Montrose Becomes Houston's Newest Tax Increment Reinvestment Zone

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Like it or not, Montrose, y’all are getting a tax increment reinvestment zone.

The hell is a TIRZ? In brief, it’s a Texas-wide law that allows a city government to assign a portion of commercial property tax money to improve a neighborhood’s infrastructure.

A classic example of a TIRZ project: fixing a chewed-up sidewalk (and there are plenty of those in the Montrose). A not-classic version: fancy light poles and bus stops in Uptown.

It’s this “economic development” gray area that has critics up in arms about TIRZs and how they might be a complete waste of taxpayer money. Additionally, some say that City Hall is using TIRZs to steer money from the 2004 voter-approved revenue cap, which the City recently reached. These issues – and more – are discussed at length in our investigation into the subject that was published earlier this year.

Last week, after Houston City Council unanimously passed the ordinance, the Montrose zone became Houston’s 27th TIRZ. (Before the measure passed, we reached out to the office of District C Councilmember Ellen Cohen, who led the initiative. We were punted to Steven David, staff analyst in the Mayor’s Office of Economic Development, who provided the Press with a map and financial projections.)

“Over the past year, I have been pleased to meet with a multitude of neighborhood civic groups, local businesses, and faith organizations that represent the Montrose community to discuss the potential for a Tax Increment Reinvestment Zone for Montrose,” wrote Cohen on her website prior to a town-hall meeting on November 12 at the West Gray Metropolitan Multi-Service Center. “Together, we have crafted a proposal that will facilitate road repairs and other infrastructure improvements for this neighborhood without raising taxes.”

Jim Bartley, who owns several apartment buildings in Montrose, was one of the approximately 75 residents who attended the town-hall confab. Despite Cohen’s assertion that everyone she talked to wanted a TIRZ, an impromptu show of yay-or-nay hands from the attendees was basically split down the middle, according to Bartley, who fervently opposes the Montrose zone.

“The first time I ever heard someone say ‘TIRZ,’ it sounded like turds,” says Bartley, “and that’s exactly what they are.”

When a TIRZ is created, the collective value of the area’s commercial properties are locked into a dollar value. The fund can only grow through new commercial development and/or ensuing increases in annual property taxes paid by commercial property owners. (By law, a TIRZ cannot be funded by residential property taxes.)

“People don’t realize that it’s not an instant pot of gold,” says Daphne Scarbrough, owner of the Brass Maiden metal fabrication shop on Richmond Avenue, who recently attended a Montrose Management District meeting that was heavy on Montrose TIRZ talk. David Hawes, a co-partner of Hawes Hill Calderon, which collects excessive fees to run many of Houston’s management districts and TIRZs, also attended the meeting, which took place Monday.

Since the fund will basically stay empty for a year, Scarbrough says a proposal was made to the Montrose Management District board of directors: lend $45,000 to $50,000 to the Montrose TIRZ and the TIRZ will pay the management district back later. “It would be the first time I’ve ever heard of a management district lending money to a TIRZ,” she says.

Scarbrough worries that the money could be earmarked as Hawes Hill Calderon’s fee for managing the TIRZ. The Houston-based consulting business once invoiced the Montrose Management District $20,000 for its services. And that was just for one freaking month.

"Hawes Hill Calderon has not been hired to manage the TIRZ," David Hawes tells the Press. "The Montrose District advanced funds to pay for the creation services, which is very much different than management."

Whether the Montrose TIRZ is going to be awesome or not, the City might deserve some actual credit for not scheming behind the backs of Montrose’s residents. (Good job, City!)

In November 2014, the Midtown TIRZ nearly annexed choice parts of Montrose into the Midtown zone, which would’ve steered Montrose’s commercial property tax money to fund redevelopment projects in Midtown. Cohen was a co-conspirator in the scheme as well as a pincushion for 250 pissed off residents, who showed up on two days’ notice and laid into councilmembers Cohen, Dwight Boykins, and David Robinson.

“It was sneaky and there was a lot of backlash,” former councilwoman Sue Lovell told the Press in May.

The City eventually backtracked and left the matter alone until this November, when they apparently did its due diligence by canvassing the neighborhood and holding public meetings on the topic. It only took a year to do what they’re supposed to do.

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