A new dawn: PEDC re-aligned

PHARR – Those naysayers during the May 9th city election who claimed that new Pharr Mayor Ambrosio “Amos” Hernandez’s tax- and utility-rate reduction campaign promises were hollow and shallow couldn’t help but be surprised last Tuesday when the city’s chief financial officer, Juan Guerra, stood before the city commission and said that those reductions in ad valorem taxes and utility rates were, in fact, possible for the city to enact.

 

In other words, the money is there to implement the cuts, if the city commission so chooses.

 

During the first city commission meeting following the May 9th election, in which Hernandez and three new city commissioners – Ricardo Medina, Eleazar Guajardo and Mario Bracamontes – were sworn into office, Guerra said, “Based on my study of the city’s financials, the property tax reduction is possible based on current property tax revenues staying the same moving forward.” With regard to utility-rate reductions, Guerra said that it could be funded by using, in part, the utility fund balance, currently in excess of $2.9 million.

 

The commission, led by Hernandez, is also looking at setting up a separate program to assist low-income residents who face having their utilities (water and garbage pickup) shut off for failure to pay.

 

With regard to property tax reductions, Guerra described the mayor’s plan to use 50 percent of all new revenue growth – which includes a combination of property and sales taxes and bridge collections – to fund property-tax reduction as being so logical, that: “Any city in Texas could adopt it if it wanted to.”

 

Granted, not every Texas city is fortunate enough to have its own international bridge, but a lot of them do enjoy surplus sales and property taxes. So why not give some of that surplus money back to the residents, Hernandez has asked the public during numerous campaign speeches. As opposed to, let’s say, private developers who are eager to develop properties that may or may not prove valuable to the city in the long term?

 

Expected to enter city business in a divided fashion, three to four, with the mayor’s side being in the minority, based on the way the campaign slates – Pharr First and Pharr Forward – were aligned in the May 9th election, the city commission surprisingly approved most of last week’s agenda items in unanimous fashion, including re-alignment of the Pharr Economic Development Corporation (PEDC) board of directors.

 

The new PEDC makeup includes both Hernandez and City Commissioner Oscar Elizondo, who helped campaign strongly against the new mayor’s slate. At last week’s swearing-in, however, both men spoke in terms of working together in a united fashion as opposed to a return of days gone by, circa early 2000s, when the city was not only divided, but bitterly split apart at almost every turn. Especially after the mayoral race of 2002, when the city commission majority’s often bounced back and forth like ping-pong balls on speed.

 

As of last week’s meeting, the former Pharr City Commissioner “Eddie” Cantu faction – including his dad, Cruz Cantu, and good friends, Carlos Villegas, who’s served as chairman for the past three terms and who is also a parttime city employee, along with City Commissioner A. Jimmy Garza -- are no longer part of the EDC.

 

Also no longer a part of the EDC board: Jim Brewster and “Polo” Palacios.

 

Besides Mayor Hernandez and Commissioner Elizondo, those named to replace them include: Dr. Ramiro Caballero, who ran with Hernandez on the Pharr Forward slate; one of the Smiths from Matts Cash & Carry (as yet, unconfirmed); Vic Carrillo Jr. (brother to City Commissioner Bobby Carrillo); and City Commissioners Edmund Maldonado and Ricardo Medina.

 

The new mayor, “Amos” Hernandez, the poor kid from south Pharr who grew up amid tough personal family hardships and heartbreak, said he has already put together a 90-day plan for the city, as well as a one-year plan and a four-year plan. All of which will be laid out on the city’s website for all to see.

 

“Full disclosure. That’s what we’re going to be all about,” he said.

 

His medical colleague, and now a member of the PEDC, Ramiro Caballero, himself a neonatologist, has nothing but praise for his friend, the new mayor. The two have worked side by side for years, caring for sick kids. Neonatology is a subspecialty of pediatrics that consists of the care of newborn infants, especially the ill or those born prematurely.

 

Caballero, himself a native of Alamo, now a 20-year resident of Pharr, came back to the Valley to practice medicine in 1986, after sweating his way through college, four years of medical school, a three-year residency in pediatrics, and then a two-year fellowship in neonatology. When he arrived here in ’86, there was only one neonatologist in all of Hidalgo County, Dr. Javier Ramirez.

 

“The day I got here, he took off for a two-week vacation to China,” Caballero said, remembering the past. “It was a stressful time, to say the least.”

 

Hard to imagine now, with Hidalgo County chalk full of medical specialists, but back in the mid-1980s, the medical structure here was entirely different. And in fact, for a period of time, Caballero and Ramirez were the only two neonatologists who took care of sick newborn babies at all the area hospitals located in Weslaco, Edinburg, Mission, Starr County, and McAllen, including both Rio Grande Regional and the McAllen Medical Center.

 

 

 

 

 

 

 

 

 

For his part, Pharr City Manager Fred Sandoval said nothing will dissuade him from believing the Costco/Glaser Revitalization Project was a smart move on the part of the city.

