Huge developer decides who pays taxes and who gets to vote in Montgomery County

• Subservient district accommodates questionable transactions

• District forgets to collect property taxes on numerous valuable properties

• Developer mandates expulsion of 250 voters; County Judge acquiesces

• Checks and balances are hard to find in elite government agency

Activists who warned about a rogue government years ago are now seeing their concerns realized.

It was long said that The Woodlands Road Utility District #1 (RUD) was improperly controlled by developer interests. At that time, a handpicked, appointed board acted as a rubber stamp, approving projects and spending with no voter oversight, having skipped 15 election cycles. Then known as The Woodlands Development Company (now Howard Hughes Corp.), the developer addressed the presence of voters by tearing down residences or through de-annexation, as with Riva Row. In most cases, the presence of voters was disavowed or ignored.  ¹ The few who raised concerns pointed to the establishment of taxation without representation on commercial property owners as intrinsically unconstitutional.

Recent revelations indicate that little has changed. Multiple longstanding property tax irregularities, developer-driven de-annexation, and mass expulsion of voters have emerged—much of it confirmed by Howard Hughes’ own corporate communications.

Irregularities first surfaced with the discovery of more than 250 registered voters at a single address  within the district and the City of Shenandoah, at 8900 Six Pines, site of the upscale MODERA ²  Six Pines apartments.   ³ Normally, voter presence would not be notable, except that the District has alternately asserted that either no voters exist or only those granted special deeds are eligible.   ⁴ Remarkably, the RUD may be the only government in Texas history to announce on its website: “Pursuant to Texas election law, a person must live within the District’s geographical boundaries in order to vote in its elections.”  ⁵ yet given their willingness to acquiesce to developer demands to stamp out a foundational element of  the American System, i.e. consent of the governed , it’s just  not that surprising.

Despite the district’s stated purpose—“to acquire, construct, and improve roads and related drainage works inside or outside of its boundaries”—the RUD appears to spend an inordinate amount of time and effort on legal maneuvers, swapping parcels of land in and out of the district via Texas Water Code annexation rules, apparently at the developer’s command. This amounts to the “MONOPOLY-LIKE CONTROL” Howard Hughes Corp once boasted in an INVESTMENT pitch deck. These parcel swaps offer little apparent value to the district’s mission and have cost the district hundreds of thousands of dollars, potentially millions, in uncollected property taxes that are not easily recoverable.

Expelling Voters

Howard Hughes’ control over who votes has been confirmed in the most convincing way. Valerie Qualls,  ⁶  Senior Vice President for Capital Markets at Howard Hughes, explained:

“The goal has always been to burden the commercial properties with this tax versus the residential properties. This was in part because of monetary reasons and in part because we didn’t want to rely on thousands of individual voters to get a project approved. So when land was sold for residential uses, we would de-annex it, if it was ever annexed in the first place.”

This goal contradicts previous actions, such as granting a billionaire friend special permission to live within district boundaries.  ⁷ However, the RUD’s plans hit a snag:

“But we missed one. There is a multifamily project that is currently part of RUD #1. We need to de-annex it. But the RUD issued bonds to cover some of the projects. The bond indentures do not allow for removal of ‘collateral’ without replacement collateral of equal value.”

Qualls’ letter, obtained through open records, describes a six-property annexation swap devised by Howard Hughes to eject 8900 Six Pines and its voters. However, because the RUD had encumbered the property in a bond sale, they must substitute property of equal or greater assessed value.

Emails from the RUD reveal numerous delays and bureaucratic snafus have hindered completion—perhaps permanently.

TAXES? We Decide

Qualls further explained the maneuver:

“Hence, our request for lender’s consent to annex One Hughes Landing into RUD #1. The most recent assessment notice indicates a value of $33,250,160. Although we may contest the new assessment, using the proposed value, annexing One Hughes Landing into the RUD would add $40,432.19 of annual operating expense (which should be recoverable from tenants subject to their leases).”

