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Yahoo
27-05-2025
- Business
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Nueces County may join opposition to potential property tax exemptions
Nueces County may join other taxing entities in publicly opposing potential property tax exemptions related to a workforce housing program and a large electric provider — which, if granted, would likely impact property tax revenue collected for the public coffers. Among items on the Nueces County Commissioners Court's May 21 agenda is a closed-door discussion with attorneys on the Corpus Christi Housing Authority's and CPS Energy's 'tax-exempt issue, and all related matters.' The court could take action after that discussion, potentially echoing the objections of Del Mar College and the city of Corpus Christi. The court hadn't received preliminary projections of how much the potential property tax exemptions could affect the budget, but officials are 'doing everything we can as fast as we can to figure out how to put a stop to this,' said Nueces County Commissioner Brent Chesney on May 16, describing the implications as 'far-reaching.' No one wants to take legal action in the matter, he added, but that may be necessary to protect the interest of the county and residents. 'It's just too big a deal; you can't just lay down on it,' Chesney said. 'You have to go fight and figure this out because it's millions of dollars out of taxpayers' pockets.' Both the Corpus Christi City Council and Del Mar College Board of Regents made formal overtures May 13 to potential legal action related to a new workforce housing program spearheaded by the housing authority. The college's board additionally took a position of opposition against possible property tax exemptions related to the purchase of two power plants by CPS Energy, a San Antonio-based utilities provider. As part of a new workforce housing program, the housing authority acquired at least 13 apartment complex properties, according to officials, with others potentially pending acquisition. It amounts to at least $330 million taken off the tax rolls, according to preliminary appraisal values. Appraised values as of mid-May are not yet certified and are subject to change. Acquiring the properties makes them tax-exempt, Corpus Christi Housing Authority CEO Gary Allsup told the Caller-Times on May 14. As part of an agreement between the apartment complex owners and the governmental agency, the participating apartment complexes must make about half of their unit inventory available for workforce housing, he said. It's a mechanism that will fill a crucial gap in housing options for a segment of the population that is 'caught in the middle,' Allsup has said. In the case of housing, 'workforce' means individuals and families whose income is moderate — too high for low-income housing eligibility but not high enough to make market-rate housing affordable. The federal government's definition of what qualifies as affordable is a household spending no more than 30% of its income on utilities, combined with either rent or mortgage. The program, as crafted, is not directed toward low-income housing. The acquisitions, in part, involve the housing authority becoming an owner of the property's grounds, as well as a 'small-portion owner in the actual improvements to the property,' Allsup said. Of the workforce units, 40% are intended for households bringing in 80% or less of the area median income, and 10% are set aside for households earning 60% or less of the area median income, he said. Rent for units reserved for workforce housing are then adjusted to a price that is considered affordable for those income levels, he said. Critics have questioned whether the program meets legal and propriety standards and whether it meets the mission of the housing authority. They have also raised concerns about the impacts on the property tax revenue. Opponents have asserted that property tax exemptions would take off the tax rolls properties appraised in the millions of dollars, subsequently pulling millions of dollars of otherwise expected property tax revenue. Del Mar College officials have estimated that should properties be found tax-exempt, it would mean about $1.1 million in lost property tax value, while city representatives have put that number at about $3.5 million. The city, which had previously cited a projected deficit of about $7 million in its 2026 budget, has said if the housing authority's acquisitions were taken off the tax rolls, the deficit would reach about $10.5 million. May 13, the Del Mar College Board of Regents approved college representatives and legal experts to take the 'necessary and appropriate action, including the engagement of outside counsel, to protect and pursue the college's legal status and potential claims' related to the potential property tax exemptions for the housing authority's acquired apartment complex properties. The City Council took similar action the same day, producing a resolution approving city management to 'to use all administrative, legal, and legislative means to prevent the improper and/or illegal use of property tax exemptions by the Corpus Christi Housing Authority, affiliates, and entities connected thereto.' Allsup said May 14 that 'there continues to be a misunderstanding of what the law is and under what programs that this is done for.' 'There's certainly not anything that's improper, and nothing illegal, in the way that these deals have been done,' he told the Caller-Times. 'It's been very transparent.' Although an official analysis was not immediately available as of May 19, a Caller-Times review of preliminary appraisal district records suggests the amount in lost property tax revenue for the county may be more than $800,000. Chesney told the Caller-Times that the acquisitions and contemplated property tax exemptions would 'damage people everywhere under this disguise of calling it 'low-income housing.'' 