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Tomorrow our City Council will vote under agenda items 6 and 7 to reappoint Deborah A. Zuloaga and Arlene Carroll to the Board of Tax Increment Reinvestment Zone 5 and, under agenda items 8-12, to newly appoint Johnny Escalante, Martin Morgades, Michelle Esparza, Ed Houghton, and Steve Ortega to the same Board.
TIRZ 5 encompasses all of Downtown, the western part of the Segundo Barrio, and a portion of Central El Paso. Any incremental increase in tax revenue is reinvested into the TIRZ rather than collected by the City for its General Fund with the aim of improving the area and addressing blight.
But now the City wants to hijack TIRZ 5 funds and reallocate them for the Deck Plaza that is planned for Interstate 10. According to Adam Powell of the El Paso Times, TIRZ 5 “currently only generates about $1 million in tax revenue, which would have to be boosted to $10 million to support the Deck Plaza project. To do that, the city would have to expand its boundaries, but any expansion would have to be approved by the committee and the City Council.”
In fact, the Board of TIRZ 5 voted April 9 to expand the boundaries of TIRZ 5 and allocate “funds for Deck Plaza design and/or construction activities.” As Sara Sanchez reports in El Paso Inc, the vote was split 4-3.
The Board had planned to vote April 22 on earmarking $2 million of TIRZ funds for the project but abruptly canceled the meeting without explanation. That is because Mayor Johnson wanted time to stack the Board with his friends and campaign contributors first, and that is why he is installing five new members during tomorrow’s City Council meeting. We are confident the TIRZ 5 Board will vote for a multi-million-dollar deck plaza allocation at their next meeting in May with little or no opposition.
By expanding TIRZ 5 and hijacking its funds, the City can claim it is not using General Fund dollars for the Deck Plaza even though it is hording revenue that otherwise would have gone to the General Fund. This will place upward pressure on our property tax since the expanded TIRZ 5 will suck millions of dollars out of our urban core that could have been used to help balance our City budget.
SQUEEZING BLOOD OUT OF A LEMON
Mayor Johnson and his allies on City Council are desperately struggling to fulfill their promise to their campaign contributors to fund the Deck Plaza, no matter the cost. They are unable to count upon support from the federal government and the state has shown little enthusiasm for the project thus far.
They may be able to milk a couple million per year from TIRZ 5, but that is not nearly enough to leverage a large bond.
More likely, they will divert funds from the Camino Real Regional Mobility Authority, which is chaired by the Joyce Wilson (who never seems to go away) and dominated by Johnson’s friends. Between TIRZ 5 and the CRRMA, they may be able to bond over $100 million without going to the voters for permission.
Johnson and his allies will likely find other revenue streams to contribute to the Deck Plaza costs, from the Public Service Board, parking meters, the Hotel Occupancy Tax, or whatnot.
As Sanchez reports, the City is hoping to come up with $35 million internally, which would be nearly enough to meet street repair and maintenance needs for a year, but apparently it is more important to build a cement slab over five blocks of freeway than it is to repair and maintain the streets of the 21st largest city in the United States!
We are predicting that in the end both the City and County will resort to certificates of obligation for at least $150 million of the project cost, claimed by Yellen to be only $208 million when in fact we know it will exceed $400 million.
The rapacious vultures are fully in charge.
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