City tables plan to expand Midtown development zone

Dec. 17, 2014Houston Chronicle

City Council on Wednesday shelved the proposed expansion of a Midtown economic development zone into Montrose and the Museum District amid complaints that the plan was rushed and did not include key neighborhood groups.

Critics say the expansion came as a surprise when it first appeared on council agenda this month, with some blasting the lack of community notice and others calling the plan a landgrab. After delaying the item last week, Councilwoman Ellen Cohen vowed to pull the expansion and go back to the drawing board.

After Wednesday’s council meeting, Mayor Annise Parker acknowledged key parties weren’t at the table to discuss the proposal, which would have wrapped 235 more acres into the existing Midtown tax increment reinvestment zone, including some business heavy corridors in Montrose.

“That’s one of those where we could have done a better job of communicating,” Parker said. “I need to own this because it’s internal. We didn’t go to the district council member in the expansion area.”

Within a tax increment reinvestment zone, property tax revenues within the zone’s boundaries are frozen at a base level. The amount collected above that level, known as the increment, is funneled back into the zone to pay for infrastructure and capital improvements in hopes of spurring private development.

Though originally created as an incentive to help eliminate blight, the city also has used TIRZs to help speed efforts in areas targeted for redevelopment. Critics have questioned whether isolating those funds to improve one area is better than distributing the money across the city, and others have called for greater transparency around TIRZ spending decisions.

The Midtown annexation focused on a piece of the Museum District and the areas bordering Richmond, Alabama and Westheimer as well as most of Montrose Boulevard.

Midtown Redevelopment Authority director Matt Thibodeaux said the improvements would have focused on improving Montrose and Richmond with an eye toward better connecting the Montrose, Midtown and the Museum District areas.

Civic group leaders sent out urgent emails when the plan first landed on council agenda this month, later testifying during public comment.

Doug Childers, a Montrose resident, told council he was “dumbfounded” and that “civic leaders were completely in the dark.”

“It is not acceptable for the fate of Montrose to be governed by the interests and priorities of Midtown,” he said.

Even some Midtown residents appeared surprised. Dan Barnum, who previously served on the Midtown Board of Directors, told council there was a “lack of transparency.”

“I am concerned that some of Midtown’s accumulated tax increment will be spent outside of Midtown when there is still much redevelopment and infrastructure rebuilding to be done (here,)” Barnum said.

Cohen and Councilman David Robinson held a community meeting Monday night on the proposal, encouraging residents to add their ideas and promising to start anew on any Montrose TIRZ plans. Cohen said the earliest any revamped TIRZ plans would come back to council would be sometime in the spring.

“A number of people and groups were taken aback by the fact that something was seemingly moving forward without their knowledge and approval,” Cohen said. “Personally, I feel the same way.”

In other TIRZ news, City Council unanimously approved a separate expansion Wednesday, adding almost 8,000 acres to the once tiny Gulfgate zone. That expansion includes streets and neighborhoods around Hobby Airport and Glenbrook Golf Course.