Frustration, over mixed signals from the City of Houston and from the emotional ravages of Hurricane Harvey, was in the air at the recent TIRZ meeting which spilled into a second concurrent meeting about flooded homes and the need to have elected officials step up to help.

The December Lake Houston Redevelopment Authority/Tax Increment Reinvestment Zone 10 meeting was uncharacteristically crowded with several dozen upset residents who wanted to discuss the flooding after the hurricane.

Once they realized the TIRZ meeting was not the correct venue, they left to meet in another room, led by Houston City Council Member Dave Martin.

The mundane TIRZ agenda proceeded with a report on the required investment policy mandated by the City of Houston and an update, on the Kings Crossing and Northpark turning lane projects, that most work is waiting for street light realignment, a gas line to be moved or trees to be trimmed.

But the board was taken aback when Chairman Stan Sarman informed them the City of Houston had thrown the TIRZ a curve ball, three in fact.

“We met with Andy [Icken, chief development officer for Houston] to talk about the critical element here, which is getting the extension ordinance in front of the city council so we can sell bonds, so we have the money for the project,” Sarman said. But Icken had changes to what the TIRZ thought were already agreed-upon parameters.

Extension of the TIRZ life

The Northpark Expansion Project, that includes an overpass over U.S. Hwy. 59 and expanded lanes east past Russell Palmer Road, had an about-face moment earlier in the week after Sarman, and the TIRZ manager, Ralph Deleon, met with Icken.

The TIRZ was created in December of 1997 and originally scheduled to terminate in 2027. The proposed new termination date had been Dec. 31, 2053, or a 26-year extension. But at the meeting, Icken shortened it to 2048 (proposed) with no explanation, Deleon said. 

Sarman and Deleon thought they had an agreement for 26 years, allowing them to acquire enough money for the project and time to pay it back.
In order to pay for the $50-plus million project, the TIRZ will need to issue bonds. In order to borrow enough money, the ‘life’ of the TIRZ must be extended.

“There is not enough life left in the TIRZ to be able to get enough money from bonds,” said Tim Austin, attorney for the TIRZ.

Sarman and the board thought they had an agreement with the City for the longer extension, which would facilitate an affordable bond with many years to pay for it. But the men were told otherwise.

“We lost that battle,” Deleon said. “We walked away taking two bites of the apple.”

Changes to proposed annexation area

The TIRZ receives funds, or increments, from properties inside its designated area. The TIRZ boundaries have been extended, as areas of Kingwood were “annexed” into the TIRZ, over the years.

Part of the calculation of how much money the TIRZ will have to fund the project, and others, is based on the increment. The more revenue-generating areas in the TIRZ, the more the increment and the less money needed to be borrowed.

In recent months, maps of proposed areas to be annexed were discussed by the TIRZ board. Changes were made as the City requested areas to be added or subtracted.

Sarman said Icken, at the recent meeting, asked for areas to be taken out that he originally asked to be put in, thus decreasing the potential increment.

Budget impacted

Once the proposed annexation areas were changed, and the new life shortened by five years, that threw the TIRZ overall budget into disarray.

“We are re-running all the financials to see how much we can afford under the now-suggested 21-year extension,” said Deleon, adding that the effects of Hurricane Harvey would negatively impact the value of the increment taken in by the TIRZ.

“Andy said we have to redo the budget. Once we get our new numbers, we will see what we can afford,” Deleon said.

While the City has agreed to transfer $15 million, originally designated to repair Kingwood Drive, to the Northpark project, that money will not be available until 2020.

Board member Kim Brusatori asked what happens if the TIRZ can’t come up with the necessary debt capacity. What will happen to the Northpark project that has taken the resources of many for the last several years.

“It’s over,” came the answer.

Board member Philip Ivey said, “Our budget got changed. Our extension got blown out. The annexation map got changed. We thought all this was agreed on. We have jumped through every hoop all for the benefit of Kingwood. We have spent a lot of time and money.”

Jennifer Curley, representing the City, pointed out that the city was operating with only the Northpark project under discussion and not taking into consideration the entire $300 million list of mobility projects determined two years ago in the Kingwood Mobililty Study.

“And, you are getting $15 million toward the $50 million needed from the City,” she said. “No one said no. A 21-year extension is not a bad thing. We have been through all the scenarios. It has always been the plan to get to 2048.

“We focused on Northpark Drive. Andy said to scale it back, get basic and get it approved, and that is what we are doing,” Curley said.
Deleon replied that everyone wants the Northpark Drive project to be done.

“We spent $400,000 on a mobility study to identify sub-regional projects, and not just do a study on one traffic light. Let this be the new mantra – our intent is to further those projects identified in the mobility study.”

The board meets Jan. 11, 2018, at 8 a.m. at the Kingwood Community Center.

Cynthia Calvert
Author: Cynthia CalvertEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
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A trained journalist with a masters degree from Lamar University, a masters from the University of North Carolina-Chapel Hill, as well as extensive coursework toward a masters of science in psychology from the University of New Orleans, Calvert founded the Tribune Newspapers in 2007. Her experiences as an investigative, award winning reporter (She won Journalist of the Year from the Houston Press Club among many other awards for reporting and writing), professor and chair of the journalism department for Lone Star College-Kingwood and vice president of editorial for a large group of community weeklies provides her with a triple dose of bankable skills that cover every aspect of the journalism field. Solid reporting. Careful interviews. Respect and curiosity for people and places.