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July 20th, 2009
Freethought San Marcos: Springtown proposal rises from the ashes

Freethought San Marcos: A column
by LAMAR W. HANKINS

Just seven days after the economic development incentives proposal was defeated by the San Marcos City Council 7-0, it is back on the council agenda. The agenda posted on July 15 for the council meeting for July 21 includes the following:

22. Presentation from developer regarding redevelopment of Springtown Center; discussion, consideration and possible approval of incentives for redevelopment of Springtown Center and authorize staff to finalize contract negotiations.

This item doesn’t appear as an item on the regular agenda, but on the Consent Agenda, which means it can be adopted along with other items on one motion and vote, without discussion or disclosure of the terms of the deal, though I would expect one or more council members to take the item off the Consent Agenda so that there will be a public discussion of the incentives proposal.

Whether members of the public will have an opportunity to express their opinion on a revised incentives plan for Springtown remains to be seen. There is nothing on the agenda about a public hearing on a revised plan and the public may not have enough time to learn what that plan is.

Why an item of such public interest would be placed on the Consent Agenda is puzzling. Under a city ordinance, the mayor is responsible for reviewing and approving the agenda, with assistance from the city manager, city attorney, director of finance, and the city clerk. Though the city council may direct at a council meeting that an item be placed on a subsequent agenda, there is no indication that the placement of the July 21 Springtown Consent Agenda item was done by anyone other than the mayor and the city manager.

What was clear from the July 7 meeting is that Mayor Susan Narvaiz strongly favored the Springtown incentives proposal, whatever it was, and had reckoned that she did not have a majority vote to pass it. She did her best to have the matter tabled, but that motion died for lack of a second. Much later in the meeting, the council met for a second time that evening in Executive Session and emerged after midnight to vote the Springtown proposal down unanimously.

As many people said during the comment period at the July 7 meeting, there is no opposition to the re-development of the Springtown shopping center as an entertainment district or for other commercial purposes. What most speakers opposed was providing the re-developers $5 million in interest-free loans, or any other kind of taxpayer giveaway for the re-development of the center as an entertainment area. The loan proposal would have cost taxpayers more than $2 million in lost interest. Most speakers at the meeting who discussed the quality of the jobs to be created by entertainment and retail businesses favored providing incentives only if they will produce living wage jobs, not minimum wage jobs, or worse.

Many speakers saw the proposed incentives as unfair competition with the downtown entertainment district. Entertainment venues in the downtown area would compete with tax-payer-subsidized entertainment businesses in a renewed Springtown shopping center, which puts the downtown area entertainment businesses at a serious competitive disadvantage, for which they are partly paying through their taxes and fees.

On Thursday, July 16, the Economic Development San Marcos (EDSM) board met in Executive Session “to discuss commercial or financial information that the Board has received from business prospects that the Board seeks to have locate, stay, or expand in or near the City, and with which the Board is conducting economic development negotiations.” The exact subject of their executive session meeting was kept secret.

At the end of that meeting, in public session, there was no public discussion, but the EDSM board gave direction to staff. That direction included preparing a new economic development package for Springtown that includes a $3.9 million, 6-year loan at interest 1% over the city’s cost of borrowing the money. No interest will be paid for two years, though interest will accrue during that period. Fifty percent of any increases in sales taxes over what is received by the city from Springtown Shopping Center in 2009 will be used to repay the interest on the loan and pay for architectural costs up to $600,000.

This means that a substantial amount of the sales tax revenue generated by the re-development activity at Springtown can be paid to the re-developer to cover the costs of the loan and architectural costs. If the project is successful, the re-developer will pay no interest and may pay no architectural costs. Those costs, which could run into the millions of dollars, will be paid by the taxpayers.

If there is any money left from increased sales tax revenue, some of that money can be used to fund the downtown master plan, but it is anyone’s guess whether there will be any money to share with the downtown’s re-development efforts, whether the council will allocate any money if it is available, and how much money it might allocate.

