SAN BENITO — This year, the city’s Economic Development Corporation won’t be tapping $2,769 to go toward drawing new business into town.
Instead, the money is going to pay back taxes.
On Tuesday, EDC Executive Director Rebeca Castillo stood in line to pay the 2021 delinquent taxes after the Cameron County Appraisal District denied the agency’s request for a tax exemption on a vacant building that stands as the agency’s first real estate investment.
Based on attorney Mark Sossi’s recommendation, the EDC’s board was holding off on making the payment, concerned taxing entities wouldn’t reimburse the money if the appraisal district granted the exemption.
On Monday, the board voted to pay up.
EDC doesn’t qualify for exemption
After reviewing the request, the appraisal district found the agency didn’t qualify for the exemption because the building at 2550 Expressway 77 was vacant, Chief Appraiser Richard Molina said.
“There’s no activity that they were doing,” he said. “They have to be performing a service there.”
It wasn’t the first time the district denied the EDC’s request for a tax exemption on the building, he said, noting it rejected a similar request in 2019.
New documentation requested
However, Castillo said the EDC had presented the district with documentation showing the agency was using the building to help draw new businesses.
“We felt we could justify the exemption. We submitted new documentation that we were trying to attract an investor or developer to activate the property,” she said, referring to the agency financed through sales tax revenue earmarked to fund economic development. “We feel it doesn’t make sense that we’re receiving sales tax dollars and then using that money to pay property taxes when it could be used for economic development for the city.”
Officially denied
Earlier this month, Eliza Valle, the appraisal district’s taxpayer assistance department manager, presented the EDC with the district’s official denial.
“We have determined the property/organization does not meet the requirements as set forth in the law governing this exemption,” she wrote in a March 9 letter to Castillo. “Specifically, the property is vacant and thus not used exclusively by your organization to perform its primary functions. In an earlier application, your organization admitted that the property was not used exclusively to perform such functions. We have seen no changes to the use of the property since your earlier application.”
Planning to re-apply for exemption
Now, the EDC is counting on selling the building, then reapplying for the exemption, Castillo said.
In late 2003, the EDC bought the building for $690,000 — the agency’s first real estate venture.
After serving as the site of the Kids Round-Up Rehab, a physical rehabilitation center, officials have worked to draw a tenant.
