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HARLINGEN — After officials worked months in the planning stage, some residents are standing opposed to a proposed project aimed at widening Grimes Avenue to tie into the city’s main trade corridor.
Earlier this week, city commissioners voted 4-1 to expand tax increment reinvestment Zone 1, running along parts of the city’s northern side, to include a 23-acre area along Grimes Avenue.
During a heated meeting, Commissioner Frank Morales cast the dissenting vote.
As part of a proposed project, officials are considering expanding Grimes from a two-lane to a four-lane extending from Loop 499 to FM 509, onto the trade corridor linking Valley International Airport and the Harlingen Industrial Park to the Port of Harlingen.
But like Morales, some residents are opposing the city’s proposed funding of the project, which would extend Grimes out of the city limits and into Cameron County.
Residents speak out
During a meeting’s public comment period, resident Desi Martinez told commissioners he stood against any plans to dip into the tax zone’s fund balance of $1.4 million, questioning whether the City Charter gave officials authority to fund projects outside the city limits.
“Is the TERZ money allowed under City Charter — the revenue part — the 57 percent?” he asked commissioners during the Aug. 16 meeting. “Can it be used outside the county limits? That’s a legal question that I hope you answer and the auditor reviews.”
While Martinez argued the Texas Department of Transportation funds county road projects, Commissioner Michael Mezmar said the state isn’t funding road projects.
“It’s important to the airport, it’s important to the port, but it’s a county project,” Martinez told commissioners. “All you’re doing is extending a 150- to 200-feet right-of-way to build a county road.”
Although officials haven’t earmarked money for the proposed project, Martinez argued City Manager Gabriel Gonzalez planned to drain the zone’s fund balance, wiping out chances for any economic development projects within the 1,536-acre swath running along parts of the city’s north side near Loop 499.
“The $2 million that he’s requesting that will deplete the TERZ 1 fund till 2027 … will completely defund any TERZ activity in the existing boundaries,” he told commissioners.
Martinez also argued the proposed project would benefit District 1, where the tax zone is located, while officials would neglect the city’s remaining four districts.
“We have to do this right,” he said. “We’re doing the same thing of catering to politics, and we shouldn’t. This money belongs to the taxpayers of Harlingen.”
Taking the podium, former City Commissioner Robert Leftwich, who sits on a tax zone board, told commissioners the proposed project would develop “a road to nowhere.”
“The TERZ is a reinvestment zone,” he told commissioners. “The fact is the boundaries that you guys are extending in the TERZ — they’re all in the county.”
Meanwhile, resident DawnRae Leonard proposed commissioners and the TERZ 1 board consider funding drainage upgrades along Business 77 and Commerce Street.
Morales stands against plan
During discussion, Morales told commissioners residents in the proposed project area also oppose the road’s expansion.
“Obviously, there’s some opposition to this,” he said. “When we first discussed this a while back, we had plenty of residents from that area opposed to it.”
Meanwhile, Morales said he’s opposed to using taxpayer money to fund what he described as a county project for which the city would put up most of the money.
“I strongly believe that these funds should be used in another area other than providing this to this county road,” he told commissioners. “By the numbers that I looked at, we’re looking at 70 percent of the city’s cost and 30 percent is the county’s. That’s a lot of funds that are going to go out there to that project.”
Economic development project
In response, Mezmar described the proposal as an economic development project in an industrial area posed for growth, adding the tax zone’s board approved the zone’s expansion.
“It’s not a road to nowhere,” he told Morales, adding, the state transportation department isn’t funding road projects.
“We cannot have TxDOT take that road because TxDOT is not accepting roads,” Mezmar said. “We have to do it along with the county.”
“This is a valid use of that property, and if you don’t grow you will die,” he told Morales. “The city has to plan for the industrial complex south of Grimes Road and for the airport for companies that want to come in. Aerospace companies and other companies that want to come in — they need access. They need access to four-lane highways for big trucks and things to move to get on Ed Carey to go up to the interstate to deliver things. If you don’t plan for the future, you’re doomed not to have a future.”
Before the coronavirus pandemic’s outbreak in March 2020, an aerospace company was planning to open a plant next to Valley International Airport, where officials are working to develop an aerotropolis, a 480-acre site planned to draw businesses tied to the aeronautics industry, Mezmar said.
“What you guys don’t understand is just before COVID, we had a major aerospace manufacturing company coming to Harlingen on the east side of the airport — and they do stuff in big ways for Boeing,” he said. “Then COVID hit, international and national travel plummeted, people weren’t flying, Boeing shutdown making airplanes and this company said we’re not coming to Harlingen.”
No money on the line
Amid discussion, Gonzalez told commissioners their vote in favor of the expanding the tax zone’s boundaries wouldn’t trigger funding the proposed Grimes expansion project.
“I’d like to point out to the commission that this particular line item or action item does not allocate money to the Grimes Road project,” he said. “It simply lists this as being eligible for funding in TERZ No. 1.”
Instead, the commission’s vote would put the proposed project on a list, Gonzalez said.
“Right now, there are about seven or eight projects on that list,” he said.
Now, the list includes upgrades to streets including Washington Avenue, Rio Hondo Road and Austin Street, a soccer complex development project along with water and sewer extensions, with costs totaling $30,713, city records show.
Proposed Grimes expansion project
For months, officials have been considering funding the Grimes expansion project, with options including dipping into Zone 1’s revenue stream, Gonzalez said in an earlier interview.
As part of the proposed project, materials’ costs are projected to run about $1.6 million, he said.
Meanwhile, Cameron County officials are considering pitching in $2 million worth of labor along with an engineering design study, he said.
In 2006, city officials created three tax increment reinvestment zones aimed at generating property tax revenue earmarked for economic development.
Today, while Zone 1’s revenue stands at $1.4 million, Zone 2, stretching across 1,183 acres along the city’s northeast near FM 509, has generated $2.58 million, while Zone 3, running across 570 acres along the city’s west side near Interstate 69, has a balance of $507,688.
Tax increment reinvestment zones are public financing tools used to help fund economic development projects in which properties’ assessed taxable values are frozen based on the theory those values will increase. The increased property taxes collected would make up the increment.
The proposed Grimes expansion project would mark the first time officials dipped into tax zone revenue since 2016.
In 2016, the city’s past administration pulled $1.6 million from the city’s three zones to help fund the purchase of eight acres of land on which sit the Harlingen Convention Center and the Hilton Garden Inn.
The project to build the convention center marked the first time the city’s pulled property tax revenue from all three zones.
At the time, Pete Smith, a city-contracted tax attorney in Dallas, gave officials a legal opinion stating tax law allowed the city to fund the land purchase through the three zones’ revenue because the convention center would benefit the city’s overall economy.
From about 2010 to 2016, the city drew about $625,000 from Zone 3 to fund two projects to help develop the Harlingen Heights and Harlingen Corners business areas, officials said, adding about $380,000 has been spent on a project aimed at upgrading the Harlingen Corners shopping center area.
In 2012, officials used about $228,000 to upgrade Teege, Brazil and Bass Pro West roads as part of a project to develop the Harlingen Heights business district, officials said.
