CORPUS CHRISTI, Texas — The Corpus Christi City Council will vote on Tuesday whether to give final approval for a tax increment reinvestment zone as part of the proposed Bohemian Colony project.
Bohemian Colony is a 220-acre development slated for the city’s Westside along Crosstown Expressway, between Holly Road and South Padre Island Drive.
The project would build hundreds of affordable housing units on what is now farm land.
However, the TIRZ attached to the project is unlike others in the city, and that has raised some concerns.
Those concerns were voiced in a social-media post by former city councilman David Loeb. He's concerned the TIRZ reimburses the developer for streets and utilities built for the project, work normally paid for by developers.
“The development codes say you've got to build your own streets inside your development, you have to build your own utilities inside your development,” Loeb said.
Currently, the city gets about $13,000 a year from the land's property taxes because of an agriculture exemption. If any improvements are made, the property value will go up. Under the proposed TIRZ, 75 percent of the new property taxes will go back into the development. That money will serve as a reimbursement for streets and utilities.
“If the development does not develop and capture that increment as planned, then the developer doesn't get reimbursed,” said City of Corpus Christi Director of Finance & Business Analysis Heather Hurlbert.
The Corpus Christi Regional Economic Development Corporation vetted the developer, Roberto Santos Williams, and feels he has the proper experience and funding for the project.
The residential aspect of the project seems to be the real money-maker for the city, but the planned 450,000 sq. ft. retail aspect of the project also concerns Loeb.
“There aren’t tenants out there for 450,000 sq. ft. shopping centers,” he said. “You Google ‘retail bankruptcies 2020,’ and you’ll see a list of places you and I have shopped for 20 years that aren’t just going bankrupt -- they’re going away.”
Some city leaders feel retail should be built first to create a sales-tax base, but District 2 City Councilman Roland Barrera disagrees.
“Retail would bring in sales tax,” said Barrera. “However, ad valorem (property tax) is ad valorem, and the majority of the ad valorem comes in from the residential component of it.”
This TIRZ would be the city's first involving a single developer on a primarily residential project.
“It's not uncommon around the country; it's just never been done here,” said Barrera.
Loeb worries about the precedent this TIRZ would set, and what it would mean for the city's tax base.
“If you keep cutting places out, then eventually you've got a smaller and smaller group of people that are paying for everybody's improvements,” he said.
The city’s contribution to the TIRZ is capped at $9 million, meaning once that number is hit, any additional tax revenue growth would go to the city.