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River project inches forward: City commission OKs ‘conditional’ tax financing zone

May 27, 2019

The Brownsville City Commission last month conditionally approved a Tax Incremental Reinvestment Zone for a massive proposed riverfront redevelopment project known as Rio Grande Esplanade.

The commission at its April 16 regular meeting acted based on a recommendation from TIRZ consultant Travis James, vice president of TXP Inc., to “conditionally support creating a Rio Grande Esplanade TIRZ pending additional information and analysis.”

A TIRZ is a way cities can attract investment to areas that may otherwise be overlooked, with a portion of tax revenue generated by commercial activity within the TIRZ going to reimburse the developer for the cost of public improvements through a mechanism called Tax Increment Financing.

Substantial public improvements, including new road construction, would be necessary for the Esplanade to move forward, according to Sam Marasco, president of San Diego, Calif.-based Land Grant Development, who was initially approached by city of Brownsville officials in the early 2000s about a potential riverfront redevelopment.

The Esplanade would involve a 16-acre, mixed-use, urban development to be built on top of a concrete levee structure that would take the place of the current earthen. The development would stretch between B&M and Gateway international bridges.

The Esplanade’s combination of retail and restaurants would serve as the catalyst for via Americas, an associated development that would include the Kris Kristofferson Cultural & Entertainment District, a hotel, office space, and senior and student housing, according to LandGrant’s plan.

Marasco has secured, in writing, initial cooperation from the Department of Homeland Security and the International Boundary and Water Commission, but said the city still must undertake certain key actions for the project to proceed.

Deputy City Manager Helen Ramirez said James, at the city’s request, has created a framework for evaluating TIRZs, and that the proposed Rio Grande Esplanade TIRZ “passed that first test” and now it’s a matter of getting down to “real numbers.”

“(The city commission) said to us, now, let’s work with Sam and his technical team, because he has a whole technical team behind him, including the fiscal part, the legal part, the engineering part, the land-planning part, and now get into the meat and potatoes,” Ramirez said. “That’s the direction.”

She said the city plans to embark with the LandGrant team on a “critical path,” which in planning refers to sort of schedule for completing certain milestones related to a project.

Apart from LandGrant’s TIRZ initiative, the city is moving ahead with its own downtown TIRZ, though what the boundaries will be or whether it might eventually connect with the TIRZ LandGrant is asking for is unknown at this point, Ramirez said. The city’s TIRZ is intended to augment $55 million in catalytic projects — such as the Market Square and Stegman Building renovations — that have already taken place or are underway, she said.

“ It’s ... this tool that the city hasn’t really used, and now we’re ready to use it,” Ramirez said.

An April 16 presentation to the city commission by the Dallas-based planning consultant Verdunity included among its recommendations investing in downtown “to build a diverse mix of housing, shopping and entertainment options and price points” and “incentivize infill and revitalization of existing neighborhoods and areas that already have services.”

Marasco said he’s encouraged by Verdunity’s recommendations, since they seem in line with the goals of the Esplanade project. At the same time, LandGrant and its investors (and DHS and IBWC) are still waiting for the city to announce completion an agreement with Union Pacific on a rail yard conveyance and clean-up, necessary for the Esplanade project to work, he said.

Likewise, nothing can budge until a (non-conditional) TIRZ is established for the project and a date set for the commencement of tax collection within the TIRZ, Marasco said. Other tasks awaiting action by the city include: responding to a January letter from IBWC early requesting a meeting with the city about the Esplanade project, and responding to a critical path tasking schedule submitted by LandGrant to the city, he said.

Responding to the commission’s April 16 conditional TIRZ approval, Marasco replied that everything about the project is conditional at this point.

“Everything still has to come together,” he said. “Where are we on the railroad? If the railroad doesn’t come forward it doesn’t work. Where are we on the formation of the TIRZ? If the TIRZ doesn’t come forward, it doesn’t work.

“If we don’t implement the contracts that we have with IBWC and DHS, it doesn’t work. So everything’s conditional. That’s the perfect word to describe where we are.”