'All we're trying to do is stop the bleeding since the issue has been brought to our attention,' Chesney said. With an anticipated parallel effect, the purchase of two power plants — the Barney M. Davis and Nueces Bay generation plants — may take millions of dollars off the tax rolls, officials have said. The two power plants combined are appraised at about $151 million, according to preliminary assessments. Because CPS Energy is considered a governmental entity — it is municipally owned by the city of San Antonio — those two properties, previously on tax rolls, may be accepted as tax-exempt, local officials said. Addressing the Board of Regents May 13, Del Mar College Chief Financial Officer Raul Garcia estimated removal of the plants from the tax rolls would translate to about $500,000 in lost property tax revenue. CPS Energy's 'vision for delivering modern, affordable, reliable and sustainable energy services may have been the key factors behind this acquisition,' he said. The board mirrored its action related to property tax exemptions on the housing authority's acquired properties, approving the enlistment of outside legal counsel to look into potential property tax exemptions for CPS Energy's two power plants. In a news release issued May 2024, CPS Energy had announced the closing of the sale of the natural gas power plants, previously owned by Talen Energy Corp. The document shows CPS Energy also closing a sale of a natural gas plant in Laredo. 'This action supports CPS Energy's generation plan, approved in 2023 by its Board of Trustees, to power the greater San Antonio community into the future by securing an additional 1,710 MWs that are available immediately,' the news release states. 'The addition of these units aligns with the generation plan, which includes the retirement of older coal and gas units and the addition of a blend of more efficient gas generation along with solar, wind, and energy storage.' Rudy D. Garza, president and CEO of CPS Energy, is quoted in the news release as saying the acquisitions represent a step in the entity's 'growing role as a regional energy utility, providing additional resiliency and reliability for our customers.' "This acquisition adds critical capacity to our generation portfolio to continue to reliably serve one of the fastest-growing regions in the nation,' he stated. 'Our customers will benefit from these investments for decades to come." In addition to San Antonio, CPS Energy also provides services to 'portions of seven adjoining counties,' according to the news release. Chesney contended that should property tax exemptions be awarded, it would prove to benefit only San Antonio. 'If someone's going to try to take money out of the Nueces County taxpayers' pockets and give it to the city of San Antonio, in the case of CPS, or give it to developers who are developing apartment complexes — that's not right,' he said. In a message to the Caller-Times on May 20, CPS spokeswoman Dana Sotoodeh wrote that 'CPS Energy is a municipally owned utility, owned by the City of San Antonio, and is a tax-exempt entity.' 'When the plants in Corpus Christi were acquired last year, those facilities were no longer subject to property taxes,' she wrote. 'We are collaborative partners with the communities in which we operate. We look forward to continuing our conversations with local leaders and working together productively.' It was not immediately clear as of the morning of May 20 whether city officials intended to take a position on the purchases of the power plants, or if money would be allocated for legal counsel. It was not addressed in the May 13 meeting. Early, non-certified appraisal records indicate the city's portion of taxes, if the plants are found tax-exempt, would be at least $400,000. For the county, the unofficial number would likely be at least $396,000, according to district documents. More: City, Del Mar College say Corpus Christi Housing Authority plan may cost them tax revenue More: Two years after tax dispute budget crisis, Texas law aims to protect local governments More: City of Corpus Christi may need to make $7 million in cuts this year. What will it mean? More: New apartments for the workforce class are coming to two defunct hotels. Here's how. This article originally appeared on Corpus Christi Caller Times: Nueces County may join opposition to potential property tax exemptions
Yahoo
27-05-2025
- Business
- Yahoo
City, Del Mar College say Corpus Christi Housing Authority plan may cost them tax revenue
Local officials are enlisting attorneys to look into tax exemptions for apartment properties acquired by the Corpus Christi Housing Authority — a program housing authority officials say will make more housing affordable, but a move taxing entities say will make big dents in their budgets. In all, appraised values for the 13 apartment complexes acquired by the housing authority total at least $330 million, according to Nueces County Appraisal District records — meaning that if the property exemptions stand as proposed, that taxable value would be taken off the rolls. City staff is estimating that the housing authority's property tax exemptions will amount to $3.5 million in lost ad valorem taxes, said City Manager Peter Zanoni, addressing the council in its May 13 meeting. It could be as much as $7 million, he added, should there be additional acquisitions. 'That's a lot of money — $3.5 million, up to $7 million — out of the general fund,' Zanoni said. 'It's a tremendous financial impact; it's not a rounding error. It's big money, and real money.' The city had previously been facing a projected deficit of about $7 million for the 2026 fiscal year, according to officials. When taking into account the possibility of additional property tax losses, estimates would push that number to more than $10 million. Corpus Christi Housing Authority CEO Gary Allsup said May 14 that acquiring the apartment complexes makes room for direly needed workforce housing — homes for people with moderate incomes too high to qualify for low-income housing but not high enough to afford market-rate prices. 'We have so many folks that are what we call 'caught in the middle,'' he said. On its website, the housing authority describes how 'many local families are paying more than 30% of their income on rent, making them 'rent burdened' and limiting their ability to afford other necessities or save. 