Almost a month after the Waco City Council offered a $5 million incentive deal for an entertainment complex on the southern edge of Waco, the identity of the developers has not been publicly revealed, and a former mayor is questioning the need for incentives.
The proposed $25 million complex at the northeast corner of the West Loop 340 and Interstate 35 would include a bowling alley, a movie theater with at least eight screens and high-tech games, as well as retail and restaurant uses.
The city is offering a tax deal that could reimburse up to $5 million in sales and property tax revenue to the development over 10 years, through what is known as a Chapter 380 agreement. The work would include development of the entertainment venue on a 32-acre site while also paving the way, literally, for a multi-phase mixed-use project covering more of the 352 acres available, real estate agent Bland Cromwell and Waco Mayor Kyle Deaver said.
The Tribune-Herald has filed a request with the city seeking the identity of the principals of the project, who have not been publicly disclosed. Council documents refer to the developer as 35-06 LLC. State records show the limited liability corporation formed in 2013, and its manager is listed as Eric Wieser, with an address of 4301 Edmondson Ave. in Dallas. Tax records indicate it is a residential address.
City officials have said they are pursuing a tax increment financing zone to capture a portion of local property taxes, like the one that aids downtown development.
“This is not a commitment of $5 million up front,” Deaver said. “It is a reimbursement for meeting build-out requirements over a given period of time. This would involve sales taxes, property taxes or TIF-related funds for public improvements, or up to $5 million, whichever is less. We expect it to be less. What we have voted on, I think, provides incentives if they perform as agreed. They hope to get projects on line and paying taxes as quickly as possible, and we are proceeding with negotiations with that in mind.”
But at last Tuesday’s city council meeting, a member of the downtown Tax Increment Financing Zone No. 1 board, former Waco Mayor Malcolm Duncan Jr., raised questions about the city’s approach.
He said in a later interview that creating a TIF funding mechanism for a “single interest” such as the entertainment venue conflicts with precedent and policy. He said the state of Texas enabled TIF zones as a way to promote improvements in blighted areas that developers would tend to avoid. In cities such as Waco, they have contributed to renewal of downtown buildings and infrastructure.
Duncan questioned whether a TIF designation would be appropriate for a greenfield site on Interstate 35, and whether incentives are needed at all.
“The city’s website includes language that says the TIF strategy should be directed at blighted property where development would not take place within the reasonable future,” Duncan said. “Also, in our comprehensive plan, it is stated that long-term sustainable community development is most desirable where infrastructure already is in place, not stretching out to sprawl. This development is on the edge of the city limits, meaning assistance would serve sprawl as opposed to trying to contain it. We’ve spent so many years working on core developments. To go to the edge of the city limits, I question.”
Duncan said this site is in a dynamic development corridor, featuring Central Texas Marketplace, Legends Crossing and Baylor Scott & White Hillcrest Medical Center. The Waco Industrial Foundation controls an almost 700-acre tract in the city of Robinson directly across Loop 340 from the proposed development site.
The area has proven its development potential, and he recognizes the entertainment venue has the potential to improve Waco’s appeal, Duncan said.
“That’s fine. My wife is all excited about the new theaters,” he said. “But does that become the public’s responsibility? Quality of life? I think our efforts are defined more as serving the common good. I know this has been presented as a $5 million reimbursement, but it is still $5 million taken from our tax revenue. Some suggest that without the commitment of $5 million, the community would not see that $5 million, and more in the future, which is something to consider. But in middle of our talks about economic development, we discussed the goal of raising income. Creating minimum-wage jobs is no path to advancement. Is that really a viable economic development strategy? That is another part of my concern.”
Mayor Deaver said in an interview this week that he supports the incentives but takes Duncan’s questions seriously.
“Obviously I have tremendous respect for Malcolm,” Deaver said. “He and I have talked through his concerns, and we hope to meet again this week.”
Cromwell, the real estate agent in the deal, also said he wants to talk with Duncan.
Waco Councilwoman Andrea Jackson Barefield said she appreciates Duncan’s comments and that his input shows he “is still incredibly engaged and dedicated to the city.”
“I don’t know if there is a right or wrong way to incentivize this project, or not incentivize it,” Barefield said. “The people of Waco desire particular venues, and we have a responsibility to see if we can make that work. It’s not like that is the only incentivized project going on. We’re finding ways to bring business and industry to benefit the community as a whole.”
Waco Councilman Jim Holmes said applying incentives to a single commercial project “is a little bit out of the norm, but I still think it is worthwhile.”
Local investors are involved, and the site has plenty of interest, Holmes said.
“It’s a cow pasture, has been vacant forever, and it needs to be built out,” he said. “Potential projects coming in there are kind of entertainment oriented, and maybe will meet a local need and keep visitors in town another evening, another couple of days. They will visit the Silos, the Texas Rangers Museum, the Mayborn Museum, Cameron Park, and then move on to the game center for bowling, and hopefully some other things.”
