San Marcos Mercury | Local News from San Marcos and Hays County, Texas

by SEAN BATURA

The city of San Marcos and Hays County have laid the groundwork to redevelop the former Hays County Justice Center and pay for other big-ticket capital projects anticipated downtown, including a planned commuter rail station.

View County property downtown in a larger map

Last month, the San Marcos City Council voted to capture some of the tax revenue from rising downtown property values and apply it to keeping the old grocery store-turned-hall of justice from becoming an abandoned eyesore at the entrance to the central business district. The funding mechanism they are employing to do this, a tax increment reinvestment zone, was approved in November by the Hays County Commissioners Court.

According to San Marcos city staff, the primary plan is for the county to find a deep-pocketed “master developer” who will demolish the 39,546 square-foot justice center and build a mixed-use center of up to five stories, with residential on the upper floors and retail on the ground floor. The concepts being batted around include civic spaces such as a plaza.

“Getting people living in the downtown area would be really nice,” said Matthew Lewis, the city’s Development Services division director. “It would be a really good infill and redevelopment idea.”

The tax increment reinvestment zone covers a 244-acre area stretching from Interstate 35 to the southern boundary of the Texas State University campus, the same area designated in April last year as the SmartCode zone. The TIRZ will collect 70 percent of city and county property tax revenue generated by valuation increases in the TIRZ since 2011. The TIRZ will expire in 2016 unless it is reactivated between now and then.

The TIRZ is expected to collect about $331,019 by 2017. If the master vision of a major downtown development on the old HEB property does not materialize, the funding will go toward other projects downtown such as the building of a commuter rail stop adjacent to the justice center, sidewalks, signs, bicycle racks, and stormwater detention ponds, among others.

The project’s backers include Downtown Association president Scott Gregson, who owns interest in the San Marcos Mercury, and the San Marcos Area Board of Realtors.

“A downtown site of that size could host an employer or help bring a significant amount of the most-needed use to downtown, which is residential,” said Monica McNabb, who co-chairs the Board of Realtors’ governmental affairs committee.

Last year, downtown property values increased seven percent, driven by recent investment such as Gregson’s Texas Music Theater, which opened last spring. Before last year’s appraisal uptick the value of all property in the TIRZ zone was $105,712,363.

The justice center is one of four downtown properties that the county is trying to unload after it moved most its office to the a new 232,000 square-foot building off Wonder World Drive.

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31 thoughts on “City commits downtown tax revenue to redevelopment

  1. Has anyone noticed that there are NO businesses in San Marcos geared towards the interests of its thousands of children and teens? No pizza parlor, arcade, game room, skating rink, miniature golf, laser tag, etc.? We have bars EVERYWHERE, in every area of town — what kind of message does this send our children?
    Yes, we have the activity center, with it’s limited hours and days open. We have the river, which has turned into an open-air bar. The skate park’s ok if you’re into smoking weed. And the bowling alley is choked with cigarette smoke. I drive a carload of kids to San Antonio, Seguin, Austin or New Braunfels every weekend because there’s nothing for kids to do in San Marcos.
    I wish the city would consider the needs of it’s own children before the needs of TSU students. Kick some money towards a developer who will do something for the citizens (our kids) who won’t book out of here next semester.

  2. Ok, correction. I wish the City would consider the needs of it’s own children as at least as important as the needs of TSU students (translate: the tax revenue gleaned from alcohol sales).

  3. Cameron-I hear what you are saying.
    Now I hear kids (even teenagers) are going out of town to nearby jumping(?) complexes. It would be nice to have a complex that was so unique it drew in out-of-towners and provided a mixture of entertainment for the kids (young and old).

  4. I haven’t heard about this project in a while – but here is a new family venue –

    San Marcos Record, San Marcos, TX

    August 30, 2011
    Family entertainment center is slated to break ground in January

    By David Short
    Staff Reporter

    — San Marcos may soon be home to a new family entertainment center that will bring with it 29 new jobs and an annual payroll in excess of $1.2 million.

    Ruckski Bowling and Entertainment Center is the concept of local businessman Fred Rucker.

    The estimated $20.3 million dollar project is tentatively slated to break ground in January with opening day on July 1, 2012.

    “This project will be unlike any other facility in the area, and will draw not only local crowds but lots of tourists and league play throughout the year,” Rucker said.

    “The 60 thousand-square-foot facility will have 48 total bowling lanes with 24 main lanes and another 24 set aside for VIP and kid’s themes. We will also have several meeting rooms, a sports bar and snack bars,” Rucker continued.

    Early renderings of the proposed facility show the bowling ball return carriage for the children’s area being a shark’s head with other aquatic theme elements throughout the room.

    A pilot himself, Rucker said the other activities at the entertainment venue will include helicopter tours and an indoor racetrack for both electric go-carts and radio-controlled racers.