 

At the end of the day, a hundred, hundred-fift million, $200 million worth of new construction. A couple thousand jobs, maybe more by the time it's all said and done. Maybe, I don't know, a hundred and fift, 200, maybe $300 million worth of sales tax. Do the math on all of that. Okay, by the time it's all said and done, it's an investment, not only for my future, but my kid's future. Pharr is going to be in a position that it never has been before because the elected officialshad some foresight and they said, ‘You know what, we're willing to make this investment. We're willing to make the investment to insure that Pharr has a revenue stream that's going to be serving us for decades to come.’ ”

 

Before coming into office Mayor Hernandez had his own group of financialexperts run the numbers, and he said those findingsdiffer somewhat from those of the city manager.

 

When Fred speaks of the $200 million worth of new construction, he’s including the new Pharr Town Center (the old El Centro Mall site). But if we’re speaking solely about the Land Consolidation Project from Business 83 to the intersection of West Kelly Avenue and South Jackson Road, which includes the Costco development, the more realistic amount is $45 million worth of new construction if indeed the land is ever fully developed.”

 

Also, with regard to job creation, once again Hernandez said he believes Sandoval is including the Pharr Town Center when he speaks of several thousand jobs being created.

 

“If we’re speaking solely about the Land Consolidation Project, the more realistic number of new jobs created is approximately 350 if the land is fully developed,” said Hernandez.

 

And with regard to the creation of new taxable sales – between $150 million and $300 million, according to Sandoval – the new mayor said his estimates show that number will more likely be in the vicinity of $60.5 million, of which the city will collect approximately $1.2 million in sales tax revenue, and that won’t happen until the Land Consolidation Project is fully developed. Based on the land sales agreement with Glaser, that was supposed to have been completed by the end of 2016, said Hernandez. To date, only approximately 20 percent of the land is developed.

 

During this recent city election, Pharr’s Produce Park (Produce District Project) was also a matter of contention between the two campaign slates: Pharr First and Pharr Forward. Now, with the election won against three of the four incumbents who voted to approve it, the new city commission make-up will have to decide whether the multi-million-dollar deal was a good move for taxpayers or a bad move. And how to proceed from here.

 

Basically, the deal boiled down to this:

 

 

Part of the argument made during the recent election was that the family of then-Pharr City Commissioner A. Jimmy Garza made a profitfrom the development of the Produce Park. In other words, the approximate 240 acres of land that the Garza family owns adjacent to the park benefitte (land value increased) when infrastructure improvements were made to the 89-acre development: water, sewer lines, drainage brought in, etc.

 

But Sandoval said that’s not really the case.

 

The (produce park) is going to be a success at some point in time,” he said. “It’s like anything else, we made an investment in the area to spur development.”

 

To help facilitate the development, the Garza family donated 8.8 acres of land. While he was on the city commission, Jimmy Garza abstained from voting on the project.

 

“The city bought those 90 acres for a couple of reasons,” said Sandoval. “One, to mirror what we were doing over here by Costco, because we figured,look, if we don't put an investment in the ground, no private investor will. If we don't believe in our bridge, and we don't believe in our industrial area, then who will? This is the interesting piece, because, yeah, we bought those 90 acres, and I don't think we paid any more than any of the prevailing prices per acre anywhere near there. It's prime property/ it's right off of Military (Highway).”

 

Sandoval admits that the Garza family will benefitfrom the project, but so will many other land owners in the area.

 

“We used those 90 acres to leverage the other probably 250 (acres) to 300 in the area. Both sides of Military. So, again, using the same mindset that a private developer couldn't come in and do it because the margin wouldn't be there, so we put ourselves in that position to spur development. I go back to the same thing. If me, as a city manager, and the bridge board as a governing body, and the city’s elected officialsdon't believe in our bridge and our industrial area, and the potential it has, then who will?”

 

Besides, said Sandoval, “Those 90 acres, because now they have water, and sewer and drainage, those 250 acres around it now have drainage and water and sewer (as well). That increases potential. The other thing that people are forgetting is that (the $5 million or $6 million the city invested for placing infrastructure in the area) is fully reimbursable by the TIRZ (Tax Increment Reinvestment Zone.). Nobody’s talked about that. I don't see how the city is going to lose.”

 

According to city records, the Pharr TIRZ 2014 financialannual report shows approximately $93,000 being generated annually. Meaning it would take approximately 65 years to recoup the infrastructure investments.

 

Tax Increment Reinvestment Zones (TIRZs) are special zones created by a municipality or county in the state of Texas to attract new investments to an area. TIRZs help financ the cost of redevelopment and encourage development in an area that would otherwise not attract sufficientmarket development in a timely manner. Taxes attributable to new improvements (tax increments) are set-aside in a fund to financepublic improvements within the boundaries of the zone.

 

My point is,” said Sandoval, “is that we've got a lot of interest, and it's going to directly affect our bridge in a positive way, and we're moving forward. (We’ve got) four lots that are ready to close any day now (early May). I got another one that we're starting on where I've already got two suitors that are going to rent from us. All of that is directly affecting our bridge in a positive way.”

 

Now, it’s the job of the new city commission on how things will proceed from here.

 

According to Hernandez, he still believes the city has a bright financialfuture and that Fred Sandoval can play an important part in that process.

 

“From the very beginning of my campaign,” said the new mayor, “I never doubted Sandoval’s worth to the city. My main concern was that he was overwhelmed wearing two hats: that of city manager and director of the EDC. If the city commission can finda way to split his duties, I believe in the area of economic development he can excel, given the proper environment and oversight.”