Harlingen City Commission Doublespeak-Downtown Parking Controversy!

A brief history so you know what is going on:

The Heritage Manor (Reese, Wil-Mont, Wagner Project) sat empty in downtown Harlingen for several years.  Jo Wagner, a local developer, decided to take on the $4 million dollar task of refurbishing the building to its former glory and develop a restaurant, condos, and office space in the structure.  The only problem was not enough off street parking was available to accommodate the owners of the 20 plus condos and office space renters.  City Manager Craig Lonon sat down with Wagner and came up with a plan for the city to purchase 2 lots adjacent directly south of the Reese building.  One was called the Toler Garage property and the other was called the Water  Works property.  Those 2 lots would be cleared and the city would then build a spacious parking lot with some covered parking spaces specifically for the condo owners and other VIP's of the Reese building.  A total of $500,000 dollars was committed to the project by the city (taxpayers money).  The other $250,000 for the project was to come from the Harlingen EDC and/or the Harlingen Community Improvement Board.  Lonon presented the above plan to the Harlingen City Commission on February 4, 2009.  The commissioners had a lengthy discussion on the issue and then agreed to purchase the 2 lots and build the parking area specifically for the Reese Project with taxpayers money..  The vote was unanimous and this committed the city to fund this project.  You can read the actual minutes from that meeting directly below.  As you can see the deal was approved and the money was allocated to build the parking lot.  Now fast forward to January 5, 2011 and read the minutes of that Harlingen City Commission meeting (below) and you will see that the commission for a second time is allocating funds to purchase 2 lots and build a parking lot in the exact same location.  The difference this time is that the city is not building the parking lot specifically for the Reese-Wagner Development, but just parking space for the general downtown area.  it is the exact same 2 lots and the same area where the parking spaces will be built but now it is for general downtown parking purposes.  You will see in the January 5th minutes that City Attorney Roxann Cotroneo stresses and makes clear that the parking lot is not for any specific downtown project.  A direct contradiction to what was agreed to in the February 4, 2009 city commission meeting.  Between the two meetings a total of $1,250,000 city taxpayers money is committed to this parking lot project and another $250,000 is implied to be spent by EDC/Harlingen Community Improvement Board at the February 4, 2009 meeting for a total of $1.5 million dollars.  This money is being spent to directly benefit the Reese-Wagner Project as clearly stated in the February 4, 2009 meeting.  In the January 5, 2011 meeting the city is trying to totally deny this fact.  Why? 

PLEASE READ THE MINUTES OF THE FEBRUARY 4, 2009 AND JANUARY 5, 2011 CITY COMMISSION MEETINGS CAREFULLY AND THEN WATCH THE VIDEO OF JANUARY 5, 2011 CITY COMMISSION MEETING BELOW:

OFFICIAL MINUTES OF FEBRUARY 4, 2009 CITY COMMISSION MEETING:

REGULAR MEETING CITY COMMISSION, HARLINGEN, TEXAS, FEBRUARY 4, 2009 

A Regular Meeting of the Harlingen Elective Commission was held on Wednesday, February 4, 2009 at 5:30 p.m. in Town Hall, City Hall, 118 E. Tyler Street, Harlingen, Texas.  
Those attending were: 

  Mayor Chris Boswell 

  Larry Galbreath, Commissioner Place 1 

  Bobby Farris, Commissioner Place 2 

  Jay Meade, Commissioner Place 3 

  Robert Leftwich, Commissioner Place 4 

  Tom Hushen, Commissioner Place 5 

Staff Present: 

  Craig Lonon, City Manager 

  Brendan Hall, City Attorney 

  Sylvia R. Trevino, City Secretary 

AGENDA ACTION ITEM-CITY COMMISSION MEETING FEBRUARY 4, 2009:
ITEM #7) Consider and take action to approve participation in the Heritage Manor 

Redevelopment Project (Reese-Wagner Project) and to commit funding to purchase property and increase parking for the project.   