The city’s economic development office suggested the council place several requirements on the developers to receive incentives. They include design and construction of the venue, completing the family fun center within two years, completing surrounding public improvements within two years, achieving the creation of a Planned Unit Development within eight months, and entering into a Master Development Agreement for the remaining 300 acres, according to city documents.
If the TIF zone does not materialize staff has recommended the city give the developer property tax breaks in addition to sales tax incentives during the life of the contract. These breaks of up to 70 percent would apply only to improvements such as streets, drainage, water and sewer utilities, lighting and landscaping and their impact on appraised values.
“This site needs improvements to be developed,” Deaver said. “It has drainage issues due to Cottonwood Creek, as well as utility issues.”
As proposed, the center would generate $28 million in annual taxable sales, and the city would receive an estimated $400,000 in annual sales tax rebates, plus an increase in property tax revenue.
Deaver said the city is not ignoring a second movie theater-related project announced for acreage between New Road and Loop 340 on southbound Interstate 35, near the Flying J travel center and Central Texas Marketplace. Houston-based NewQuest Properties is collaborating with theater giant Cinemark to develop a 143-acre site with restaurants, retail, living units and an entertainment venue featuring a 14-screen movie theater.
Cinemark spokesman James Meredith declined to comment on the possibility of a competitor across the interstate.
The city has has preliminary discussions with backers of the development on southbound I-35, known as Cottonwood Creek Market, and that he expects there will be more talks. No proposal for publicly funded incentives has been announced.
“We have been very careful not to favor one or the other,” Deaver said.
Woodgate Intermediate School librarian Beth Hair will tell you she has the best job in the school.
For her, there is no feeling quite like hearing students talk about a book they like. And she is not dissuaded by the “reluctant readers” who enter her domain of bright colors and full bookshelves. She knows she will convert them eventually.
But Hair is part of a breed whose numbers in many Texas public schools have taken a hit in recent years. Many districts have cut full-time certified librarian positions because of budget constraints, instead employing library aides at most schools.
This could be damaging to students. More than 21 state studies have found school librarians support student achievement, and schools with full-time certified librarians tend to have significantly higher test scores, according to the American Library Association.
Midway ISD, where Hair works, staffs each of its 10 schools with a certified librarian. Comparatively, Waco ISD employs librarians at just three schools: Indian Spring Middle School and both Waco and University high schools. The other 23 waco ISD schools have library or multimedia aides.
Midway ISD has about 8,260 students, while Waco has more than 15,000.
San Angelo ISD, which also has about 15,000 students, employs 10 certified librarians. Like Waco ISD, the West Texas school district has library aides at schools where it does not have certified librarians.
“Due to the 2011 statewide budget reductions, we implemented the practice of hiring library aides at the elementary level and keeping certified librarians at the secondary level,” San Angelo ISD spokeswoman Jennifer Crutchfield said. “We continue to look for innovative ways to meet the reading and learning needs of our students.”
Waco ISD officials cited similar reasons for hiring library aides instead of librarians.
“The district moved away from librarians at every campus to a mix of librarians and library/multimedia aides after the 2011 session, when the Legislature cut $5.4 billion from funding for public education statewide,” Waco ISD spokesman Kyle DeBeer said. “In some important ways, school districts still have not been made whole.”
In 2010, Waco ISD had nine librarians, DeBeer said.
In Texas, school librarians must have completed at least two years of teaching and have a master’s degree before becoming a certified school librarian, according to the Texas Education Agency website. The master’s degree does not have to be in library and information science.
The requirement for classroom experience gives school librarians the ability to understand students’ needs, said Nancy Jo Lambert, chairwoman of the Texas Association of School Librarians and a certified school librarian at Reedy High School in Frisco.
“A huge component of what I do in the school library is that I’m an instructional partner,” Lambert said. “I work with teachers on a regular basis on my campus to collaborate and co-teach lessons, activities and projects. There’s a lot a certified school librarian can bring to the table to impact student achievement in particular. I am always advocating for schools and districts to employ certified school librarians because of that expertise they bring in.”
The school librarians association supports staffing libraries with librarians and aides that work together to serve the school, Lambert said. There are no laws that dictate who can work in the library, but state library standards recommend having a certified school librarian.
Some library aides are making efforts to reach students in the way certified librarians would. Dana Telep, library aide at Hillcrest Elementary School in Waco, said students “absolutely benefit” from having certified school librarians because they have an understanding of how to find information and work with students.
While Telep is not a certified librarian, she holds a master’s degree in English that helps her understand what students need. Library aides in Waco ISD only need to have completed an associate’s degree or two years of study, according to a job description.
