THE OLD SIXTH WARD
REINVESTMENT ZONE                            

On December 22, 1998, at the request of the Old Sixth Ward Neighborhood Association and property-owner petitioners, Houston City Council enacted ordinance 98-1256 creating Tax Increment Reinvestment Zone Number Thirteen (TIRZ No. 13) over approximately 94 acres of land located immediately west of downtown.  The purpose of the Old Sixth Ward TIRZ is to advance the improvement of the historic Old Sixth Ward neighborhood and to encourage the development of affordable and market-rate residential housing projects by financing public improvement projects.  Interlocal participation agreements have been executed with both the Houston Independent School District and Harris County. TIRZ operations are overseen by a  nine-member governing board of directors consisting of five city appointees, one school district appointee, one county appointee, a  representative of the area’s state senator, Mario V. Gallegos, Jr., and state representative, Garnett Coleman. Here is an early timeline.

The following was in the Old Sixth Ward Neighborhood Association August 2005 Newsletter. It's from Steve Kirkland, and is worth having posted to help explain where the money is.  I have heard several of a our neighbors ask the question why haven’t we seen new sidewalks, streetlights or streets? Didn’t we form a TIRZ for that purpose? Infrastructure improvements were one of the promises of the TIRZ, so, it is a fair question. The short answer is the costs of the improvements greatly exceeds the amount estimated in 1998 and revenues haven’t reached the original amount estimated. The original estimates were $5.5 million expenses and $13.7 million revenue over the life of the TIRZ. Current estimates are expenses of $26 million and $8 million revenue. What happened?

In all likelihood, the original estimates were optimistic in scope and price, but construction costs increased significantly during that time as well. The following chart shows the differences in costs.

Project Plan  Original Estimate  Current Estimate
Infrastructure  $2,400,000 $21,113,002
Sidewalks $240,000 $2,935,200
Washington Courtyards $100,000 $112,666
Washington Avenue Streetscape $650,000  NA
Street lights/signs $22,000  NA

Parks 

 $134,000  NA
Historic Revolving Loan Fund  $1,000,000  
Dow School $428,000 $1,342,630
Zone Creation $60,000 $60,000
 Zone Administration  $500,000  $1,000,000
TOTAL EXPENSES $5,534,000  $26,563,462

As you can see, infrastructure and sidewalk costs are ten time the original estimates. The lines for parks, loan fund and the Dow school do not match nicely to categories in the original plan, because, the Dow acquisition included park acquisition for the adjoining park and some part of the price should allocated to that part of the plan. While the Dow School acquisition was not envisioned in the original plan, as you can see from the chart it is not a big driver in the increased costs. Infrastructure is the driver.

On the flip side, revenue has not met expectations either. While valuations have greatly exceeded estimates, the original project plan did not cap the participation of Harris County or HISD which both entities ultimately required. The Revenue chart is set out below.

  Original Plan Current Values
Increment Value  $42,802,000  $68,505,000
Cumulative City Tax Increment*  $3,594,322  $5,784,642

Cumulative County Tax Increment* 

 $2,251,721 $710,000
Cumulative HISD Tax Increment   $7,885,888 $1,877,690
TOTAL REVENUE  $13,731,931*  $8,372,332

* Includes educational facility and affordable housing set asides of more than $11 million.

So where do we go from here. The infrastructure estimates set out above are now two and a half years old, so they are probably short of what will be needed today. A case could be made that the City should contribute a greater amount of revenue to our infrastructure needs, given that some of the improvements required are driven by developments beyond our borders. An example is the required storm sewer capacity which must be enough to accept the run off from our neighborhood as well as rainfall collected uphill of the district.

Our plan contained several planks, of which infrastructure is but one. The other planks were affordable housing and historic preservation. Affordable housing has been addressed to some extent by Washington Courtyards. (Admittedly, more needs to be done, but real estate values have escaped the amount that would make affordable housing a viable expense, plus previous administrations refused to allow the TIRZ to direct the spending of the affordable housing set aside and instead has spent those funds in other areas.)

That leaves Historic Preservation, which can still be accomplished by the preservation regulations. The TIRZ has accomplished much on this front with volunteer efforts. We are near the point where preservation may become a reality, not just an aspiration. Hopefully, we will be successful soon.

