El Paso Texas Real Estate Daily

A Texas congressman, citing skyrocketing costs to build a fence along the U.S.-Mexico border, said Thursday he would push the next presidential administration for more cost-effective measures to control drug smuggling and illegal immigration.

U.S. Rep. Henry Cuellar, D-Laredo made the comments after a Rio Grande flyover to view efforts on the ground by U.S. Customs and Border Protection.

“Let’s regroup and provide border security in a smart way and not just waste the taxpayers’ dollars,” Cuellar said.

Rep. Michael McCaul, R-Austin,  who favors the fence, called for more state and local funding to bolster law enforcement efforts, saying, “What spills across our border is a problem for every community in Texas.”

A report released by the Government Accountability Office just before Congress adjourned in September said the cost of building pedestrian fencing has shot up to $7 million per mile from estimates of $4 million per mile in February.

Ralph Basham, the CBP commissioner, has said the cost overruns are the result of rising prices for steel, materials and fuel.

Cuellar said the increased cost should prompt a serious review by the next Congress and the incoming administration.

Local officials agree.

Eagle Pass Mayor Chad Foster, chairman of the Texas Border Coalition, said he wants comprehensive immigration reform, not just fencing, to stop unauthorized immigrants.

“We look forward to working with the new administration, whoever it may be, to provide real solutions that will finish the job of securing our borders and reforming a broken immigration system,” Foster said.

A goal to build 670 miles of fence this year under the Secure Border Initiative, undertaken by the Department Homeland Security, cannot be met, officials concede.

Lawsuits have contributed to the delays, particularly in Texas, where cities and citizens along the U.S. side of the border object to the fence construction, according to the GAO, the investigative arm of Congress.

Of the 122 border landowners who have refused to sell their U.S. property to the government for fence construction, 97 are located in the Rio Grande Valley, a GAO report said.

In addition, 20 of the Rio Grande Valley landowners are defendants in lawsuits filed by the federal government, on advice of Homeland Security Secretary Michael Chertoff, for condemnation or taking of property, according to the GAO.

Richard Stana, GAO director for homeland security issues, said in the report, “Costs are increasing, the life-cycle cost is not yet known, and land acquisition issues pose challenges to DHS in meeting the goal it set.”

Of the 670 miles of border fencing planned, 109.5 miles are located in Texas. A short stretch of fence near El Paso is completed, and other sections are under construction in Hudspeth County and Eagle Pass.

To date, fencing costs in Texas have reached $575.6 million, said DHS spokeswoman Angela de Rocha.

Rep. Silvestre Reyes, D-El Paso; Rep. Ciro Rodriguez, D-San Antonio; Rep. Ruben Hinojosa, D-Mercedes; and Rep. Solomon Ortiz, D-Corpus Christi, have also urged a complete review of fence construction.

Credits: My San Antonio

The city will use $8 million in bond money to remove a leaky fountain and fix the cracked floor on the plaza of the Judson F. Williams Convention Center, but property owners won’t pay for it.

The El Paso City Council agreed to use the revenue of the sale of the bonds to pay for the improvements, and to use the Hotel Occupancy Tax to repay the debt.

“Taxpayers in El Paso are not paying for the improvements,” said William Studer, deputy city manager.

Bonds will be sold over 20 years at an interest rate not to exceed 5.95 percent, which means the city could end up paying up to $14 million.

The higher-than-usual interest — which city officials deemed normal for this type of transaction — bothered West Side resident Ric Schecter, who said the proposed plan was not effective.

“It will cost you ($14 million) to do an $8 million project,” he said. “Certainly, you can find a better way to finance this project.”

City officials, though, said the sale of bonds is a viable way to fix the broken-down fountain near the Abraham Chávez Theatre and the cracked floor of the plaza that came as a result of water leaks in the fountain.

A $20 million expansion and renovation project of the convention center in 2001 included the cracked floor and fountain, but when money began to run out, those two projects were scrapped.

Still, Eastridge/Mid-Valley city Rep. Steve Ortega said getting the projects done is important because they will help the city attract more visitors. “To bring big conventions to El Paso, we need to make sure our facilities are up to par,” he said.

Credits: El Paso Times

What does $18.75 million have in common with the Regency/Foster proposed development at I-10 and Hawkins?

That’s the amount that Regency/Foster is asking taxpayers to approve as reimbursement to remove the “blighted building and bring the land to a developable state.”

Regency/Foster has stated that they need the money to compete with nearby shopping center owners on a level playing field. Regency/Foster is asking the city for $8 million and the county for $4 million over 10 years.

When you add up all the payments, including 9 percent interest paid over 10 years, it equals $18.75 million.

We believe the cost to remove the blighted building is between $1 million and $4 million, with the balance being an actual development subsidy and that Regency/Foster has generally overstated its costs.

We offered to help remove the blighted building if Regency/Foster withdraws its request for taxpayer assistance, but our offer has been ignored.

Other shopping center owners have come forward pointing out that the proposal favors Regency/Foster over other shopping center owners. We agree with them.

In 2001, we asked for taxpayer assistance to help redevelop the same property. The city said no tax subsidies for retail projects. What is the difference here?

We continually invest millions in Cielo Vista Mall and use our national resources to bring quality new stores like Banana Republic, Chico’s, Coldwater Creek, Coach, Bebe, Hollister, Zumiez, Skechers, Abercrombie, and Fossil to El Paso without any taxpayer assistance.

Our investment has paid off for us and the city/county. Cielo Vista Mall is a robust retail center visited by millions of people annually and contributes millions of dollars in sales tax and property tax revenue annually to the city/county.

It’s not right to use the tax revenue we and other shopping center owners currently generate to subsidize Regency/Foster.

The $18.75 million tax subsidy would be by far the largest tax subsidy ever granted in El Paso for any purpose. Such a subsidy will result in the developers having capital available to induce tenants to relocate to the new center, thereby creating new blight in existing shopping centers.

We also agree with nearby shopping center owners that the Regency/Foster proposal is bad business for the city/county. We believe Regency/Foster’s claim that they will be generating new tax revenue is grossly exaggerated.

In reality, the new center would transfer sales and property tax dollars from existing centers to the new center where those existing dollars are rebated to the developer, thereby reducing the city/county’s current revenue stream.

Consider that the site plan made public to date depicts a big-box-anchored strip center that would include many anchor stores already in El Paso.

We feel the type of project is the developers choice; we just don’t believe the current plan is worthy of $18.75 million in taxpayer assistance that favors one developer over all others.

Another concern we have relates to traffic. Recently, the city indicated that they would require a Traffic Impact Analysis (TIA) before granting “building permits.” We believe the traffic study should be completed, with a complete analysis of the improvements necessary and an agreement on who will pay to mitigate the traffic impacts caused by the new center before any incentive agreement is reached.

We recognize new developments are not responsible for existing traffic, but they are not allowed to make traffic worse. The TxDOT proposal to reverse the existing ramps does not mitigate the impacts on local streets and intersections.

Is the current proposal really worthy of $18.75 million in taxpayer assistance?

Credits: El Paso Times