Aides earn $12.96 to $19.44 per hour, depending on experience, DeBeer said. With a 40-hour work week, that amounts to between $27,000 and $40,400 a year. Librarians make between $46,100 and $57,800 a year.
Lambert said some members of the Texas Association of School Librarians are aides who work just as much as certified librarians to help students. But certified librarians have the additional expertise of teaching and a librarian certification that separates them from aides.
Telep sees each elementary school class at least once a week in her cozy library with squishy chairs and quotations about the value of reading lining the walls above bookshelves. She aims to read a story aloud to each class because that is how students learn to read well.
Like Telep, Hair, the Midway librarian, works with students to match books to their interests and reading levels. They also work with teachers to find books that fit into their curricula.
“I’ve been in the classroom, so I know what works and doesn’t work,” Hair said. “The library becomes a classroom when they come in here. I am constantly teaching them about authors and how to find books. It’s not just checking out books.”
Some of Dawn Ramos’ students refuse to wear their eyeglasses, but that is not a problem when they read content on Bookshare, an online library that is free for Texas school districts.
Ramos, a reading specialist at McGregor High School and H.G. Isbill Junior High School, has been using Bookshare for about three years. Her students who will not wear their eyeglasses simply enlarge the text on their books so they do not have to squint.
Students also can choose to listen to the books, changing the speed of the reading at will. Bookshare has a feature that highlights each word as it is read to students so they can follow along on the screen.
Other Central Texas school districts will soon start using the program, as well.
Waco ISD piloted Bookshare last year with a special education inclusion teacher at G.W. Carver Middle School, district spokesman Kyle DeBeer said. The school district is working to increase adoption of Bookshare this year and will have a professional development session for librarians, library/multimedia aides and teachers on March 18.
Bookshare provides free training to Texas school districts as part of a partnership with the Texas Education Agency, Central Texas outreach coordinator Matt Hattoon said. The U.S. Department of Education provides Bookshare with money that allows it to offer free membership to any student with a reading disability.
Hattoon said a problem students often run into is an inability to decode or understand the words they are reading.
Those students take longer to comprehend what they are reading because they are busy trying to understand the words they are reading, he said. Competent readers decode and comprehend simultaneously.
“Bookshare gives everyone a fair shot,” Hattoon said. “It allows all kids in a classroom to read grade level material.”
Ramos encouraged other teachers to try Bookshare. She said the program greatly helps some students, while others cannot get past the digital voice that reads the text to them. If she has a problem with the program or needs advice on how to use it, she can call Hattoon and he will help for free.
“It’s going to be a good tool for several students,” she said. “If it allows them to access books they’ve always wanted to read and be able to get through them faster and be able to understand it, it’s worth it, even if it’s just one student.”
The Waco City Council last week blasted the Texas Legislature’s property tax plan, which would require local voters’ approval for municipal governments to increase property tax revenue by 2.5 percent or more year-to-year, excluding newly taxed property.
Council members voiced opposition to the proposal when Republican leadership in Austin unveiled it in January. The council renewed its rebukes of the plan after the city budget office evaluated how the lowered cap would have affected revenue if it had been in place in recent years.
Since 2014, the cap would have put $11.9 million in city of Waco property tax revenue in jeopardy, according to the city.
State law adopted in 1981 gives voters the option to petition for an election if a local taxing entity, which includes cities, counties and school districts, wants to increase revenue by 8 percent or more. The state proposal would reduce the threshold, known as the rollback rate, to 2.5 percent and make the election automatic.
“This will be absolutely injurious to our ability to provide the vital and essential services: public safety, infrastructure, code enforcement, and the other parks and libraries and the other amenities that benefit our citizens and improve the quality of life in our community,” said Councilman John Kinnaird, who requested city staffers conduct the study.
In 2018 alone, $5.2 million in city property tax revenue was beyond the 2.5 percent threshold, even though the tax rate remained flat. The year-over-year increase came solely through increases in property value. Revenue from newly taxed property does not count toward the proposed revenue cap.
“I would just suggest in the Legislature, if they are adamant about doing this, I would just hope that they might impose the same restrictions upon themselves and see how well they do their own job with the restrictions they would put on us,” Kinnaird said.
With local property tax revenue boosted by higher property appraisals, the city has invested in infrastructure with a $17.2 million street improvement program budget this year, up $7 million from the previous fiscal year.
Council members listed the street program, upgrades to parks and libraries, and body-worn cameras and new vehicles for the Waco Police Department as essential services paid for with property taxes.
Each council member described his or her opposition to the plan. Councilwoman Alice Rodriguez even said council members should run for state office.
“As I talk to people in the community, I hear them say, ‘Work on infrastructure. Try to get ahead so that as we grow, we’re prepared for that growth,’” Mayor Kyle Deaver said. “And we’re just trying to catch up right now. We’re not getting ahead. So to put an arbitrary 2.5 percent cap that doesn’t deal with inflation — as inflation goes up, we will be impacted severely by this — is just so irresponsible.”
