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Updated: May 25, 2017 @ 9:52 pm
May 25, 2017
Your argument is well-reasoned. But in appealing to the public, you failed to share why payment is being held, in the spirit of fair debate.
You state as fact, "If the term of the zone ends before he is completely paid, he gets no more money. The Developer is at risk.” Other relevant facts omitted in your piece is the term length (40 years?), start date, and whether provisions allow extensions – to help put developer risk into context. At some point, a prudent question becomes why should the City pay for infrastructure improvements for a development that may never complete?
Compelling information to add would be typical term lengths for TIRZ agreements of similar type & scope, from areas outside of Galveston.
Now, with the above said, an agreement is an agreement. Fully agree there. But like any business agreement, it can be subject to attempts for re-negotiation.
Regardless of the term of the “Zone”, the developer should be paid in accordance with the agreement that was entered into. I am very surprised that this agreement does not provide for the addition of “interest” to what must be paid to the developer if they have submitted for payment, in accordance with the agreement, and payment is not provided. I do not know if this particular TIRZ agreement has such a feature. The developer however cannot be expected to “fund” municipal improvements out of his pocket – forgoing a return on that investment for an unreasonable amount of time.
1) the developer provided a plan for the infrastructure improvements;2) the plan was approved by the appropriate entities;3) the infrastructure development work was completed in accordance with the approved plan;4) property taxes have been paid at the increased rate by property owners within the TIRZ (not others in the City)
The developer should be paid what he is due from the overage in tax receipts (due to higher assessed values because of the improvements) which did not go to the Taxing entities. No one wants to negotiate with folks which won’t stick to an initial agreement to begin with!
A needed Mea Culpa. The first paragraph is wrong. The RDA has held its orientation. It just didn't stick with all the board, but a good number of members are more informed.
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