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This is why Galveston can’t grow - The Galveston County Daily News : Guest Columns

October 24, 2014

This is why Galveston can’t grow

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34 comments:

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  • isleshire posted at 8:50 pm on Sun, Jan 26, 2014.

    isleshire Posts: 315

    I know I have been pretty tough on Mrs. Beeton in this thread. Sleeping on it I realize that I basically respect the work that she does. I think she is a great researcher. She doesn't leave any idea unexplored. And that to some extent I find frustrating. I don't expect developers to be good guys or bad guys. I expect them to work towards a profit. You don't have to trust them, but you can rely on the fact that they will try to make a buck. In dealing with developers you don't leave things to chance. You run down the road and you check things out. You inspect, you check, you double-check and everybody knows that this is going to happen. You don't have to worry about breaking someone's heart or hurting their feelings. It is just the way things are done.

    For me, as someone who has been involved in economic development my entire life, it is difficult to see someone so effective at changing peoples attitudes in what I know is a bad way. Especially someone who can be knowledgeable and can embrace complex ideas. And can be an effective communicator.

    The TIRZ projects have done good things for Galveston and stand to do more good things for Galveston. Do we really care if a developer makes a buck while taking us into the future? Do we have to be Galveston Sandcrabs in a shallow hole on the beach forever?

    This community can consider projects; can analyze them and assess them and go with them or not. We are capable of that. We don't have to take every deal that comes down the Interstate, but we ought to give them a fair shot. And when we make a deal and shake on it we ought to stand by that deal.

    I look at TIRZ as a public-private partnership, not in the sense of two owners of a shoe store, but of two entities who each have talents, abilities, wishes for the future and specific authorities under the law who work together to accomplish a mutually agreeable mission.

    When someone wants to undo that they should have a pretty good reason. And when I see that they don't, I am going to say something. I don't work for elected officials any more. I don't have to protect their agendas by not saying anything. I will speak out.

     
  • smfennew posted at 6:55 am on Sun, Jan 26, 2014.

    smfennew Posts: 125

    OK - it seems like we're in agreement on both what is in the agreement and what he is owed and should be paid.

    My original posting was based on the, perhaps erroneous, reading that he was asking for the full $11M, or at least more than the accumulated tax increment. If that isn't the case, then I apologize and was wrong. I can't really tell from the article if that's true or not.

     
  • isleshire posted at 9:10 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Yes, only the increase in taxes, the increment. The base value of the property is static and the taxes go to the taxing entities who are part of the zone. The increase due to the development are taxes that are used to repay the cost of the public infrastructure.
    The School District and the Community College are not part of the zone and get the full value of the taxes paid to them.
    The developer gets the increment from each year until the end of the zone term until the public infrastructure is paid off.
    Alternatively, the City can consider paying off the developer what is owed by creating a bond tied to the increment. This is not likely.
    If the zone comes to an end without paying off the value of the infrastructure the developer is out of luck. So it is to his advantage, and the advantage of the city, that the developer is successful in his project.

     
  • smfennew posted at 8:16 pm on Sat, Jan 25, 2014.

    smfennew Posts: 125

    "The man should be paid what has been approved by the zone board and accrued as taxes from the zone. "

    Agreed. It may be that the $900K figure mentioned in one of the articles is the accumulated taxes.

    But if he wants "the future year payments in future tax income less board expenses up to the term of the zone" then that's a different story, isn't it?

    Do you know if the agreement specifies the "increase" in taxes, or merely the taxes?

     
  • isleshire posted at 7:27 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    I don't know the current values. But remember the zone was created in 2004 or some such and for most of that time the only taxpayer was Shirazi himself.
    You won't have much luck with the CAD as there are a number of private owners today.

    The man should be paid what has been approved by the zone board and accrued as taxes from the zone.

     
  • smfennew posted at 7:14 pm on Sat, Jan 25, 2014.

    smfennew Posts: 125

    So, how much increased tax revenue has he generated? How much money is he asking for? I'm in the camp that says - pay him what he's due (however dubious some of those costs may have been, it's water under the bridge), but no more (without a new deal).

    (I was trying to look up some of the tax info - but my computer and/or the county's cad computer are giving me fits.)

