Houston, TX. Developer & Wal-Mart Get $6 Million Bail Out From Taxpayers
On July 3, 2010, Sprawl-Busters reported that city of Houston, Texas not only has no zoning, but apparently it thinks rich developers need public welfare to make their projects work. A Wal-Mart project in an area of Houston known as "The Heights" has reached a new height in corporate welfare.
Houston has at least 15 Wal-Mart stores within the city limits, including six supercenters. But the latest proposal for the "Heights" neighborhood in Houston has the common folk rising up, and the public welfare 'deal' is only making matters worse.
Houston Heights describes itself as a "diverse small-town community in the heart of Houston where neighbors and businesses thrive, children learn and play, and history lives." For the past 37 years, the community has had a Houston Heights Association, a nonprofit organization formed to encourage and promote the enhancement of the Houston Heights community.
According to the Houston Chronicle. Wal-Mart wants to build just outside of the Heights, in what the newspaper calls the retailer's "most urban location" in the Houston area. Wal-Mart has indicated this year that it will focus its resources on breaking into urban areas like this one in Houston. "We are always looking for opportunities to serve our customers in Houston," a company spokesman told the Chronicle.
Wal-Mart's site plan shows a 152,015 s,f store, but the company would not reveal more about its plans. Part of the site Wal-Mart wants was once an industrial plant. According to the Chronicle, the regional grocery chain H-E-B had made an offer for the site -- but they were outbid by Wal-Mart. Houston has found a way to convert valuable industrial land into retail malls.
It was reported a couple of months ago that Wal-Mart Stores was under contract with a developer to purchase 16 acres of land. The announcement of the deal came only two days after neighbors of the store protested the plan before the Houston City Council.
The Council members apparently applauded the residents for "their proactive efforts and passion for their neighborhood," but then told residents that there was nothing the city can do. As one neighbor told Sprawl-Busters, "Houston has no zoning."
The company that owns the land, the Ainbinder Company, was even offered public welfare to build this project. According to the Chronicle, city officials are throwing tax breaks at the developer, despite the neighbor's opposition to the plan. It's one thing to tell residents you can't stop sprawl -- but its quite another thing to pay for it with public monies.
Staff to Houston Mayor Annise Parker told the newspaper that the city can use future revenue from the project to help the developer pay for the cost of widening local streets so they can bear more traffic generated by this huge project.
On July 30, 2010, Sprawl-Busters noted that the city was negotiating a 'deal' with the developer of the Washington Heights Wal-Mart that would reimburse the developer for as much as $6 million in public infrastructure improvements.
If the agreement is approved, developer Ainbinder Co. would widen and repave streets surrounding the project, refurbish bridges near the site, develop a bike and pedestrian trail along a stretch of Heights Boulevard south of I-10 and improve underground drainage, among other upgrades. The improvements were expected to ease traffic congestion as well as "prime the area" for other future developments, the developer said. But area residents don't see themselves as a pump ready to be primed.
The deal being negotiated is part of a program authorized by the state called a 380 agreement. It allows the city to grant or loan local tax revenue for economic development purposes. Once the project is built and has met certain performance requirements, Ainbinder would be reimbursed by the city from the increased property taxes or sales taxes created by the development.
Many Heights residents have opposed the plan since they learned of it in early July. About 500 people attended a public hearing this past week organized by Houston Mayor Annise Parker.
According to the Chronicle, about a quarter of those showed up wore red, symbolic of their opposition to the project.
When the head of the development firm was introduced, he was greeted with "murmurs that grew into boos." The developer said the Wal-Mart project would "provide a real benefit for the people that live around here," but that only provoked louder booing. The evening was a dog and pony show for Wal-Mart -- but the ponies never showed up.
Mayor Parker told one unhappy resident, "Tell me what I can do to make this project better for you?" But that unfortunate question led to several people shouting out: "Stop Wal-Mart."
One of the skeptics of this project is City Councilor Ed Gonzalez, who represents the area that is most affected by this huge development. "I feel the community has some questions that need to be answered in terms of traffic concerns and quality of life issues," Gonzalez told the newspaper.
The Mayor tried to downplay the fact that public welfare is going to the world's richest retailer -- and focused instead on the benefits she sees from the improvement to public infrastructure. But for local residents, the "improvements" are only needed because of the scale of the project, and more development does not lead to a better quality of life in a neighborhood where the Mayor does not live.
The Houston Chronic noted that "because Houston has no zoning, there are few tools at the city's disposal to wring concessions from developers." The Mayor was quoted as saying, "Our goal is to make sure that we get something from these developers that we would not otherwise get just as they go and do their own thing. It's leverage. It's a tool to bring them to the table."
But for many residents, the 380 agreement is not leverage -- it's just corporate welfare, a bail out for Wal-Mart, while smaller merchants get nothing. A bike path is hardly worth millions in public welfare.
The head of the development firm indicated that his company was ready to proceed with the project -- even if the 380 welfare sweetener does not happen. But he added, "We couldn't afford to do all the neighborhood amenities."
What you can do: The Mayor announced in July that she was going to set up a committee of residents and businesses to give neighbors a vehicle for blowing off steam. But this group has become a tool for the 380 agreement.
The Mayor made it clear from the start that she did not want to see this community group try to stop the project, "but to make sure that whatever goes in there, that at least we attempt to negotiate mitigations to potential neighborhood impacts."
Instead of mitigations, so far all the Mayor has done is throw public money at the project.
Neighbors continue to speak out against the Wal-Mart, warning of the increased traffic, the increased crime, and the changes this project will wreak on this unique neighborhood. A "Stop Heights Wal-Mart" page has been set up by neighbors on Facebook -- but Facebook never stopped a Wal-Mart.
Readers are urged to email Houston Mayor Annise Parker at firstname.lastname@example.org with the following message:
"Dear Mayor Parker, You are using neighbors as a tool to give Wal-Mart and its wealthy developer a major financial bail out. The money the developer puts into improving the roadways to their store will be paid back to them at public expense. Instead of getting money for Houston schools, or public safety costs, the increased property taxes go to the developer, not the taxpayers.
You can surely see how incompatible a Wal-Mart supercenter is with the character and land uses in The Heights? Houston already has half a dozen Wal-Mart superstores. It's not difficult to get cheap Chinese products from Houston-area Wal-Marts already. Large single story superstores do not make sense in an urban area. The suburban stores that Wal-Mart has built are bad enough -- but bringing them into an urban market is even worse.
All this proposed superstore will do is cannibalize its own superstores already in Houston, and not really create new jobs or revenue for the city. One study by the consultant Retail Forward indicated that for every one Wal-Mart superstore that is built, two area grocery stores will fail. Houston is already saturated with superstores.
If the Ainbinder Company and Wal-Mart cannot afford to pay for this project on their own, the city has no business offering tax breaks or public welfare of any kind. These are wealthy companies. You don't need to be giving more rich people public bail outs. Let the Walton family widen the roads, not the burdened taxpayers in Houston. If Ainbinder really wants this project so badly, condition your approval on the infrastructure improvements being paid for on Wal-Mart's dime. After all, it's their profits that are driving this project.
You are not giving tax breaks to the smaller merchants who will suffer as Wal-Mart grabs more market share. As Mayor, you should be focused on expanding Houston's job base, not merely cannibalizing it to suit some large national chain store."