Lone Star College System announced at the end of last month that an internal review of operations at LSC-University Park revealed the system had not paid taxes on commercial rental properties as required by law.

According to Mike Sullivan, Harris County tax assessor-collector, Lone Star College System owed more than $2 million. He said LSCS officials were proactive in getting the issue resolved.

"This is good news for taxpayers,” Sullivan said in a press release. “Chancellor Head is handling this professionally and expeditiously.”

Sullivan said the county is working closely with the college to “triple-check” the numbers and execute a plan to get that money back to taxpayers. He said he was appreciative when LSC self-reported the oversight.

“This is money that is going back to the taxpayers as it was generated through auxiliary operations not associated with tax dollars,” said Amos McDonald, LSCS vice chancellor of government and public relations. “School districts in the LSC area will receive their portion of the tax dollars being repaid as well.”

The complex at University Park was purchased in 2008 and includes a college, a number of system office departments and employees, a university center and a commercial lease component.

The portion used for educational purposes is tax-exempt, but the commercial lease component, part of an effort to diversify revenue sources, is taxable. LSC purchased more than 1 million square feet and will lease out available space until that campus site reaches its maximum enrollment potential—estimated to be 18,000-20,000 students—over a 10-year period.

“The amount is significant and we acknowledge an inadvertent error in our internal accounting and management oversight,” LSC Chancellor Steve Head said in a statement.

LSC is reviewing its internal processes, McDonald said.