CONSTRUCTION BEGINS IN TIRZ 13, THE LARGEST CORPORATE HANDOUT IN EL PASO HISTORY

by Max Grossman

Vic Kolenc of the El Paso Times and the Staff of the El Paso Inc have both published reports announcing that Paul Foster and his business partner Lane Scarborough have begun Phase 1 of their development in Northeast El Paso, which includes the construction of 338 single-family homes.

There will eventually be approximately 9,500 homes and multifamily units built within the huge 2,313-acre area, which Foster acquired in a controversial trade with the City for 44 acres he had owned in West El Paso.

The plan was for a Chicago-based corporation called Great Wolf Resorts to build a waterpark hotel on the 44-acre lot.

On November 13, 2018, Rep. Cassandra Hernandez asked City Attorney Karla Nieman point blank whether the 2,313-acre land swap with Paul Foster would proceed if Great Wolf Lodge pulled out of the deal to build its resort.

Nieman declared that the land swap could not proceed and that the contract with the City would prevent it from proceeding.

On October 28, 2019 our City Council voted 7-1 to provide Great Wolf Lodge with massive incentives at taxpayer expense to build a waterpark resort on the 44-acre lot. The City agreed to provide a 100% property tax rebate and a 100% city sales tax rebate for 15 years, a 50% hotel occupancy tax rebate for 15 years, $520,000 in TIRZ-funded infrastructure improvements, and a $5M development grant from El Paso Water. Among the contractual provisions was this winner: If the State failed to provide $40 million in tax incentives for the project, El Pasoans would pay for it themselves through the franchise fee on their electric bills over a ten-year period.

On March 17, 2020, City Council voted to extend the incentives for Tax Increment Reinvestment Zone 13 (TIRZ 13), which encompasses the 2,313 acres owned by Foster. Whereas previously, investors in TIRZ 13 enjoyed a 30% break on City property tax, the incentive was increased so as to forgive 75% of all City property tax within TIRZ 13 until the year 2070!

This will deprive El Paso’s taxing entities of hundreds of millions of dollars in revenue over the life of the TIRZ.

It is the most generous act of corporate welfare in El Paso history.

Meanwhile, El Paso property owners who are not billionaires will have to pay 100% of their property tax for the rest of their lives.

Less than one month later, on April 10, 2020, it was announced that Great Wolf Lodge pulled out of the deal, but the land swap went forward anyway, in spite of Nieman’s promise, and Foster got his 2,313 acres and the incentive package that went along with it!

Initiatives like TIRZ 13 are why homeowners bear so much of the property tax burden in El Paso and are already suffering from one of the highest property taxes in Texas.

Frankly, we should be asking ourselves where the thousands of residents of the future TIRZ 13 development are going to come from.

According to the latest federal census data, the population of the City of El Paso has been declining steadily since 2017, from a peak of more than 683,000 to around 678,000 today.

It is obvious that incentivized projects in open spaces around the edge of our City, like TIRZ 13, will accelerate the depopulation of our City’s urban core in favor of endless sprawl, longer commutes, and additional infrastructure expenditures. In addition, they will continue to degrade our urban schools, which have been closing at an alarming rate.

Here is a modest proposal:

Developers should pay for their own developments and assume all the capital risk and pay 100% their property tax, just like I purchased my own home, assumed all the risk, and pay 100% of my property tax.

That is how things are supposed to work in a constitutional republic under the rule of law.

Reps. Cassandra Hernandez, Isabel Salcido, and Henry Rivera should be held to account for voting for the largest corporate handout in El Paso history, and Karla Nieman should be held responsible for her dishonesty.

According to Section 14.A (6)(e) of her contract, Karla Nieman may be fired for “knowing misrepresentation of material facts to the City or other City officials in the conduct of the City’s business.”

Incredibly, Karla Nieman is still our City attorney.