This is all well and good if you are the taxpayer on both ends of the deal. The trouble is, there are six different taxpayers or groups of lease tenants who will be burdened with taxes for a district they are not currently part of if the plan goes forward. One set of taxpayers is released, and another set is burdened, all based on Howard Hughes’ maneuvers to maintain a voter-free RUD.

Taxes Omitted

The situation worsened when it was revealed that the RUD was not collecting any property tax on the apartment building at 8900 Six Pines—and hadn’t since the land transferred to new owners in 2020. The 2024 assessed value of 8900 Six Pines was $80,000,000 and has just received an assessed value of $111,000,000.

After notification, the Montgomery Central Appraisal District (MCAD) investigated. Chief Appraiser Sherry Hunter wrote:

“We have identified 41 properties that will need to be corrected for the prior years, to show the inclusion of The Woodlands Road Utility District No. 1. It was explained through their research, several of the original tracts of land were split out (separated) into new accounts between 2004 and 2012, and the taxing unit was inadvertently left off during the creation of the new accounts.”

The count was later revised to 39. Of these, more than half are low-value strips or ditches, but 19 are longstanding properties—banks, restaurants, doctor’s offices, a medical building, and the large apartment complex (with a 2025 assessed value of $111,000,000). Together, they account for over $200 million in assessed value on which the RUD has not collected taxes for years.

At a time when property taxes are spiraling, it is unjust to favor one commercial owner or tenant group over another. It is plainly wrong for elected officials and the County Judge to accommodate such practices.

Legislative Attempts at Reform

A 2013 cleanup bill (HB 3895) ⁸ placed the County Judge on the board and the district under the Texas Transportation Code, but meaningful controls like financial supervision and independent audits were removed. The bill reads:

“If any provision of general law is in conflict or inconsistent with this Act, this Act prevails. A provision of Chapter 441, Transportation Code, granting the Texas Transportation Commission jurisdiction over road utility district activities or projects does not apply to the district.”

Constitutional Issues

The district is not a republican form of government. The Texas Constitution states that all political power is inherent in the people, and government is instituted for their benefit. The explicit goal of avoiding “thousands of individual voters” shows an intent to limit public participation, especially from residential property owners.

De-annexing residential land to exclude it from the tax base and decision-making process circumvents resident involvement in local governance. This is misaligned with the Texas Constitution’s mandate for representative government and equal rights.

The Mystery of the Missing Properties

How 39 properties were omitted from district tax rolls remains a mystery, likely requiring a forensic accountant to solve. The estimated omitted tax collections are approximately $247,462.36. MCAD can legally claw back five years of taxes, but the total overlooked may approach $1 million. Recovering taxes for up to 20 years exceeds MCAD’s authority. See list here >  ⁹

The Need for Oversite

James Madison, in Federalist #51, wrote:

“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

“A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.”

These words underscore the importance of robust checks and balances and the essential role of voters in holding government accountable—principles that are at the heart of the concerns raised about the district’s governance.

Voters are the point of the spear when it comes to auxiliary precautions. The County Judge, Mark Keough, was petitioned long ago about the district’s tolerance for voters. He never directly replied. The closest response came from Chief of Staff Millsaps, who stated, “We are monitoring the situation.” That monitor, however, has failed.

Ironies and Next Steps

Ironically, the Board Chair who failed to collect taxes is Nelda Blair, a member of the largest government tax collection firm in Texas. The Vice Chair is Alex Sutton, former head of the developer.

Thanks to MCAD, the district will begin collecting property tax in 2025, and the Chief Appraiser will claw back the last five years by law. There will be protests. If the transfer proceeds, dozens of tenants in Hughes Landing and Creekside will be burdened with someone else’s taxes because Howard Hughes said so.

Article 2 of the Texas Constitution calls for separation of government powers. Here, an Executive magistrate is operating unconstitutionally. Judicial magistrate  intervention is needed.