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Wednesday, March 22, 2000

City Council votes to OK Packery plan

Project will require setup of special taxing district

By Jonathan Osborne
Caller-Times

With a unanimous vote by the City Council on Tuesday, Corpus Christi expressed its interest to partner with the federal government to dredge Packery Channel and renourish Padre Island Beach without increasing the tax rate.
   As a result, the city stands to receive $19.5 million in federal funding for the $30 million project.
   "If we're able to complete this project the way we hope to, it will mean an increase in jobs, an increase in hotel/motel and sales tax revenues and it's going to mean having a marketable, global tourism destination," Mayor Loyd Neal said.
   To complete the deal, the city must raise $10.5 million.
   To avoid raising the tax rate to pay for the project, the city will try to sell $10.5 million in bonds that will be repaid with revenue from a special taxing district, know as a tax increment financing district.
   Under this system, any additional tax revenues received from an increase in property values within the taxing district, which will include the commercial areas around the channel and along the seawall, would go toward paying off the bonds.
   That way, City Manager David Garcia said, the financial risk is on private investors, not the city or the taxpayers.
   Those investors, Garcia said, won't see any return on those bonds unless the area develops into the resort and commercial destination that city staff predicts will be built there if the channel is dredged to clear a waterway to the Gulf of Mexico.
   "It's really a short-term investment for what we see as a really long-term payout and a catalyst for economic growth," Garcia said.
   But before any investors can start buying the bonds, the Corps of Engineers, who is studying the project, must accept it as both a technically feasible and environmentally acceptable project.
   Within 60 days, city staff must bring a plan to the council and notify other taxing entities, including the county, the hospital district and Del Mar College, to ask for their participation. Public hearings will follow.
   Support for project
   County Commissioner Joe McComb, who was the first to speak during the public comment portion of the meeting, pointed out the economic impact the project could have on the entire area.
   "It's going to expand the tax base," McComb said. "It's going to create some jobs and it's going to stimulate the economy. There's a lot of folks out there that want this projects to happen."
   Along with McComb, more than 20 island and mainland residents showed up at Tuesday's council meeting to speak for the project, predicting it would be a boon for the island and the entire city.
   About 100 more supporters filled the audience.
   Sam Wigginton, a Realtor and former fishing guide, applauded the council for its initiative.
   "Can you imagine a destination hotel, an 18-hole golf course?" Wigginton said. "This will be one of the best things we have going. We're going to have more people down here fishing than ever."
   Char Beltran, executive director of the Convention and Visitors Bureau, said that opening the path to the gulf and renourishing the beach could double tourism in the area.
   Tourist industry
   "We know that the beach is the No. 1 draw that brings people here," Beltran said. "With this opening of Packery Channel, I know that we can take a $560 million tourist industry and turn it into a $1 billion industry."
   But a few speakers opposed the project and called in an example of the council ignoring the will of the voters, who in June shot down a proposal to raise taxes to dredge the channel.
   "This is just another example of (the council) going ahead with something that the city has voted 'no' for," said Trian Serbu, an island resident.
   Joe O'Brien, president of the Corpus Christi Taxpayer's Association, told the council that he thought the project was a pipe dream.
   "This council's lack of credibility in this community will make this proposal very hard to succeed," O'Brien said.
   But the council, like the majority of the supporters on hand, said the Packery Channel project could reverse Corpus Christi's stagnant economy.
   Entire city to benefit
   "The ripple effect of this project is going to be terrific," Councilman Arnold Gonzales said. "I see us moving so quickly once this thing is done, it's going to be hard for the rest of Texas to catch us."
   Councilman John Longoria said it would take a lot of effort by the community and the council to make the project succeed, but the payoff could be huge.
   "It is a project that benefits the entire city," he said.
   Councilman Rex Kinnison stressed the fact that the project, as it stands now, poses no financial risks to the city.
   "This is a strictly win situation," Kinnison said. "Someone's got to come forward and believe in this project enough to buy these bonds. These bonds will never be issued unless there is going to be a project."
   Councilman Mark Scott, who represents the island, said that dredging the channel, renourishing the beach and the development that will result is an opportunity to catch up with the economic growth of the rest of the state.
   "This is, in my opinion, a ray of hope," Scott said.
  

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Staff Writer Jonathan Osborne can be reached at 886-3716 or by e-mail at osbornej@caller.com

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