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The Wal-Mart meeting at the GRB

Lots of sound and fury, that’s for sure.

The city is negotiating a deal with the developer of Washington Heights — a proposed Walmart-anchored shopping center near Interstate 10 and Yale – that would reimburse the local builder for as much as $6 million in public infrastructure improvements.

If the agreement is approved, developer Ainbinder Co. would widen and repave streets surrounding the project, refurbish bridges near the site, develop a bike and pedestrian trail along a stretch of Heights Boulevard south of I-10 and improve underground drainage, among other upgrades.

The improvements are expected to ease traffic congestion as well as prime the area for other future developments, the developer said.

The deal being negotiated is part of a program authorized by the state called a 380 agreement. It allows the city to grant or loan local tax revenue for economic development purposes.

Once the project is built and has met certain performance requirements, Ainbinder would be reimbursed by the city from the increased property taxes or sales taxes created by the development.

Many Heights residents have opposed the plan since they learned of it in early July. On Wednesday night, they continued to voice their concerns about a development they feel is incompatible with their neighborhood.

Besides the nature of Wal-Mart itself, the 380 agreement is probably the least popular aspect of this, from what I’ve observed. It’s bad enough that a Wal-Mart is coming in, the sentiment is, it’s even worse that tax dollars will be used to help them. The city’s position is basically that the 380 is one of the few tools they have to get the developer to do something it wouldn’t otherwise do, which is to say make infrastructure improvements. CultureMap summed this up:

During the Q&A, one Heights resident brought up an interesting scenario. What if they city refused to give The Ainbinder Company the grants through the 380 Agreement and the resulting Houston taxpayer money? Would they still build it?

The answer from Michael Ainbinder was, “Yes.” Except, they wouldn’t have to play nice without the 380 Agreement. They wouldn’t have to make any improvements to the drainage, traffic or plant as many promised trees around the lot.

If that’s true, then the choice is over how they build it. I think too many people still have hope they can kill this to contemplate that choice, however.

My question is what happens if there isn’t any appreciable increase in sales taxes after this gets built, and property values decline as residents fear? In other words, what happens if this Wal-Mart location, which you may recall will have two others not far away as well, fails to generate any of the revenue that the city would use to reimburse it for those infrastructure improvements? Can the city be forced to recompense them anyway out of other revenues, or is it just tough luck for Ainbinder? I hope it’s the latter, but I fear it’s the former. Anybody know the answer?

Or maybe there’s a third choice. Nonsequiteuse, who earlier had a brief summary of the meeting, has a suggestion:

Here’s what I propose. The executive from WalMart who spoke touted the company’s philanthropic largesse. I’ve been raising money in Houston since 1993, and have yet to secure a gift from WalMart. I’ve known about others who’ve gotten $200 or $300 gift cards, or a box of some supply or another, but nothing on a grand scale.

Time for WalMart to go big and acknowledge that they don’t need corporate welfare to turn a profit.

I’d like to see WalMart donate the cost of the infrastructure improvements back to the city. In essence, the city would not have to pay for the reimbursement to Ainbinder. The city actually has mechanisms in place to accept a financial donation like this. It could then be earmarked for donations to various projects and nonprofits directly affected by development in the central city.

I suspect we can file that under “When pigs fly”, but it would at least end the griping about “my tax dollars” going to Wal-Mart/Ainbinder for this project. You never get if you don’t ask, that’s for sure. Maybe at the next meeting, which a poster on the Stop Heights Wal-Mart page who was there till the bitter end said there would be (location TBD), someone should bring that up. Swamplot and Hair Balls have more.

UPDATE: Here’s another drawing of the proposed site. And see Mike’s comment for the answer to my question about the 380 agreement.

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8 Comments

  1. I do believe that Mayor Parker explained that only if tax revenues hit a certain mark would the city reimburse the developer for the improvements. If not, the developer is stuck with the cost.

    She did not say what that mark is. For it to be an actual fair deal, you would think the tax revenues would have to be greater by some percent than they were before so that the developer can show that the project actually increased revenues rather than transferred them from one store to another.

    Presumably, Ainbinder has arranged a sweet enough deal with Walmart on leasing costs that they’ll make money regardless, because I cannot imagine Ainbinder is offering to bear that risk for Walmart. In other words, they’ll earn enough interest on the up-front money from Walmart that they can eat the cost if the reimbursement doesn’t come in.

    I think people should continue to fight to stop Walmart completely, but Ainbinder indicated pretty clearly that his company will develop something, so as much as I hate to say it, the whole thing will be less traumatic if we have some control because of a 380 than if we don’t.

    Traffic will suck either way, but perhaps with the 380, when we’re all stuck at the lights on Yale and Heights, we will be stuck under the branches of stately oaks. Eventually. Once the trees mature. As long as the agreement calls for ongoing maintenance by the developer and not by the city. Grrrrrr.

  2. Martin says:

    After looking at the drawings of the planned development on Swamplot, we now know that this thing is going to be nothing more than another suburban-style strip center with a massive parking lot. The fact that they are throwing in few trees and jogging track doesn’t change the fact that this development is not pedestrian accessible, let along pedestrian friendly. What we are going to get is another Target on Sawyer.

    Houston is the 4th largest city in the country. The fact that this type of development still occurs in what the more urban areas of the city shows you what a mess this city is in terms of development standards. This site could have been developed into something different and help add to the increasingly urban nature of the Washington Ave area. Instead, it’s just another strip mall that belongs in the exurbs. Another missed opportunity to improve the quality of life in this city.

  3. Mike says:

    The mayor and Andy Icken (city’s chief development officer) answered the “what if they don’t meet the tax revenue targets?” question last night. If the development doesn’t generate the taxes (property or sales, it could be either or, presumably, both) then the developer won’t get paid. Presumably they would have 10 years to hit their targets though, since the city ordinance allows 380s to last that long. Icken said some payments of another 380, a performance-contingent $14 million grant to the Downtown Pavilions, haven’t been made because that development hasn’t hit all its targets (which were related to occupancy, I believe he said).

  4. I think the next bit of due diligence to do is to find out what the targets are to be sure they are a real increase instead of just a shift from other retailers to Walmart.

    I was wondering about Houston Pavillions, because the place does not exactly seem to be packing them in, so yes, Mike, thanks for that info.

  5. […] slide calls this project “extremely successful.” An Off the Kuff commenter, Mike, mentioned that Andy Icken, the city’s Chief Development Officer, said that Houston […]

  6. […] Houston blogger at Off The Kuff takes exception to the plot. Besides the nature of Wal-Mart itself, the 380 agreement is probably […]

  7. […] can see three videos on Mayor Parker’s YouTube channel from last week’s meeting at the GRB to discuss the Wal-Mart development on Yale. This includes the Mayor’s opening remarks and […]