Posted: 03/29/2010
Author:
By J. Louise Larson news1@kilgorenewsherald.com
In a chicken-or-egg conundrum, economic development and infrastructure both have to come first.
That’s the vicious cycle experts are hoping to beat with a Tax Increment Refinancing Zone (TIRZ) to help Kilgore open a new business frontier on a 249-acre parcel near the corner of Highways 31 and Fritz Swanson Road.
Kilgore city council had a work session on TIRZ Monday, and Tuesday signed a Memorandum of Understanding to get the wheels of economic development turning with what is becoming a popular way for private industry and public entities to build together.
“It’s an economic development financing tool,” said Amanda Nobles, executive director of the Kilgore Economic Development Corporation after a Lions Club presentation on the TIRZ Thursday.
The name on the Memorandum of Understanding signed Tuesday by the city is the private development firm of Waterblastco Properties, LLC and Merritt and Wilcox Properties LLC representing the Merritt Groups and Mike Wilcox of Benchmark Services.
The dilemma the company faced wasn’t a small one. A large irregular-shaped 249-acre piece of ground, perfect for attracting businesses that have yards and frontage needs that might not fit into the more restrictive Synergy Park.
Additionally, Panola County is technically the epicenter of the most recent shale of geologic exploration — the Haynesville Shale — even though Kilgore remains the capital of the East Texas oil field by virtue of the many companies and equippers based here.
Without infrastructure, the cost of preparing the site for occupancy is too dauntingly expensive for private industry alone.
“They had put an option on the land and looked at the cost of developing the land. The city would require concrete curb and gutter streets, and they couldn’t justify the type of infrastruture the city requires,” Nobles said.
“Are we going to lower the city code? That’s probably not a good idea - so what can you do?” she asked.
Developers don’t qualify for economic development incentives. And companies the developer would hope to attract would be very unlikely to spend money on infrastructure, with other property already developed around the Oil Patch region of East Texas, Nobles said.
In an economy where the tax base has taken a hit, asking city taxpayers to fund more infrastructure would place a burden on the public.
After Merritt & Wilcox brought the idea in, Nobles recalled presentations done by TIRZ consultant Bill Calderon, who had helped cities as big as Houston set up the TIRZ arrangements.
“I called him up, he thought it would be a good fit, and he made the trip up here to help us see how (a TIRZ) would apply to this type of property,” she said.
The memorandum signed Tuesday says the City of Kilgore, the KEDC and Merritt and Wilcox Properties LLC agree to outline mutual interests with respect to development of the subject parcel and to cause the construction of a roadway or roadways within the parcel of land, and share the costs associated with the construction of the roadway for the first phase of development.
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