Other News & Comments:

TIRZ Budget: The TIRZ board approved its draft budget for the '06 fiscal year at its quarterly meeting last February subject to amendments required by the city. Once the TIRZ board approved the budget, the TIRZ consultant and attorneys began working with city officials to see the budget through the approval process by which it is incorporated into the city's annual budget. This is a long and often arduous process that can involve many meetings and/or phone calls with city officials that neither the chair, the other board members, nor community members know about until after the fact. The update on TIRZ-related issues that I gave at the last OSWNA meeting referenced consideration of budgets for all 22 of the city's TIRZs (including the OSW TIRZ) by city council's fiscal affairs subcommittee. The TIRZ attorney and planning consultant were notified to attend that meeting prepared to respond to any budget-related questions that the committee members might have. Since the fiscal affairs committee was a public meeting, the meeting agenda was posted at city hall and on the city's website. Since the fiscal affairs committee meeting was not intended to focus on the OSW TIRZ budget, and since attendance by a majority of OSW TIRZ board members could have constituted a violation of the open meetings act, it was not posted as an OSW TIRZ board meeting. Final approval by city council of many TIRZ budgets, including the current Old Sixth Ward TIRZ budget, was posted on last week's city council agenda. (past budgets) 

On-Going TIRZ Business: Like any business, the TIRZ and its redevelopment authority exist to accomplish specific goals and projects which are enumerated in the project plan that has been approved by city council. The day to day pursuit of those accomplishments is conducted between the city and the TIRZ consultants, and reported to the TIRZ board and the community at TIRZ board meetings where decisions requiring board action are made in accordance with the public meetings act. Since neither the chair  nor any of our board members are commonly included in meetings that transpire between the city and the TIRZ attorneys and planning consultant, and since those meetings are not open to the public, the burden and cost of even trying to post them would outweigh any benefit that such postings could provide the community. Please remember that TIRZ board members are volunteers who donate their time and efforts to the community, that TIRZ consultants and attorneys are paid dearly for their work, and that every dollar paid to the TIRZ attorneys and/or consultants depletes the funds available for TIRZ projects.

PROJECTS  Here is the project plan.:
Public Improvements - The board purchased the historic Justin E. Dow Elementary School building from the Houston Independent School District for renovation and use by MECA, a community-based non-profit social service organization, and working to develop a master plan to guide future development. MECA is now undergoing phase one of the renovation. The TIRZ is not funding any of the renovation.

Additionally, the TIRZ has a 501c3 nonprofit organization that will allow it to acquire matching funds from public and private partnerships to help pay for infrastructure needs (as explained above).

Historic Preservation - The board now has a "Concept Memo" that will protect the historic resources housed in the Old Sixth Ward Historic District. The proposed area of protection is smaller than either the National Register Historic District (the first designated area) or the Municipal Historic District (the second designated area)  due to the loss of historic structures and/or modern, non-contributing construction.. These options will be discussed at three separate public hearings where input from stakeholders will be reviewed to determine a final plan for preservation.

Affordable Housing - The board intends to prepare an affordable housing plan  that will encourage and facilitate the development of affordable housing in the Old Sixth Ward zone.  Much of this may depend on the City of Houston's plans for housing. 

MEETING MINUTES:
1999 Minutes, 2000 Minutes, 2001 Minutes, 2002 Minutes, 2003 Minutes, Jan 04 BD RA, Feb 04 BD RA, Mar 04 BD RA, July 04 BD RA, Aug 04 BD RA, Feb 05 BD RA, April 05 BD RA, May 05 BD RA

Property Values for 1998-2001

BOARD MEMBERS:
Claude Anello, Chair, Patricia Garza, Larissa Lindsay, Steve Kirkland, Ann Guercio, Roland Tamez, Cynthia Card, and Alice Valdez, members. 

ZONE ADMINISTRATOR:
Parke Patterson, AICP
Parke Patterson Consultant
P.O. Box  994
Sugar Land, Texas 77487
(Tel.) 281-313-0995
(Fax) 281-313-0996

ZONE ATTORNEY:
Barron Wallace
Vinson & Elkins

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