In the direction to staff, there was no mention of a previously reported Target-controlled Operating Easement Agreement that prohibits theaters, bowling alleys, nightclubs, and other retail uses from developing in the vicinity of the old Target location. Someone from the city should explain to the public how this issue will be resolved. There are other terms in the direction to staff. The entire direction statement prepared by EDSM Director Amy Madison can be viewed here.

In the council’s agenda packet, Item 22 on the Consent Agenda includes no backup paperwork. It appears now that we have some idea about the nature of the incentives that will be proposed for the re-development of Springtown. Mayor Narvaiz spent a very long time during the July 7 meeting talking about the importance of the economic development process. Her concern was not that the public had not been given specific information about what incentives were being proposed. Her concern was that someone had leaked information from an executive session about the Springtown proposal. She suggested that the information going around about the Springtown incentives was wrong. However, the council did not make clear at the meeting exactly what was being proposed. This is not open government. It is about as closed as government can get.

Taxpayers have a right to know in advance what propositions are being considered by its government. After all, it is the taxpayers who foot the bill for these giveaways. Members of the public cannot comment intelligently on secret proposals unless leaked information turns out to be correct. The extent of the secrecy involved with these proposals indicates one of two things. Either the city council does not want the public to be fully informed about what may be done with the public’s money, or the council is being poorly advised about how to manage information concerning economic development incentives.

There is no need for the level of secrecy in which this council is engaging. If the public is not told in advance what specific proposals are being considered, the public is unable to participate meaningfully in its government. This does not fulfill the purpose of the Open Meetings Act. Texas Attorney General Greg Abbott has written that “The Texas Open Meetings Act commits public officials at all levels of government to the principle of government in the sunshine. It is our legal guarantee that the public’s business is conducted openly and without secrecy.”

In spite of these noble sentiments, members of the San Marcos City Council believe that they can tell no one what is discussed in an executive session. However, the Texas Open Meetings Act “does not prohibit a member from discussing or making statements about what occurred in an executive session.” See AG Opinion No. JM-1071 (1989). What the Act does prohibit is the disclosure to the public of “a copy of the actual certified agenda or tape of an executive session.” See TEX. GOV’T CODE ANN. §§ 551.104, 551.146 (Vernon 2004).

The mayor’s concern about some breach of the executive session process is not based in law, but is based on her overbearing desire to keep the public ignorant as long as possible about what the council may do. Once an economic development proposal is formulated to be presented to the city council, it should be disseminated to the public far enough in advance of the proposed action to be taken so that members of the public can share their concerns with council members. Three or four days in advance is not enough time for all interested citizens to receive the information, digest it, and contact council members about their views of a proposal. If there is no public hearing on the proposal, there is not an adequate forum for public comment.

But the most bizarre aspect of the mayor’s remarks about a breach of the incentives process related to Springtown is that there was no breach. In the case of the July 7 Springtown incentives proposal, nothing said by any of the speakers during the public hearing was based on confidential or privileged information. All of the comments reflected information made public at open meetings of the EDSM board, contrary to the mayor’s allegations that there was a breach of the process. But not one council member has publicly corrected the mayor’s lengthy misrepresentations made at the meeting.

An informed citizenry is essential in a democracy. Unless the public is adequately informed with sufficient time to respond, it will have no opportunity to discuss the public’s business with its elected representatives. Of course, this may be just what this city council wants.

The new Springtown proposal should be discussed at the July 21 meeting and a vote on the proposal should be delayed until the next regular meeting so that all interested citizens have time to participate in the democratic process. A delay of the council’s decision about Springtown incentives until August 4 should not create a problem for redevelopment of Springtown. On July 7, the mayor was very willing to delay a decision on the earlier proposal. There should be no greater rush to vote on the new proposal. If the new proposal is turned down, the re-developer will be delayed at any rate.

© Freethought San Marcos, Lamar W. Hankins

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One thought on “Freethought San Marcos: Springtown proposal rises from the ashes

  1. Economic developement is now a part of any city. These guys are more transparant then other developers. The embassy suites thing snowed all of you. All Hammons had to do was say that he was building near the river and you people wanted the city to spend 10 million to move hime out. I forgot they spent that money to move him. Ask yourself why would a developer not want to be on IH 35. No one would have been able to find that hotel if it was built on that hill.

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