Galveston, tell the council to say no Thursday to developer Tofigh Shirazi.

The city government has been consistently emasculated by Shirazi’s constant bullying and threats of litigation ever since he came to town expecting special treatment 16 years ago.

When the Beachtown tax reinvestment zone was created in 2002, city leaders agreed to reimburse him $9.3 million for infrastructure. Not content with sewer and water pipes, he also wanted free landscaping, sidewalks, streetlights, beach walkovers, lawyers and consultants. Done, said the mayor.

He promised to build houses, a hotel, and other structures to generate enough new property taxes to pay him back for his infrastructure in 11 years, but he asked for a 40-year obligation from the public. No problem, said city leaders.

The city created two new committees, TIRZ 13 and the Redevelopment Authority, to oversee the zone. Although the primary purpose of the TIRZ 13 committee is to approve his payments, Shirazi demanded that he be its chairman. You got it, said the council.

By 2013, by when he had committed to create $156 million in value, his project was valued at only $59 million, $30 million of which was for land, not structures.

Yet he installed infrastructure with a vengeance, exceeding his limit by $2.5 million, and demanded public reimbursement for it all. He charged $110,000 extra to camouflage his sewer lift station as a clock; paid over $400,000 for beach walkovers when the budget was $120,000; installed concrete streets with brick pavers when asphalt was specified. That’s OK, said the TIRZ 13 committee.

His spending has never been audited. Accountants reviewed Shirazi’s invoices to confirm they were “related” to zone projects, but “(w)e were not engaged to, and did not, perform an audit ...” We don’t need that, said the RDA.

Disappointing tax revenues combined with excessive infrastructure made the interest rate on the public’s ballooning debt to Shirazi critical. The rate was a floating one, declining over time from 7.3 to 3.25 percent. That reduced the public’s “daily” interest obligation to Shirazi from $2,400 to $1,070. Despite the decrease in the cost of money, Shirazi demanded the high rate.

When the RDA moved to hold him accountable, Shirazi asked council to replace its members (including me). They’re outta here, said the mayor.

Shirazi asked to negotiate with the new RDA, but he required them to meet behind closed doors and withhold all negotiations from “the media, the public or any other persons:” “Any action taken in open meeting will not mention the specific terms and conditions ...” Our lips are sealed, said the RDA.

With no opportunity for public comment, the RDA agreed to relieve Shirazi of the obligation to build any more taxable structures; reimburse him for all infrastructure plus more in the future; and permanently pay interest at 7.3 percent. We don’t want any controversy, said the city manager.

Now Shirazi has asked council to “approve, authorize, adopt and incorporate” this one-sided deal.

Instead of rubber stamping the RDA’s concessions to Shirazi, the council should do something long overdue: audit his spending.

Elizabeth Beeton is a former city of Galveston council member.

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(6) comments

Jarvis Buckley

Elizabeth Beeton is so much more to
Galveston Island than a former Councilmember. It would be so nice for the GDN to list all of the committee's & boards & commissions that she has been a member of. The lady works tirelessly
For the for the residents of Galveston. I have the deepest respect for her work ethic & brain power.

Ron Shelby

I agree. This has definitely been a very problematic TIRZ.

Elizabeth Beeton

Thank you both very much.

Curtiss Brown

Oh Pooh, Mrs. Beeton makes Mr. Shirazi out to be a monster, and in fact he is not a monster. What type of person takes a deliberate, cautious and accommodating man and turns him into a greedy monster? Not a nice thing to do.

Bill Broussard

When you say "deliberate, cautious " it has me recall Beeton, Curtis. I think you do pretty much the same thing with her that you accuse her of doing with Shirazi frankly. Why not let the numbers speak for themselves after an audit? One does not have to be a greedy monster to be off course.

But I still wonder what the heck Jim Ware was thinking when he penciled this new deal.

Curtiss Brown

After an audit, Bil? What kind of audit? What would be included in that audit? Aren't all audits the same? Or are they? How much are you willing to spend for your audit? You might want to find a C.P.A. and get a quote. Be sure to tell them what it is you are auditing and why.

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