TIRZ boundaries rapped: Commission hears calls to include riverfront property - Brownsville Herald: Local News

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TIRZ boundaries rapped: Commission hears calls to include riverfront property

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Posted: Saturday, December 7, 2019 8:15 pm

Brownsville city commissioners on Dec. 3 took the initial step toward creating Downtown Tax Increment Reinvestment Zone (TIRZ) No. 3, meant to address serious infrastructure issues that, according to officials, are standing in the way of the area’s redevelopment and revitalization.

However, before voting unanimously to approve the TIRZ ordinance’s first reading, commissioners heard from a downtown property owner and a South Padre Island-based real estate developer that the zone should include riverfront property so that a long-planned redevelopment project can move forward.

According to a draft plan, TIRZ No. 3 as currently drawn includes roughly 440 acres of downtown and the Mitte Cultural District but excludes riverfront along Sam Perl Boulevard between the B&M and Gateway international bridges. That’s the area where California-based developer Sam Marasco has been planning a 16-acre, mixed-used, urban development dubbed “Rio Grande Esplanade,” which supporters say would have a dramatic positive effect on downtown and the city.

Marasco, who has obtained preliminary cooperation from the Department of Homeland Security and the U.S. Boundary and Water Commission for the project, maintains he’s gone about as far as he can without the city setting up a TIRZ including the properties Marasco’s company, San Diego-based Land Grant Development, would need to purchase to develop the Esplanade.

Speaking during a public hearing before TIRZ vote, Sam Manatt told commissioners he owns “most of the riverfront” in question and that his property was included in a preliminary TIRZ plan several years ago. It should also be part of the current downtown TIRZ proposal, Manatt said, pointing to a 2001 study, paid for by the city, that concluded riverfront redevelopment would be the catalyst for downtown revitalization.

“That could be the most important part of any of the downtown revitalization projects, and I think everybody understands that,” Manatt said. “So my question is why were we, the riverfront, and the other landowners excluded from this boundary?”

Mayor Trey Mendez said “the intent would certainly be ... to include that in a TIRZ at some point,” though Manatt expressed skepticism.

District 4 Commissioner Ben Neece said TIRZ No. 3, even if approved by the commission, could be redrawn at a later date to include Manatt’s property.

“One thing to keep in mind, though, is that those TIRZ boundaries can be expanded,” Neece said. “It can be a different TIRZ. It doesn’t have to be (TIRZ No. 3).”

A TIRZ is a tool Texas municipalities have available under the Texas Increment Financing Act to aid in attracting investment to neglected areas. Infrastructure and other improvements are paid for through future additional property tax revenues spurred by those improvements, which can be made by private investors or public entities.

Deputy City Manager Helen Ramirez said city staff has been working with Marasco and discussing a proposed TIRZ for the Esplanade project, which would serve as the catalyst for Marasco’s larger downtown project, “via Americas.” Marasco envisions the Kris Kristofferson Cultural & Entertainment District, a conference hotel, office and residential space as part of the larger plan.

“I would say that one TIRZ doesn’t mutually exclude the other TIRZ,” Ramirez said, adding that the city is in “constant communication” with Marasco.

“Staff is still meeting with that developer,” she said. “In fact we have a meeting this week to speak about some of the financial questions that we’ve had and some of the infrastructure questions we have.”

Marasco said the plan is for his company to pay 100 percent of the cost of improvements to city-owned public infrastructure necessary for the Esplanade and via Americas, with eventual reimbursement through the Tax Increment Financing mechanism that operates within a TIRZ.

In response to a question from Neece, Ramirez confirmed the city would not be risking anything by creating a riverfront TIRZ, even if Marasco was ultimately unable to pull off the project, and that the TIRZ could simply then be dissolved.

“What we’re saying is that we need a little bit more information and we’re trying to work with the developer, spending city resources, time, legal and financial, to be able to answer those questions and do our fiduciary responsibility as staff to the commission, saying this is the project, these are the costs associated, these are the expenditures and this is what they’re proposing,” she said.

South Padre Island real estate developer Dennis Franke, who also spoke during the public hearing, commended the city’s interest in establishing a downtown TIRZ but said it’s a “huge mistake” not to include the riverfront properties.

“I know Sam Manatt and I know Sam Marasco,” Franke said. “They’re both friends of mine, and I’ve been following (Marasco’s) project for, I don’t know, 6,8,10 years. He’s been working on it more than 10 years, and it is the most substantial project that Brownsville downtown could see any time in the future.”

Noting that he has no financial stake in the project, Franke described the current state of downtown as “pitiful” and said turning that around will require “doing something significant.” Redrawing TIRZ No. 3 wouldn’t cost the city a nickel, he said.

“I’m a real estate developer,” Franke said. “That’s all I do. You either do it in the front end and get it done right or it’ll never happen. I’m telling you, it’s hugely, hugely important that you include this property. Now, maybe he’ll never be able to build it, but maybe he will, and if he does you’re going to find something happen in Brownsville that none of you have dreamed about.”

He said Brownsville and Matamoros were once major selling points for attracting visitors to the Island, and that Brownsville could be again if the Esplanade is built.

Commissioners approved the first reading of the TIRZ No. 3 ordinance with one minor amendment. At the request of Mark Yates, representing the Cameron County Housing and Finance Corporation, the commission agreed to adjust the TIRZ boundary slightly to bring in the former Resaca Elementary School at 901 E. Filmore St.

Yates said that including the former school, decommissioned last year by the Brownsville Independent School District, would make it easier to secure a 9 percent low-income housing tax credit, sought after by a company that has proposed redeveloping it into multi-family senior housing.

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