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Wednesday, March 7, 2001
The TIF question
City voters should keep their focus on growth and jobs.
One issue Corpus Christi voters will decide on April 7 is whether the Tax Increment Financing proposal is an appropriate use of the city's financial authority. In general terms, voters will decide whether this plan for the island is a Good or Bad Thing.
City government is placing a bet. It is wagering that tax revenues on the island will skyrocket with a proposed development if Packery Channel is dredged to connect the Laguna Madre with the Gulf. That dredging is necessary before Paul Schexnailder's proposed $677 million resort/playground development proceeds.
As explained in a Caller-Times article by staff writer Samuel Segrist, dredging Packery Channel will cost some $30 million, two-thirds of which will come from federal funding. The city to come up with its $10.5 million share would issue bonds backed by the TIF district. The bonds would be purchased by the developer.
There is a catch here. The city is betting that revenues on the island will increase. That increase would be used to pay off the bonds and the annual maintenance costs of keeping the channel open. But if there is no substantial increase, the city would not be obligated to pay off the bonds. The developer is taking all the risk.
Dredging Packery will depend on the approval of the voters on April 7 to the TIF district, and the approval next year by the U.S. Corps of Engineers to the viability of the project.
The only issue up to the voters is whether to authorize the TIF district. The Tax Increment Financing concept is only a tool. Houston used it to build two high schools. Fort Worth used it to attract the Texas Motor Speedway. Chicago used a TIF for its North Loop redevelopment; Los Angeles used it for its Bunker Hill development; and San Diego used it for its Harbor Plaza. Corpus Christi created a downtown TIF in 1987 to pay off bonds used to build the Texas State Aquarium; but that one got caught in the oil downturn and there was no increase in tax revenues to capture. The city had to dip into its general fund to pay off the bonds.
The city is being very creative with the proposed Padre Island TIF. The only money risked is the increase to the tax base that would come with development. The developer is taking all the risks here.
Corpus Christi needs jobs and growth. It must take out all stops to encourage development. A spectacular resort on the island would make this entire area more attractive to investors and other developers. New growth would bring jobs and boost tax revenues for the city. Tight city budgets have shown us that the city must grow to enlarge its tax base. That growth would reduce the burden on city taxpayers.
We hope voters take the trouble to inform themselves of the issues involved and go the polls. The best antidote to cynicism and apathy is civic spirit. Remember - we need jobs; we need growth; and development for Corpus Christi is definitely a Good Thing.
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© 2001,
a Scripps Howard newspaper. All rights reserved.
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