The City of Houston has requested that one-third of all increment (or revenue) from the Lake Houston Redevelopment Authority/Tax Increment Reinvestment Zone 10 (TIRZ) be given voluntarily back to the city. Preliminary figures show that amount would range from $63 million to $114 million.
City Councilmember Dave Martin said at the Nov. 15 meeting that it was just two weeks earlier when the city stunned him and the TIRZ board with information that the TIRZ would be expected to “give” money back to the city beginning in the summer of 2019.
Martin likened the request to a hard-ball gambit of the city. The TIRZ wants to build an $80 million Northpark Drive improvement project and can’t borrow money without an extension to the life of the TIRZ (set to end in 2028.) Discussion focused on the fact that the city would not extend the TIRZ life unless the TIRZ agrees to surrender one-third of all its revenue. The city wants the money for affordable housing.
“When I saw the proposal two weeks ago, I was ready to explode. We get zero, zero dollars for the capital improvement plan from the city. If we don’t get the 20-year extension to the TIRZ, we won’t be able to do any projects – not the Northpark Drive project, or Kingwood Drive, nothing,” he said.
Martin also said the city enacted a municipal services fee last year on top of an existing municipal services charge; essentially the city charges the costs of police protection back to the TIRZ.
Boardmember Jeff Nielsen pointed out that affordable housing has typically been funded through Community Development Block Grant programs and HUD.
“Why are we being asked for affordable housing?’ Nielsen said. Boardmember Kim Brusatori said the city was being “totally unfair.” Others questioned whether the TIRZ can move forward with any projects and whether the city is bound to use the money for housing, and not, for example, funding the Houston Fire Department’s recent pay raise.
Martin pointed out that there are two types of TIRZ structures – petition and non-petition. All petition TIRZ programs are required to give one-third to affordable housing but non-petition TIRZs, of which the Lake Houston one is, does not. The city is asking for the money to be given “voluntarily.”
A financial expert was present at the meeting who explained four scenarios she had prepared: one with the money given to the city starting next summer, one without the money being given, and two with graduated steps leading to the money being given back over a period of years. Martin said he suggested discussing a “feathered” approach where three percent would be given back, with six the next year, then nine percent, etc. beginning the year after the TIRZ life is extended and the money has been obtained for the Northpark project.
Martin expressed frustration and disbelief that other areas in the city get far more in city dollars than Kingwood or Clear Lake, Martin’s other large area of representation.
“I am not interested in agreeing to refunding the money unless we have the extension,” he said.
Jennifer Curley, representing the city, defended the criticisms, saying the city has been behind the Northpark project “since Day One.” She went on to say that using the numbers presented by the financial expert, Phase 1 of Northpark could easily be funded with several million left over to go toward Phase 2.
“If you look at the feathering-in scenario, the project fund balance is $29 million. Add that to the $15 million the mayor transferred from the Kingwood Drive project to the Northpark project. That is $44 million. Phase 1 is estimated to be $32 million,” she said.
Curley also pointed out that the financial analysis is essentially flat, not allowing for growth in the TIRZ, which over the last five years (before Hurricane Harvey) has been 12 percent.
In fact, TIRZ restructuring has been in the city’s plans since Turner was elected His transition team issued a report in 2016 detailing plans to require all non-petition TIRZs to spend one-third on affordable housing within their boundaries or to give that amount to the city. In 2017, the Baker Institute issued a report called “Rising Together” that also identified TIRZ recommendations.
Martin said he and TIRZ Chairman Stan Sarman will be meeting with city officials in a few days and will notify the board with further developments.
Rachel Ray-Welsh, engineer for Walter P. Moore, reported that two small mobility projects in Kingwood are about to be completed with two more ramping up.
All involve turn lanes and signal improvements. The intersection at West Lake Houston Parkway and Northpark and a second at West Lake Houston and Kings Crossing are waiting on minor adjustments. Kingwood Drive at Woodland Hills and Kingwood Drive at Willow Terrace are in the beginning stages of improvement.
Allen Brown, a resident, spoke to the board, demanding that they stop “handing out” money to area developers. Despite the fact that the developers take all the risk when creating projects and spend their own money on city-provided services like roads, drainage, sewer and other infrastructure, Brown feels they should not be reimbursed. He stated that Martin is responsible for the unsafe conditions in Kingwood.
“Kingwood is not safe. If something happens in the back of Kingwood, people can die waiting in traffic. We have no money for the Northpark project. We have no projects being done. How can you give money to these millionaires?” he said.
TIRZ will meet again Dec. 13 at 8 a.m. at the Kingwood Community Center and the meeting is open to the public.