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The EDC took care of the entire tax bill. We’re continuing to work with them as a partner.
SAN BENITO — The San Benito Economic Development Corporation paid back property taxes on a building leased to the developer behind a proposed multimillion-dollar project to build a hotel and convention center.
For the 2022 tax year, the EDC paid $32,513 on a building standing on three acres which Western Spherical Developers leased last June, Ramiro Aleman, the EDC’s executive director, said.
Earlier this year, the agency paid the delinquent taxes, including a $2,123 penalty, Cameron County Tax Office records show.
Aleman said the EDC paid the property taxes owed for the 2022 tax year as part of the agency’s partnership with the developer.
“The EDC took care of the entire tax bill,” he said during an interview. “We’re continuing to work with them as a partner.”
Lease payment in negotiations
Now, the agency and developer are discussing the payment of taxes on the building at 2550 W. Expressway 83 in San Benito, Aleman said.
Meanwhile, the developer will pay future taxes on the leased building, he said.
“Moving forward, yes, the company is responsible for the taxes,” Aleman stated.
However, he stopped short of discussing whether the developer has been paying the building’s monthly $1,000 lease payment.
“We’re still in negotiations of proper compensation,” Aleman said.
”There may be job creation — there’s potential capital investment,” he said, referring to an undisclosed project involving the building.
Paying back taxes
On June 24, 2022, Western Spherical Developers, the developers behind the proposed RGV Epicenter project, leased the EDC’s building for $1,000 a month, Aleman said.
At the time, Rebeca Castillo was resigning as the agency’s executive director after serving three years on the job.
When he who took over as the EDC’s executive director last October, he was unaware of the lease until he began reviewing the agency’s properties, Aleman said.
“When I started researching all our properties, that’s when I found there were apparently delinquent taxes,” he said.
On Feb. 10, the EDC paid the back taxes, he said.
Tax payments under discussion
Meanwhile, Linda Merritt, a spokeswoman for Western Spherical Developers, stated the developer is negotiating tax payments on the building.
“As a proactive step and as the property owner, the SBEDC paid taxes due for the property,” she stated. “Continued discussions between the SBEDC and the Epicenter development project include use of the property and consideration of tax payment responsibilities for the property.”
Background
In October 2021, Western Spherical Developers broke ground on the RGV Epicenter project as Charles H. Johnson IV of Chicago-based Johnson Consulting, representing the developer, said the $180 million first phase was expected to be “completely out of the ground and open (in a) 2025 or 2026 timeframe.”
The project’s first phase was expected to include a hotel and convention center, an entertainment center, a performance hall, restaurants, retail shops, office suites and a lagoon.
Meanwhile, David Miles, the project’s Friendswood-based developer, has cited the coronavirus pandemic’s supply chain crisis’ escalations of materials’ costs as a factor that’s led to the project’s delay.
What would become the city’s biggest economic development project would create 1,013 jobs along with an additional 1,077 jobs during a three-year construction period, Miles has told city commissioners during meetings.
As part of the three-phased project, Miles proposed the development of a sprawling “village” featuring two hotels, an entertainment center, a sports complex, restaurants and retail shops along with a five-acre “Crystal Lagoon.”
About four years ago, Tammy Huerta, daughter of the late Grammy-award winning singer Freddy Fender, helped spark talks with City Manager Manuel De La Rosa, Miles said.
Two House bills would help Miles fund costs through hotel occupancy tax revenue.
In 2019, city officials worked with former state Sen. Eddie Lucio Jr. and former state Rep. Eddie Lucio III to push for House Bills 4347 and 2199, which allow cities to spend hotel occupancy tax revenue generated through developments to fund construction of convention centers and sports and entertainment projects.