    “RC racing is a growing sport. We will have a 1/5 scale track as well as hobby shop so those just getting interested will have a source for parts and cars,” Rucker said.

    Rucker, who holds two U.S. patents including an early one in cell phone technology, is no stranger to startup businesses having had several in the past including a flight school in Addison near Dallas that at its peak had 16 aircraft and multiple flight instructors.

  5. I would suggest that anyone who thinks San Marcos has demand for more kid oriented businesses take out a loan and open said business. How is this in the domain of the city? Who gets to decide what businesses are sufficiently kid-friendly and which are not? I happen to think we need an Indian Restaurant and another microbrewery or two…but I hardly want the city to mess around with pushing this on the rest of us. But then I also think the market should be left alone as much as possible and am in the minority.

    I also happen to think our town is a great place to raise a family, but then I spend more time doing free stuff with them like the parks and library (which in my estimation are as good or better as you will find in any other town of our size) . And my kids have hardly been damaged because they have seen bars all over the place. I don’t think they have really noticed to tell the truth. And I actually wish we would have more bars located all over the place like they do in Europe so people could walk to the places and would not need to get in their cars and endanger the rest of us…

  6. My point is that I wish the city would give the same incentives to attract family-oriented businesses as it does to others. I thought we were over-run with apartments, but now we’re getting more downtown? And I’d wager at least one of those downstairs retail businesses will be yet another bar.
    And Keith, while your kids may not have noticed all the bars, mine certainly have and lamented the fact that bars keep opening while the kids are left to their own devices. That’s why all our recreational dollars are spent out of town every weekend. I cannot name one kid- or family-oriented business in San Marcos. (And not every adult drinks alcohol as a form of recreation).
    As for Mary’s recollection of a family entertainment center slated to break ground in January — any more word on that?

  7. Well, there was an effort a couple years back to attract a group (using some of the very incentives that you mention) that would have brought a whole entertainment complex to the vacant Springtown property. It would have resulted in a Dave & Buster’s and possibly an Alamo Drafthouse as well as other options for the family, but the idea went over like a fart in church. Something about “protecting our downtown” if I remember correctly.

    We will never attract family friendly businesses to San Marcos if the existing adult-oriented businesses cry foul each time we try. I still fail to see how including a restaurant/arcade at Springtown would have caused the bars, used clothing stores, and head shops around the square any harm but you would have never known it from the hue and cry.

  8. I’m not a fan of incentives for hourly wage (low hourly wage) jobs. As I recall, that was a significant objection, and I suspect it still would be.

    I’d go to D&B, just like I’d go to the RC car track, in the post above. I don’t want to subsidize it with tax dollars.

  9. I think this kinda proves the point I was trying to make about incentives…who gets to pick which kind of business gets subsidized by the tax payer and therefore has their risks minimized and which one has to go it alone at a greater risk? Who is the arbiter?

    It seems if you are going to have incentives at all they must be doled out uniformly or not at all. But remember, whenever we give incentives the costs are passed along to everyone else for the public services and such that they require to run their business. I just think the whole idea is unfair and against the very principles of free market economics we like to tout about our country being so in favor of…once again, I understand I am in the great minority on this issue. I also think we should get more than a 5% turnout for a local election where your vote actually does count a great deal and we see how well that argument sticks.

    And Cameron I was not discounting your kid’s being dismayed at the lack of pizza parlors (Valentino’s doesn’t count by the way?) and whatnot, I was simply pointing out that I believe our town is actually a pretty nice place to raise young kids and that there is quite a bit of good stuff here too, despite what it lacks…not that I buy into such lists all that much, but Businessweek thought so as well. If I remember correctly we made the top 10 places to raise a family back in 2009…

  10. The utopian ideal of a completely free market is just that, particularly when we are competing with the likes of Austin and San Antonio, for those jobs. Incentives should be reserved for things that the city needs, lacks, and can’t seem to attract without them.

    Apartments and jobs sprinkling pixie dust on the tilt-a-whirl aren’t in short supply here, nor are they particularly difficult to attract.

    That being said, any incentives should be given out based on a well thought-out strategy, should be tied to performance, and the results should be measured, the same way that a business carries out its plans.

  11. We found that Business Week ranking amazing, amusing, and even a little sad, given the state of our public schools, juvenile crime and pregnancy rates, and lack of family-oriented businesses.
    I have lived and voted in San Marcos for 20 years. I do love this city, but I see so much more potential for it, and it’s discouraging to have to travel every weekend for entertainment other than the parks or the library.

  12. The Springtown incentives were proposed while the stench of the StoneCreek incentives still hung thick in the air. I think that had more to do with resistance than protecting downtown. And I heard whispers of Dave & Buster’s but never anything solid. I doubt we have the demographics to support one.