     
  • isleshire posted at 6:52 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    The Zone has a board a board of volunteers appointed by council. They over see the way tax dollars are spent. Lowest and best bid, stuff like every elected body in the state considers. The construction is reviewed by city inspectors. The construction (city improvements) is under the same review that any contractor doing a city project would experience.
    The. The costs are submitted to the board for approval and the. Audited by an independent auditor that reviews the payments and approvals. The auditor is selected by the RDA and their methods are specified by the RDA.
    Following the auditors approval the costs become an obligation of the zone and it's tax income for that and future years.
    The zone board has approved over the last two years over $900,000 of repayment that has been held up by EB's RDA. It is all zone tax payments. Shirazi is owed $10,000,000 in audited infrastructure costs plus over $1,000,000 in interest.
    All he is asking for is to be paid the currently available tax income reserved for payment and the future year payments in future tax income less board expenses up to the term of the zone.

     
  • smfennew posted at 6:09 pm on Sat, Jan 25, 2014.

    smfennew Posts: 125

    I may have misunderstood the article - I wasn't at the RDA meeting. It sounded like Shirazi wanted to get paid back the money - even if it was in excess of the increase in tax revenue. Is that true? Was the agreement structured in such a way that the city owes him money in excess of increased tax revenues?

     
  • isleshire posted at 5:37 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Man are you right about the cocktail! January is my abstinence month. Only one week to go.

    But, your comments about one vote made me laugh. Ha ha.

    EB told the RDA two Fridays ago that the RDA she served on gave Shirazi one full year without comments from the board to get straight. Actually the board voted for one year of silence because they couldn't stand to listen to EB any more. She just talks and talks and talks until she beats everybody up and they surrender. And she makes OUTRAEGEOUS allegations in the middle of her comments that she won't allow to be refuted.
    That is, you can't interrupt to correct the record and in the next instant she is on to something else equally outraegeous. There is no way to catch up to her.

    As I have tried to explain here her comments make assumptions that are completely otherworldly. The Developer TIRZ are partnerships wherein the City and the developer are partners in the success of the project. It is not a contract for specific performance except within the concept of the ultimate project's success. And the developer and the city are bound to the term of the zone. If the project is not ultimately a success the developer does not get paid back for the infrastructure he paid for up front and the city gets these municipal improvements at no cost to them. Futzing with contract, interrupting the projects success, terrorizing the developer, motivating the citizens against his interests is a cheap and unworthy action as you win the improvements at no cost and the developers dream is thawarted to his and Galveston's detriment.

     
  • npappous posted at 5:12 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    and btw - EB was but one vote on RDA. She could not hold TIRZ payments up by herself - she is but one vote. One vote represents the minority of every board. If money isn't flowing then there are other board members that had reasons to not approve payments.

    Laying all this on one vote is disingenuous.

     
  • npappous posted at 5:08 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    Curtiss I am more agnostic than you think on this. I merely stated a truism - that both parties need to abide by their promises.

    The TIRZ 11 board and RDA make the decisions as to whether or not that is happening. If I had an opinion do you doubt for a second that I would not shout it out and defend it?

    I think you need a cocktail.

     
  • isleshire posted at 4:46 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Now you are just trying to slide into EB's thinking. Now you think you can say that Shirazi promised to build this or he promised to build that and he failed to perform. You can't do that.

    And you won't do that with me here to tell the truth. Shirazi has a vision for Beachtown. A vision that was agreed to by City Council, but it wasn't a vision that could not be modified within the scope of that vision. And that is the developers job. And he is held true by the fundamental nature of the agreement that what ever he does has to eventually pay him back based on the taxable value he creates. That is the deal. Not something EB imagines later on.

     
  • npappous posted at 4:35 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    " It is tax money, but not taxpayer money."

    That is a distinction without a difference.

    I absolutely agree that agreements need to be honored by all parties involved.

     
  • isleshire posted at 4:20 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    That is fine Norman. It is perfectly O.K. to feel the way you do about TIRZ.
    What you say is true. It is tax money, but not taxpayer money.
    Not one single dime of my property taxes ever went to Beachtown. So my property taxes are not in the Beachtown project or any other TIRZ project.
    The only taxpayer dollars involved are specifically identified and uniquely held to the taxes paid as a result of the development. They are taxpayer dollars but not YOUR taxpayer dollars or anyone else's who does not pay taxes in the zone.
    And I have no problem with you being in favor of PID's. They have their place. And you can be against TIRZ. But Norm, a deal is a deal. You can be against the next one, if that is what you think is right. But it is not right to turn your back on; disrupt; conflate; impede or otherwise screw up a deal that the City made in good faith.