State Rep. Charles “Doc” Anderson, R-Waco, said the 2.5 percent rollback rate is a starting point that could change as the legislative process unfolds.
“I definitely endorse that we have to get control of our property taxes, because it really is burdensome to people,” Anderson said. “In general, I support that. I can’t say I support the bill as written here because it’ll go through the legislative process. There will be amendments and what have you. So I don’t know what the final outcome will be.”
He said, in addition to the revenue cap reduction, the identical House and Senate bills protect taxpayers by making the appraisal protest process more transparent and requiring only a majority of appraisal board members to side with protesters instead of the whole board. He also said the Legislature must find a way to decrease property tax bills, not just slow growth.
In the bill’s current form, the tax rate would be set to cap revenue growth at 2.5 percent if voters reject a proposal for a larger increase.
In cases where property values are on the rise, an election could be triggered when officials want to keep the tax rate the same, or even cut the rate. That would have been the case in Waco last year.
Attempts to reach state Rep. Kyle Kacal, a College Station Republican whose district includes parts of Waco, were unsuccessful.
Deaver said the Legislature has also covered a lower percentage of school finance each year, leaving more of the education tax burden on the local level.
“You’ve got to educate yourselves about what’s going on here,” Deaver said. “Because this is a shell game, and there’s not any other way to put it. … Everybody needs to get engaged on this issue.”
McLennan County Judge Scott Felton said the state’s plan would limit services the county provides to taxpayers. Imposing revenue caps on local governments is unfair because the state Legislature is not adequately funding education, he said.
“This is a big political move by the very top of the state to show that they’re the heroes by placing blame on the local elected officials,” Felton said. “‘A waste of money.’ We don’t waste money. We address the needs of the community.”
The proposal runs counter to the Greater Waco Chamber of Commerce’s position that local control should be protected, said Jessica Attas, the chamber’s vice president for public policy. In an email, she said even a 5 percent cap indexed for inflation would be a fair compromise.
That route “could afford property tax relief to business owners while still allowing municipalities the room they need to plan for sustaining the economic growth and momentum we’ve been enjoying,” she said.
AUSTIN — The $44 billion Texas Permanent School Fund is the largest education endowment in the country, but the state’s public schools are seeing less money than they did decades ago.
The endowment, which was created in 1854, is sending schools an average of $986 million annually over the last decade, a significant drop from an average of $1.14 billion in the past 20 years, according to an investigation by the Houston Chronicle. It means that the fund has paid an average of $207 per student annually over the past 10 years, compared with $322 per student over the two decades before that.
The fund, which profits off the sale of state-owned oil, gas and land, distributed only 2.8 percent of its value last year, while many endowments aim for payouts of around 5 percent. If Texas’ endowment paid out 5 percent of a four-year average market value, the state’s public schools would have received about $720 million more in 2018.
The fund’s decline also comes as the state has seen a 2 million increase in the number of students over 30 years.
Republican Rep. Travis Clardy said the state’s public education funding system is “unrecognizable from where it started.”
The newspaper’s investigation identified several laws and constitutional amendments since 2001 that have changed how the fund invests and distributes money to schools.
The State Board of Education and the School Land Board are responsible for managing separate parts of the endowment’s portfolio. The School Land Board gained the power to collect and invest land income and oil and gas royalties and other revenue; it controls $10 billion of the portfolio. The State Board of Education, which controls $34 billion, is now in charge of deciding how much money to send to schools annually instead of automatically passing along all investment income. The Legislature also lifted constraints on how both boards could invest.
The two bodies don’t coordinate investments and they have fought in recent months over their investment strategies. The lack of a singular governing body to oversee the fund has led to infighting over which board gets to invest oil and gas money.
Over the past dozen years, the fund shifted its money from investments in stocks and bonds to private equity and hedge funds, which are riskier fields that yield potentially higher returns. The School Land Board has also been buying real estate. The change has resulted in a riskier set of assets, limited transparency and higher management fees.
The land board’s fees rose from $14 million in 2008 to $92 million in 2017, including carried interest. The education board saw its fees spike from $14 million in 2008 to $101 million in 2017.
“That means it’s not nearly as profitable as you’d think it would be because you’re paying so much more in fees,” said Buck Wood, a lawyer specializing in school finance.
The fund has also underperformed compared with other U.S. funds similar in size, structure or mission, according to the newspaper’s investigation. The newspaper found that the Permanent School Fund missed out on as much as $12 billion in growth.
Democratic Rep. Diego Bernal said the “strange turf war” between the two boards is distracting from the larger issue.
“No one is really saying what’s in the best interest of the kids,” he said.