    As to incentives, consider a couple things. One, many cities dedicate part of their sales tax specifically to economic development but San Marcos does not. Two, incentives have become standard operating procedure for businesses locating in a community. Incentive packages are crafted based on number of jobs being created, new tax base and community need. San Marcos might as well get in/stay in the game because that’s the way it’s done now.

  13. I know the incentive boat left the dock a long time ago. That still does not make it right or fair. Since B&B’s have been in the news lately, lets say someone, whomever happens to be in the position to play Oz with our money if you will, decides that we need more B&B’s so we should give out some incentives…now (totally overlooking the issue that the costs will still be there and simply passed on to the rest of us and if that is fair or not — I say its not and to simply dismiss such concerns as oh well, its utopian to expect our policies to be fair is a bad argument) lets say we give out some incentives to bring in said B&B that the person with access to the ear of the folks holding the purse strings thinks is what the town needs and the market demands.

    So, we take tax payer $$$ and lower the risk for someone else to come and open up a B&B and someone takes the bait and they do so. Well, do we then turn around and give Crystal River a subsidy too, to lower their risk? Or must they be treated unfairly by the city using taxpayer money? What if there is only enough demand for one B&B in town, despite what the economic guru thought when hatching this whole scheme, and the new B&B forces the old one to shut down? Is that fair? We have now basically used the power of the state to close down a business at the expense of another?

    Or, what if we decide we need say some other entertainment place in town, so we subsidize their risk, they come in and shut down the dollar movie theatre because they consume their market share? Is that fair? My point is that this opens up so many avenues for using public money to prop one person up at the expense of the other…and that should bother all of us, because one day that other person might be you.

    And this is to say nothing of the potential for corruption should say a business person get in cahoots with some politician…look at the Racetrack nonsense in Austin for a good example of our politicians throwing our money around to make someone else rich…

    But, like I said, I know I am in the tiny majority that thinks this way. We are more than happy to let certain well connected people pick and choose how to spend public money to “create jobs” or attract certain kinds of jobs. I get it, I lose, lets continue to play Oz with our monopoly money. Heck, lets pay some consultant triple digits to give us some nice looking report to tell us about it. But, to act like an argument cannot be made against it because everyone else is doing it is basically the same one that many of the Founders made with slavery…well, maybe its not so good, but we can’t get by without it because everyone else has slaves too so lets just shrug it off…

  14. Stomp stomp. I don’t care about incentives and utopia and strategies. I want a Chuck E. Cheese! Huff.
    But enough from me — I gotta go gas up the van so all the kids and I can go to ZDT in Seguin tomorrow night!
    Y’all have fun at the bars.
    Snark. 🙂

  15. I don’t get it. Is the city going to sell the property flat out to a “deep pocket developer” in which case not sure where the incentive talk is about. Is incentive built into a good price on the property or separate from the sell of the property?

    Or is the city hanging on to the property and hmmm ‘sponsoring’ a developer (incentive$) who will come build private enterprise on it and the city gets money through sales/property tax revenue and the developer of course makes money on the business.

    Or (still confused) the city keeps property , hires developer to build something ‘civic’ for the city, and the property is removed from property tax roll and who gets the money generated since its the city’s?

  16. Keith, I’m 100% with you. Originally most incentives were limited by law to manufacturers. Then in the ’80s cities were granted the power to create “enterprise zones” in blighted areas where they could incentivize retail. Somewhere along the line the gates opened and the ability for cities to waive property tax, rebate sales tax, construct infrastructure, waive impact & tap fees, etc, became much less restrictive. It absolutely does what you say in the B&B scenario and it should be stopped. What needs to happen is for a deep-pockets business that has been impacted to sue a city and get this to the state supreme court. If we had right-thinkng politicians they would tighten up this crap. Unfortunately, it also crosses from state to state and if we restrict Texas cities we’ve effectively restricted Texas and we can’t level the playing field by restricting other states. So for the time being we have to play the game or lose BIG employers (Toyota, IBM) to other states with better incentives.

  17. I believe, in this case, the incentive is a TIRZ, which is a little different than the incentives we typically see. Depending on what the TIRZ covers, and how it is structured, it could be a pretty good fit.

    I think the incentives discussion above, was generally tied to other comments in the thread, not the original article.

    Yes, incentives have an element of unfairness built in, but that is how business is done. Companies sell their products at lower prices, when a customer buys them in large volume. They also sell them at lower prices, to get a foot in the door, where they think there may be more sales in the future. Companies sell products at a loss, to get the consumable sales. Companies give customers cash back for marketing, to get those products in use, and drive consumable sales.

    They don’t offer these deals to everyone who comes in and asks for them. They offer them, where there is a high probability that they will pay off. For each of the incentives I have seen, I can find a counterpart in everyday corporate sales.