    I think you would agree . . . a deal is a deal.

     
  • npappous posted at 4:04 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    btw - my philosophical point of view is centered around the ideas of responsibility and accountability.... Elected officials are held accountable in a very public manner every two years. That is how it should be.

     
  • npappous posted at 4:02 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    "The only taxes that are used to repay the developer are taxes that directly accrue from the value that the developer and the development create."

    Exactly - taxpayer money! I don't like any structure where taxpayer funds are not handled by elected officials. TIRZ is but one example....

    Personally - I prefer a TID.

     
  • isleshire posted at 3:48 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    O.K., Norman, show me one budget City or County, where even one dime was appropriated to ANY TIRZ development.

    The taxpayer is not on the hook for the cost of the infrastructure, the developer is. No tax value was lost when the TIRZ were established.
    The City got the very same amount of taxes for the TIRZ property in the next and succeeding budget years.

    The only taxes that are used to repay the developer are taxes that directly accrue from the value that the developer and the development create. Nothing comes from any other source. And if the taxes are not ultimately sufficient to repay the developer the developer is stuck with the costs without repayment at the end of the life of the zone.

    Are you going to call that deal unfair? If so I'd like to know where it is unfair.

     
  • isleshire posted at 3:40 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Indeed, t14, indeed. But Mrs. Beeton has worked very hard to muddy the waters. The agreement is not a contract, at least not in the sense that your comments would suppose. Mrs. Beeton is making political hay at the expense of an agreement drawn up as a partnership turning it into something else. It is not a contract for performance except and only as far as Mr. Shirazi agreed to put value into the ground sufficient for the taxes on that value to pay him back for infrastructure necessary for the development. If the taxes are not there he doesn't get paid back, but he gets 40 years to try.

    EB is not looking after the City's best interests. The City's best interests are to pay Mr. Shirazi the taxes collected on the project to repay him, as promised, for his up front investment in the public infrastructure. The City's best interests are as they were when the agreement was signed, that Beachtown be a success. Not to harass Mr. Shirazi over invented issues.

     
  • t14wagner posted at 2:40 pm on Sat, Jan 25, 2014.

    t14wagner Posts: 26

    Isleshire, If things are as black & white as you portray, Mr Shirazi would have already received his money. The agreement must be loosely worded & I applaud EB for looking out for the City's best interests.

     
  • npappous posted at 2:18 pm on Sat, Jan 25, 2014.

    npappous Posts: 310

    Not taxpayer money?!

    There are only two funding sources for the infrastructure - the developer or the taxpayer.

    I am not commenting on TIRZ 11 - but for TIRZ everywhere. The infrastructure funding is not printed by elves!

     
  • isleshire posted at 2:03 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Susan, you really should know better. You are smart enough to know the truth.
    No one is asking a dime from the taxpayers. No one is asking that any money be loaned out. Beachtown is not asking that your property taxes be paid as reimbursement for anything.

    Go back into that stack of papers in your kitchen and tell the people here the truth.

     
  • isleshire posted at 1:58 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    And you would be wrong. She only sounds as if she is a good steward of tax payer money. She makes the noises, but she isn't speaking from the same planet everybody else is on.

    I don't work for Beachtown and I don't have personal issues with Mrs. Beeton. Mrs. Beeton does many fine things. I was impressed in how she held the desalinization plant snake-oil salesmen's feet to the fire when they came before Council with their kookie scheme even when they were represented by two former Mayors! So no, she does good things and she does bad things. The things she does in economic development are bad things. Particularly as concerns the TIRZ and the RDA.

     
  • isleshire posted at 1:52 pm on Sat, Jan 25, 2014.

    isleshire Posts: 315

    That is only true if you adopt Mrs. Beeton's viewpoint. And Mrs. Beeton's viewpoint is not the one of the City when it entered into the agreement with Beachtown. In that agreement the City accepted Mr. Shirazi's view of the future for Beachtown and agreed to be a partner helping Mr. Shirazi realize that view. That means the City wanted Mr. Shirazi to succeed.
    In Mrs. Beeton's redefined universe Mr. Shirazi contracted with the City to perform certain improvements on a certain schedule. This was not the world in which the agreement was reached.