PARTICIPATION APPROVED IN THE HERITAGE MANOR REDEVELOPMENT PROJECT (REESE-WAGNER PROJECT) AND FUNDING COMMITTED TO PURCHASE PROPERTY AND INCREASE PARKING FOR THE PROJECT 

Craig Lonon stated that Jo Wagner had submitted a proposal to the Harlingen Housing 

Authority to purchase and redevelop Heritage Manor (REESE-WAGNER PROJECT).  The redevelopment proposal requires that a third party provide adequate parking to meet the needs of their redevelopment plan.  The development proposal calls for a fine dining restaurant, a coffee shop, up to 10 offices and 22-23 luxury condominiums.  The investment is anticipated to be nearly $4.0 million. Mr. Lonon stated that to make it happen and for us to do the parking we need to secure 50 open parking spaces to support the offices, restaurant and coffee shop and 50 covered parking spaces for residents.  “Downtown parking at night is not a problem other than lighting might be required.  We have got to secure two areas of parking, one controlled and one none controlled. One way to solve this would be to build a parking garage estimated at $1.5 million and a second option would be to acquire additional parking in the areas---50 spaces at one and 50 at another.”   

Why should the City participate?  Mr. Lonon explained that for the past three years the City, the Housing Authority, Harlingen Downtown and many others have exhausted their ideas for the redevelopment of Heritage Manor.  No one else is interested in a  redevelopment project that complements downtown. The proposed project supports Harlingen First and Harlingen 100.  It increases the critical mass downtown, increases the night time population, and adds fine dining and professional office space.  Mr. Lonon stated that the project does exactly what we want it to do for downtown.  

Mr. Lonon further stated that currently the property is not taxed.  When it is developed it is anticipated that over $150,000 annually will go to taxing jurisdictions.  Mr. Lonon stated that for the first ten years after completion, the project should generate between $1.5-$1.7 million in local property taxes.  The project should generate between $750,000-$850,000 in sales tax for the City over the same period.  Total financial return to the community during the first ten years is between $2.25-$2.55 million. 

Mr. Lonon recommended that the City Commission approve participation in the Heritage Manor redevelopment project and commit up to $500,000 towards this project from the General Fund reserve.  At the same time, that the City Commission instruct the staff to seek partner funding from the Economic Development Corporation and the Harlingen Community Improvement Board to reduce the use of the General Fund reserves for this project. Further, that staff be instructed to prepare the paperwork to secure the funding for this project.  This action will commit the City to this project and encourage the developer to proceed immediately with this redevelopment project.

Commissioner Farris made a motion to accept staff’s recommendation.  
Commissioner Galbreath seconded the motion. 

Under discussion Commissioner Leftwich stated that he totally supports the project to get 

momentum downtown in terms of revitalization but he wants to make sure that the taxpayers are covered on the acquisition of the corner lot and the Waterworks lot.  Commissioner Leftwich asked that the investment by the City coincide with the investment by the developer so that the taxpayers are not stuck with a covered parking lot and a 40-year lease when the development does not get off the ground.  Commissioner Leftwich suggested an initial 10-year lease on the parking and then entering into a longterm lease as the project matures. 

Commissioner Farris stated that a ten-year lease would unfairly tie the hands of the 

developer because someone might not buy one of the condos knowing that in ten years he/she could lose their parking space.  He commented that if the developer is putting in $4 million and all the City is doing is agree to lease the land for long term 40-years to the 

developer, the lease could include safe language that the property would revert back to the City in the event the project was not developed.   

Commissioner Leftwich stated we’ve set precedence in other parts of the city where we only offered 10-year leases but for the protection of the taxpayers we would need to have an initial short term lease for 10 years with promise of a longer term. 

Mayor Boswell commented that it would be best to allow the lawyers to, in their best 

way, prepare the lease to protect the City even though Commissioner Leftwich’s point is 

very well taken.  Mayor Boswell stated that the lawyers could prepare the lease that will protect the City if the development does not occur, as it should.   

Commissioner Leftwich reiterated his point to make sure the City’s investment coincides 

with the investment of the developer so that the infrastructure then becomes value for the 

contractor and does not put in any more of his money into the project. 

Craig Lonon commented that in his discussions with Jo Wagner the City would secure 

the parking, they would design the parking and then it would be built with their facility.  

Ms. Wagner is talking about moving rather quickly and wants to open in November. 

Commissioner Hushen stated that the City needs to step forward as this is a real 

opportunity.

George Merrill commented that it is a great plan but his only concern, in serving in other task forces, that funding is necessary for development and redevelopment but long term there should also be future funding to increase the City’s police force and not forget the issue of public safety. 

The voting was unanimous on the motion. 

