November 19, 2018

Turner Attempts to Blackmail Kingwood TIRZ: “Give Me a Third of Your Revenue or Sit in Traffic Forever”

Turner Attempts to Blackmail Kingwood TIRZ: “Give Me a Third of Your Revenue or Sit in Traffic Forever”

Not all TIRZs are created equal.  Nor are they operated in the same manner.  There are ones, like Uptown, that are totally controlled by the commercial real estate interests in the area, resulting in debacles like the Post Oak bus lanes project.  But there are others that are mostly controlled by residents and small businesses in their areas and work hard to make improvements that will benefit a wide cross-section of their communities.  The Lake Houston TIRZ (commonly referred to as the Kingwood TIRZ) falls into the latter category.

There is one other significant difference in the TIRZs.  Some, depending on how and when they were formed, must turn over a third of their revenue to the City for “affordable housing.”  Others, including the Kingwood TIRZ, have no such requirement.  But last week, Turner demanded that the Kingwood TIRZ begin turning over a third of its revenue to the City for “affordable housing.”  Last week I attended a Kingwood TIRZ board meeting where Turner’s demand was considered.

While “affordable housing” sounds like something everyone should support, I will tell you that the Houston Housing Department is a cesspool of incompetence, endemic pay-to-play, and outright corruption; witness the $6.7 million contract to Turner’s former law partner to be paid from Harvey relief funds that the Housing Department recently recommended to Council recently.  (I will be writing more on the Housing Department and “affordable housing” at the City soon.)

Several of the TIRZ board members asked Turner’s representative at the meeting if she could tell them how the money would be spent if turned over a third of their revenue.  She answered, “No.”  Under further questioning she finally admitted that some of the funds would likely be used to “reimburse” the City’s general fund for “administrative costs.”  Surprise, surprise, said no one.

So, why wouldn’t the TIRZ board just tell Turner to shove off?  Well, because they are between a rock and a hard place.

One of the priorities of the Kingwood TIRZ has been to reconstruct Northpark Drive and build an overpass over a state highway and adjacent railroad tracks.  Northpark is the northern entrance to Kingwood.  The only other one is Kingwood Drive.  Northpark is badly in need of a renovation and expansion.  When I went to the meeting on Thursday, there was a traffic jam westbound on Northpark from US-59, stretching back nearly three miles.  I am told that it can take as long as 45 minutes to get to the freeway during rush hour.  In the afternoons it is the same situation in the other direction.

The Kingwood TIRZ has been planning to issue bonds to complete the Northpark project, which they expect to run about $67 million.  But the rub is that the TIRZs have a fixed life and to extend that life, the City must agree.  The Kingwood TIRZ’s current term will expire at the end of 2027, and therefore it cannot issue any bonds that would mature beyond that date.  So, to complete the Northpark project, the City must agree to a 20-year extension to the life of the TIRZ.  Turner’s ransom to agree to the extension is for the TIRZ to turn over a third of its future revenue to the City.

What makes this ploy particularly galling to residents of Kingwood is that, according to Council Member Dave Martin, the City has allocated no capital improvement (“CIP”) budget for Kingwood in over a decade.  Considering that Kingwood residents pay millions to the City each year in property taxes, sales taxes, and, of course, drainage fees, Turner’s attempt to take another pound of flesh by confiscating a third of the TIRZ’s revenue is truly an outrage.

Martin has proposed a compromise that would phase in Turner’s money grab and, perhaps, salvage enough revenue to complete the Northpark project.  But that is hardly the only infrastructure improvement Kingwood needs, especially when you consider the severe flooding it suffered during Harvey.  So, even if Turner accepts Martin’s compromise, the Kingwood TIRZ’s ability to deliver the infrastructure Kingwood needs in the future will be severely hamstrung.

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