     
  • confusedemmy posted at 1:26 pm on Sat, Jan 25, 2014.

    confusedemmy Posts: 249

    The City is only asking for what Mr. Shirazi agreed upon, as well.

     
  • raifm posted at 12:51 pm on Sat, Jan 25, 2014.

    raifm Posts: 86

    isleshirte

    You sound like you work for Beachtown Or have personal issues with Mrs Beeton. I think she has been a good steward of tax payer money

     
  • raifm posted at 12:44 pm on Sat, Jan 25, 2014.

    raifm Posts: 86

    miceal

    I agree!!

     
  • isleshire posted at 11:39 am on Sat, Jan 25, 2014.

    isleshire Posts: 315

    As mentioned in Mrs. Geary's article, Beeton's simple statements are full of off-kilter assumptions.

    Essentially she views the TIRZ relationship as one of the City and contractor. The real relationship is City and partner.

    So the various documents in her world become contracts for performance and not guides for progress.

    The Beachtown developer is asking only for what was agreed upon when the City and Beachtown created the TIRZ.

     
  • isleshire posted at 11:36 am on Sat, Jan 25, 2014.

    isleshire Posts: 315

    You are wrong and confused as to the facts. It is Mrs. Beeton's efforts and her language which has caused many to be confused about what is happening at Beachtown and at Palisades Palms.

    You should make an effort to inform yourself of the actual facts.

     
  • isleshire posted at 11:34 am on Sat, Jan 25, 2014.

    isleshire Posts: 315

    You are not correct in your facts. This is because Mrs. Beeton 'suggests' certain things are happening. They are not.

    Your facts are incorrect, your conclusion is incorrect.

     
  • isleshire posted at 11:32 am on Sat, Jan 25, 2014.

    isleshire Posts: 315

    Horsefeathers! The "relentless and slavish pursuit of 'growth' at any cost" doesn't happen on Galveston Island. Plenty of rational scrutiny is given to development projects. Your words are full of the violence and fire and brimstone fostered by Mrs. Beeton and not at all appropriate for any currently ongoing or considered development on the Island.

    Put a sock on it.

     
  • miceal o'laochdha posted at 11:17 am on Sat, Jan 25, 2014.

    miceal o'laochdha Posts: 539

    The relentless and slavish pursuit of "growth" at any cost, has ruined the genuine value of many American communities in which I have spent time. Replacing the genuine value of the community with the self-destructive values of greed and wealth accumulation at any price.

    Galveston struggles not to be swept down that commode. Demonizing anyone who wishes to inject some legitimate rational scrutiny into blind support of the holy developers is an error. I believe that to be most especially true of those who support developers intent on making Galveston an Island free of the "riff-raff" of residents who are not millionaires.

     
  • confusedemmy posted at 10:15 am on Sat, Jan 25, 2014.

    confusedemmy Posts: 249

    That's it in a nutshell, Susan. I wonder who is behind this column....

    The GCDN framed the issue awkwardly with the "pleading" headline.

    Developers take risk - elsewhere. Here, the established neighborhoods suffer as a result.

     
  • t14wagner posted at 6:47 am on Sat, Jan 25, 2014.

    t14wagner Posts: 26

    Hmmmmm......Your argument suggests the developer should have zero risk, and the City pay for infrastructure improvements, without receiving or knowing when tax benefits the developer committed to would be realized.

    With that said, I dont know what the contract states and that may be your point. However, calling out Ms Beeton as anti-development is a bit off as she is simply exercising fiscally responsible judgement in the City's best interest. It's a fact that even if the City were to pay the 11MM as requested, market & other risks remain -- so suggesting the developer will resume development after payment is no sure bet.

    And that's exacty why Ms Beeton, RDA and the City should be attempting to negotiate a win-win.

    Ms Beeton, anti-development? I don't think so. Prudent, responsible development, absolutely!

     
  • smfennew posted at 6:38 am on Sat, Jan 25, 2014.

    smfennew Posts: 125

    In general, the TIRZ's are structured so that improvements are paid out of the increase in property tax for that zone. I'm assuming that is the case here. Beachtown has not generated enough property tax to pay for the improvements, so they are asking the city to "lend" them the money to continue. They are asking that our property taxes be used to reimburse them for fancy streetlights and amenities that they promised would pay for themselves - but haven't. They are asking for a handout.