At this time Mayor Boswell gave special recognition to Blas Cantu, the Executive Director of the Harlingen Housing Authority, for his leadership in this project. 

** NOW FAST FORWARD TO THE JANUARY 5, 2011 CITY COMMISSION MEETING **

MINUTES OF JANUARY 5, 2011 CITY COMMISSION MEETING:

REGULAR MEETING CITY COMMISSION     HARLINGEN, TEXAS   JANUARY 05, 2011 

A Regular Meeting of the Harlingen Elective Commission was held on Wednesday, 

January 05, 2011 at 5:30 p.m. in Town Hall, City Hall, and 118 E. Tyler Street, Harlingen, Texas. 

Those in attendance were: 

 Mayor Chris Boswell 

 Gustavo C. Ruiz, Commissioner District 1 

 Robert Leftwich, Commissioner District 2 

 Kori Marra, Commissioner District 3 

 Jerry Prepejchal, Commissioner District 4 

 Joey Trevino, Commissioner District 5 

Staff Present:

 Carlos Yerena, City Manager 

 Roxann P. Cotroneo, City Attorney 

 Sylvia R. Trevino, City Secretary 

AGENDA ACTION ITEM-CITY COMMISSION MEETING JANUARY 5, 2011:

ITEM #4-e)  Consider and take action to adopt an ordinance on final reading to amend the city's 2010-11 fiscal year budget to purchase real property, demolish a structure and construct a parking lot for use in the downtown area.

ORDINANCE ADOPTED ON FINAL READING TO AMEND THE CITY’S 2010-

11 FISCAL YEAR BUDGET TO PURCHASE REAL PROPERTY, DEMOLISH A 

STRUCTURE AND CONSTRUCT A PARKING LOT FOR USE IN THE DOWNTOWN AREA.    

Commissioner Marra made a motion to adopt the ordinance on final reading.  

Commissioner Prepejchal seconded the motion and it carried unanimously. 

The City Attorney clarified to the public that the property being referred to is outside the downtown district.  Commissioner Leftwich added that the properties are the two corner lots that were discussed at the last meeting.  

Chuck Lee stated that in the appraisal on the Toler property reflects possible contamination and that the property owner did not provide the environmental assessment.  He stated that there are three (3) monitoring wells on the property.  Mention was made that the underground tanks have been sealed. Mr. Lee commented that the EA report was not given to the appraiser and the client is being urged to hire an environmental investigator.  It was noted that should such 

contamination be found the appraiser could re-evaluate the property. Gabriel Gonzalez explained that Compass Bank did provide an environmental report and as long as they don’t do a water well the property is OK.  He further explained that the tanks have been buried according to TCEQ regulations.  He also added that TNRCC also knows that the tanks are buried and some of the reports have been submitted to EPA. 

Joe Rubio reminded the Commission that Sonny Villarreal, the owner of a local seafood restaurant, was ordered to remove the tanks that were on his property.  Mr. Rubio was not 

in agreement to amending the budget for a $4 million project and he asked where the 

money for the purchase of the property was coming from. Roel Gutierrez, Director of Finance, replied that $500,000 was coming from the general fund balance and $250,000 from EDC. 
"Roxann Cotroneo explained that the purchase of the property was for downtown use and not specifically for use by the Reese project.  If it were for a specific project, a lease agreement would need to be drawn up."

JANUARY 5TH 2011 CITY COMMISSION MEETING
(video courtesy of Joe Rubio)

AND THE BIGGEST CONTRADICTION IS BETWEEN THE FEBRUARY 4, 2009 CITY COMMISSION MEETING AGREEMENT (ABOVE) TO PURCHASE THE LAND AND BUILD A PARKING LOT SPECIFICALLY FOR THE HERITAGE MANOR (REESE-WAGNER) PROJECT AND THE ACTIONS BY THE CITY COMMISSION ON JANUARY 5, 2011 TO PURCHASE THE LOTS AND BUILD A PARKING LOT IS SUMMED UP BY THE HARLINGEN CITY ATTORNEY ROXANN COTRONEO AT THE END OF THE JANUARY 5TH MEETING:

THE OFFICIAL MINUTES REFLECT, "Roxann Cotroneo explained that the purchase of the property was for downtown use and not specifically for use by the Reese project.  If it were for a specific project, a lease agreement would need to be drawn up."

WHAT A BUNCH OF B.S.!