A Public Hearing To Give-Away $20-million
On September 9, 2024, at 5:30 pm, in the City Council Chamber, the City of Paris, Texas, held a public hearing on a $20-Million Give-Away. Entering 2025, transparency is still lacking – even with a new ‘public information officer’.
Anyway, it was on the same project on which the city was previously prepared to offer “community development” incentives of $7-million.
Many of us have failed to realize that inflation was increasing that fast . . .
Prior to 1987, Texas cities were not allowed to give incentives to solicit businesses, industry, or other endeavors. Then the same foolish voters, who, previously, in 1981, approved local Appraisal Districts to establish a protective barrier for local taxing units, allowed cities to use public taxes for private purposes. (FYI side note: The state budget in 1977 was $24 billion; today, the current budget is $321.7 billion from all revenue sources.)
So now, the City is setting the stage to do a $20-million give-away to subsidize development of private property – “to create the Forestbrook Public Improvement District No. 1.”
Behind all the diligently researched (supposedly) and carefully crafted words, it dumps a $20-million- plus debt on taxpayers, which council members will then give to the private limited liability company, Lone Star Planned Developments, LLC.
Now, the city doesn’t say it like this, of course; it relies on the sizzle to sell a rotten steak. For instance, the hearing was to “accept public comments” and “discuss” the creation of a public improvement district for 200-homes, which the city already intended to approve (the information came from their homework). The hearing was simply a CYA thing.
- As presented, this proposed “Improvement District” has a total land area of 59.62 acres; roughly, the $20-million is an incurred $335,457 per acre cost just for improvements (?). Or a $100,000 lot cost for each of the proposed 200 homes
- Improvements include design and construction, landscaping, streets, drainage, off-street parking, water and sewer lines and services, etc., including other off-site projects that would be a benefit to the property
- Acquisition, by purchase or otherwise, of real property
- Payment of expenses incurred in the establishment, administration, and operation of the District
- Payment of financing associated with financing public improvement projects
- The city says this district “would include property owned” by the limited liability company, but has not disclosed if there is or isn’t any current indebtedness. Nor, if there is, the amount
- “The city shall levy assessment on each parcel within the District in a manner that results in imposing equal shares of the costs on property similarly benefited” (but who determines ‘equal’ and ‘similarly’ – you know, like east and west?)
There’s more, most of it Happy Double Talk: “The city is not obligated to provide any funds to finance the authorized improvements, except for assessments levied on real property within the District.”
“Except” – that’s government splitting a hair for you –
The $20 million goes for planning and design, land acquisition and development, the related cost, and administration, plus acquisition of other properties.
So, what costs remain?
The assessments are on top of property taxes, and are calculated according to the size of the parcel, tract or lot, while property taxes are assessed on appraised value. Unlike the property tax, however, assessments made by an Improvement District expire once paid in full.
If taxes are frozen within the district, as usual in such projects, it means that schools and other taxing units cannot increase taxes on the property. In which case, it denies those units their right of taxation, and it is not fair to those who have to pay higher taxes when rates increase outside the protected district.
But isn’t adding $20-million (plus interest on top of the property tax) pricing the project out of the market? It’s going to take a long time to pay off $20-million in addition to the taxes. And a $100,000 average lot costs could mean the interest costs may be added on for years.
Or, is there a worm in the woodwork somewhere . . . ?
For instance, will taxpayers outside the district’s boundaries pay for “other property” that consists of building street or highway access to the project?
Treating that action as a normal city public street costs is unethical, if not illegal. Using public money for a private purpose is (a direct subsidy for the developer) frowned on by most courts.
The Paris Texas Chamber hopes, regardless what the city claims, that taxpayers understand that repayment of all city-related debt (plus the interest) is guaranteed by the City of Paris, and if results do not materialize or the economy fails, the taxpayers will be “obligated” to pay it?
What does Paris need most? Spending $20-million on a gamble or investing in people?
We’re subsidizing a limited liability company with nothing to lose but a dream –
Since the 1980s, Paris has done a lot of dumb things but, evidently, as our new brand warns, we keep reaching higher . . .
return to Paris Texas Chamber of Commerce
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