger a reassessment, but often entities like LLCs change owners but don’t report the swap, La said.
The lack of audits enable problems at individual properties to continue indefinitely, Baker said. (“How many people would be honest and say, ‘Hey, send me a bill,’” La acknowledged.)
In this case, Baker’s “good research” prompted the agency to study the AECO properties. The assessor confirmed that one was inaccurately coded, while the others have been paying the correct taxes. “I appreciate that he’s doing that type of work,” said La, who said he’s always open to suggestions for improving assessment systems and records.
Baker, who’s involved with YIMBY pro-housing-development activism, said the abundance of data available online these days allows policy buffs like him to investigate on their own. But he suspects the county could dedicate more resources to scrutinizing their own records, too.
To the untrained eye, it can be easy to misinterpret data, and not everything that looks scandalous to an amatuer sleuther turns out to be an issue, Baker noted. He recalled a fellow YIMBY organizer who was once in an uproar over several Oakland houses that appeared to have miniscule property assessments, around $5. It turned out these properties were technically right on the Berkeley-Oakland border, and simply were paying almost all of their taxes in the other city.
While it’s unrealistic to expect property records to be “perfect,” Baker said accurate tax coding “seems like a thing governments of cities and counties have an interest in chasing down.”
He was impressed by the county on one front, though: “That’s great that they’re just trolling around on social media, defending their reputation,” he said.