    A big part of economic development, is selling the city to businesses. When the right business comes along, we sweeten the deal however we can. We can’t afford to sweeten the deal for every business. That’s where the unfairness comes in, but the reality is, resources are finite. (I’m not concerned about being unfair to Austin, or other cities, if that is what you meant).

    Whether or not we should be selling the city to businesses, what the right businesses are, and how far we should go, to sweeten the deals, is up to the citizens. That’s why we vote, and go to City Council meetings, and have discussions like these.

  18. Cameron – “the state of our public schools’? Our schools have improved and they are continuing to improve. We have great facilities – all new or newly remodeled facilities. Do you have children in SMICSD? If not, have you visited a school? I do have children at SMHS and I agree that our high school faces challenges with so many low-income students and there is room for improvement – however the graduation rate is up and this is the first year for the new “academy” organization at the high school. Let’s be supportive of the gains that have been made –

  19. The “challenges with so many low-income students” need to be met. Period. Yes, there have been improvements, but there is a long way to go.

    That’s a whole other discussion.

  20. I still stand by my view that we have a town with a whole lot going for it and one I am proud to call home. Not saying we don’t have our blemishes, but I think San Marcos holds up quite well when held up to comparable towns in terms of size. It sometimes seems like we lose sight of that…

  21. The TIRZ for downtown has been discussed for a longtime, and it is not for luring any particular business into downtown. It is for such things as infrustructure and beautification. I was president of the Downtown Association for a number of years. We wanted a TIRZ so we would have a pot of money that we (downtown) would control so we could be assured the trash would be picked up, ad the plants around the square would be watered.

    I generally agree with Kieth when it comes to incentives for businesses, however a city does have a responsibility for infrustructure.

    I am not going to discuss the schools here. I have no kids, and here are certain people who post on this sight that know alt more about this than I do. I will disagree with Cameron on the juvenile crime situation. Our juvenile crime rate is really quite low. Cameron, you will be taking your kids tonight to a town, Seguin, which has a higher juvenile crime rate than we do, and remeber, the most shocking juvenile crimes commited here in recent memory were commited by kids from Luling.

  22. I agree, there is a lot to love. I’ve never lost sight of that. I’m not too proud to say that we are not doing enough to lift up the large (majority) poor population in the city.

    It would be very easy for me to sit in my nice house on the hill, frequent my favorite bars and restaurants, go to my football games, etc., and turn a blind eye to the reality of what life in San Marcos is like for a lot of other people, many of whom have been the heart of this city for generations.

    It is unfortunate that we have to drive to another town to find an arcade, but it is not as unfortunate as the number of families who have to look to the food bank for decent meals for their kids, when school is out.

    I love this city. I love the people here, and I want them all to have the opportunities that I did/do. That’s all.

  23. @Larry, like I said, without knowing all of the details, a TIRZ seems like it could be a good fit here.

  24. Let’s get a major daytime employer in the vacant justice center and use the spot for downtown parking until we do.

  25. I doubt if they’ll find a buyer in 5 years. Very few people would want or be able to use that building. Tearing it down is expensive and filled with uncertainty such as asbestos. The county should tear it down now and give the property a clean environmental bill of health. Pave it and park on it until a user comes along. The TIRZ money should just about cover those costs. I believe it’s in the very restrictive river corridor so a developer has some risk there; if he tears it down can he go back with 100% impervious cover as it is today? Planning staff talks about a 5 story building but tall buildings have met a lot of resistance from the community in the past. Can you entitle it with zoning that allows 5 stories by right?

  26. Well said Ted. I would echo the sentiments toward our country and the rest of the world at large as well…

  27. When are in a hurry and typing fast you make typos, although alt for a lot is pretty bad.

    My view on the newly vacant buildings in downtown is that the old tax building, the old National Bank buiding from way back in the day, will go quickly. It is an achitectural jewel, I have already heard some rumors. The Records building at Hopkins and Guadalupe will be harder, but being on the square and having a little parking in back will make it marketable.

    the old Justice Center will be much harder to fill. If the city and county, the building belongs to the county, don’t actively market it I could see that sitting empty for a long time. During the interval between when it was the old H.E.B. it was used as a warehouse for the telephone company. Though I’m not thrilled with a warehouse being on the edge of downtown, but that would be prefrable to it sitting empty.
    Due to the decrease in elevation between the University, te square, and the old Justice Center, that is the one place you could build a 5 story, or maybe even taller, building without it blocking the view corridor.

  28. Another TIRZ boondoggle in the making. This is not about the old court house. Did you notice that the TIRZ covered 244 acres? Does the TIRZ have the authority to borrow money. We don’t know but my guess is that it does. This whole thing will eventually have a great deal of bonded indebtedness.

    The City is doing TIRZ’s for every whim that comes along on the theory that it is “free money”. Your tax dollar is going to go to cover the difference between the money going into the TIRZ and what the city wants in increased revenue. There is no “free money”.

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