'The (Workforce Housing Opportunities) Program addresses this by partnering with market-rate rental properties to create mixed-income developments,' it states. The housing authority acquires the apartment complex properties without monetary purchase, Allsup said, becoming an owner of the property grounds and also a 'small-portion owner in the actual improvements to the property.' The housing authority's ownership makes the properties tax-exempt for apartment complexes' management companies — what is considered compensation for an agreement that requires apartment complex management to make half of their units available for workforce housing, he said. Of those workforce housing units, 40% are intended for households bringing in 80% or less of the area median income, and 10% are earmarked for households earning 60% or less of the area median income, he said. The rental cost of the units reserved for workforce housing is dropped to a price that is considered affordable for those income brackets. The housing authority will garner some money from annual payments related to the land leases, Allsup said. The exact amounts were not immediately available May 14, but 'the housing authority is not getting rich off that,' he said, adding that any revenue will go toward other affordable housing programs. Several transactions for additional acquisitions are pending, Allsup said, which would bring the total number of acquired apartment complex properties approved by a past board to about 20. The acquisitions of the apartment complexes, should the proposed property tax exemptions stand, are expected to affect multiple taxing entities. May 13, Del Mar College Chief Financial Officer Raul Garcia told the college Board of Regents that the conversion of the private properties could impact the 2025-26 budget. "The combined appraised value of these properties represents a reduction in the college property tax revenue of approximately $1.1 million, which would offset tax revenues from other properties in our district," Garcia said. City officials in late April broke the news publicly that there would likely be a budget deficit in the upcoming year, at the time projected to be about $7 million. That figure had been landed on with the assumptions that the City Council would not raise the tax rate — currently about 60 cents per $100 appraised value — and by comparing forecast revenue to anticipated funding mandates, staff has said. At the time, Zanoni told the council that $7 million may not sound significant when accounting for the entirety of the budget, but to put it in perspective, the full budgets of some singular departments such as libraries, animal care services and code compliance are about $5 million each. It's believed now that the deficit may be closer to $10 million or higher, based on the housing authority's property acquisitions and prospective acquisitions, according to staff. Although housing authority representatives didn't reach out to taxing entities, the decision to acquire the properties was done not in secret but instead in a public meeting, Allsup said. Properties coming off the tax rolls will affect local entities' revenue, Allsup said, but he doesn't believe the $7 million cited by the city's staff is accurate. He suggested in an earlier interview that the impact would likely be around 1% of overall budgets. 'In order to make a huge impact in our community, in providing thousands of affordable housing opportunities, it seems like a reasonable expenditure to have that kind of impact,' Allsup said. 'This is for the public good,' he said. 'I really think that's where we should focus our attention here is, 'Does Corpus Christi need workforce housing?' And if the answer to that is yes, then we've helped with that. If the answer's no, then I think they're seeing different … needs than I see because I hear constantly that we have a huge need for affordable and workforce housing.' Questions about legality and impropriety have been raised. Following a closed-door session, the Del Mar College Board of Regents unanimously approved authorizing college leaders and legal experts to take the 'necessary and appropriate action, including the engagement of outside counsel, to protect and pursue the college's legal status and potential claims.' The City Council, subsequent to its executive session on the same day, issued a resolution that among other items authorized city management to 'to use all administrative, legal, and legislative means to prevent the improper and/or illegal use of property tax exemptions by the Corpus Christi Housing Authority, affiliates, and entities connected thereto.' The housing authority's actions 'may be illegal — we're looking into that — but it's definitely improper,' said City Attorney Miles Risley, responding to questions raised by City Councilman Gil Hernandez about using verbiage that includes the word 'illegal.' 'I agree that it's improper, maybe unsavory,' Hernandez said. 'I don't know if it's 'and/or illegal.'' Allsup, responding to the resolution adopted by the council, said he believes 'there continues to be a misunderstanding of what the law is and under what programs that this is done for.' 'There's certainly not anything that's improper, and nothing illegal, in the way that these deals have been done,' he said. 'It's been very transparent.' A new majority of board members who oversee the Corpus Christi Housing Authority were selected by Mayor Paulette Guajardo this week. The board of directors comprises five members who serve in two-year terms. Two new appointees replaced sitting board members whose terms had recently expired and who had been seeking reappointment, while another new appointee filled an open seat vacated by a former member who had moved, officials said. Dated March 14, a letter addressed to Allsup shows the new appointees as former mayor Joe McComb, former councilman Greg Smith and Judith Gonzalez-Rodriguez, a school counselor at West Oso Independent School District. The terms of Smith and Rodriguez-Gonzalez are shown as ending in April 2027. McComb is slated to serve a partial term that will expire in April 2026. Officials identified the two sitting board members who were not reappointed as Curtis Clark, shown on the housing authority's site as an assistant vice president at IBC Bank, and Christine Belin, who was serving a partial term. Allsup said May 15 that he was disappointed by the decision, adding that he believed the members who were not reappointed had 'done a great job.' 'I think the board has been effective,' he said, noting that the positions are held by volunteers. 'I think the board has demonstrated an excitement and a care for the citizens of Corpus Christi.' Guajardo asserted that there hasn't been adequate explanation about the recent housing deals, saying that greater oversight is needed for the housing authority to 'ensure that transparency (and) accountability are in place because these are public funds.' She praised the new appointees. 'I think the three of them together bring new leadership that's going to provide greater direction and transparency to the housing authority, and they're outstanding community volunteers. … They're going to be great assets,' Guajardo said. Caller-Times reporter Olivia Garrett contributed to this story. (This story was updated to add new information.) More: Here are some plans for the former Lozano Elementary School property More: City of Corpus Christi may need to make $7 million in cuts this year. What will it mean? This article originally appeared on Corpus Christi Caller Times: Corpus Christi, Del Mar College oppose housing authority program
