The El Paso Public Service Board spent about two hours in executive session today discussing a proposal from REDCo that the city buy 1,000 acres from the PSB as a potential site for an automotive plant.
When the board emerged from the closed-door session, there was no public discussion of the proposal, which the head of the El Paso Regional Economic Development Corp. presented at Tuesday’s City Council meeting.
Mayor John Cook, who sits on the five-member PSB, later said the utility’s president and CEO, Ed Archuleta, “received direction to sit down with (City Manager Joyce Wilson) and negotiate a lease or purchase because the utility doesn’t want to stand in the way of this possible great economic development project.”
“The direction was given in executive session to negotiate,” Cook said. “We set no parameters and there was no discussion of the cost per acre.”
The mayor said the closed-door discussion was allowable because the Texas Open Meetings Act permits governmental bodies to have confidential discussions concerning the sale or purchase of real estate.
Cook acknowledged a fundamental problem with the proposal to have the city acquire 1,000 acres of PSB controlled land that would end up in private hands.
The problem is that a 1965 agreement between the city and the El Paso Public Service Board concerning the sale of property to the city states that it will be at the original purchase price plus 3 percent per year when the sale is “for the purposes of any other city department.”
The mayor said city bought the land in 1954 for $33.88 an acre. Adding 54 years at 3 percent per year, not compounded, would result in a per acre price of $88.77 and a potential sale price for the 1,000 acres of about $88,770. The market value of the land could be $20,000 per acre or higher, a potential total of $20 million.
Although there have been many land sales over the years, PSB still effectively owns more property than any individual or any other entity -- 28,848 acres or 45 square miles.
On Tuesday, REDCo’s president and CEO, Bob Cook (no relation to the mayor), told City Council members that the city has all the assets it would need to attract an automaker except one – a site.
REDCo has identified a site that would fit the bill – a 1,000 acre parcel owned by the PSB that is up against the New Mexico state line in far Northeast El Paso.
That land, which the city could ultimately give to an automaker or sell to one at a low price as an incentive for locating in El Paso, would not be for the purposes of any city department, as the city-PSB agreement states.
“No, it wouldn’t meet that condition,” Cook said, adding that problem would have to be addressed before the city could buy the property for less than market value.
“I have asked Ed to come up with a resolution with the city to address about future economic development projects,” the mayor said. “He needs to negotiate something and bring it back for action by the board.
“We want to resolve both issues: the sale for municipal purpose and for economic development.”
To reach David Crowder, write to dcrowder@epmediagroup.com or call (915) 351-0605
Jerry Kurtyka
November 13, 2008
"The market value of the land could be $20,000 per acre or higher, a potential total of $20 million."
Good, let's sell or lease it to the auto plant for its fair market value, and give them the red-carpet treatment in City Hall to expedite the process.
But no giveaways - land, tax or other public assets. Business gets enough from the taxpayers in this country, $700B lately, the wealth of an entire generation. Business needs to to pay its own way in the world, like the rest of us do.
Carl Starr
November 13, 2008
J.J. Henry Co. v. United States, 411 F.2d 1246 Interference with a property right that parties created voluntarily by contract, however, generally gives rise to a claim for breach of contract.
State v. Brewer, 141 Tex. 1, 169 S.W.2d 468 An agreement to convey property to a governmental authority for a public purpose has the same effect as a formal condemnation proceeding.
Rath, 160 Wis. 2d at 857 Deed contained a restriction that the hospital would revert back to the City if it ceased to be used for the health care needs of the community. The court concluded that the restrictive language in the deed created a binding commitment to use the property for a public purpose.
METROPOLITAN COUNTY v. SUNLINK CORPORATION,CASE No. 91-509 The general rule is that one of the incidents of the ownership of property is the right to convey it, and the law will not permit the rights of ownership to be fettered by the imposition of restraints by a grantor or testator who seeks to convey or dispose of his property and at the same time to maintain control over its alienation or use. The law seeks to encourage the ready alienation of property of all kinds and to discourage restraints on alienation that would have the effect of withdrawing such property from the ordinary rules and channels of trade and commerce. Consequently conditions that operate as restraints on alienation are held to be void as against public policy.
David
November 13, 2008
Oh, Oh.... It looks as if the games have started.
One only look at the methodology for calculating the Future Value of Money as determined at 3 percent per year (not compounded). Snce when is money not compounded. It looks as if the bar is being lowered (way down) to keep ciizens from throwing fits when te land is given away....
$20,000,000 ---- we've got to be dreaming to think we will ever see anthing close to that amount!!!!!!
Carl Starr
November 13, 2008
OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF TEXAS Opinion No. JM-997 1988 Tex. AG LEXIS 188 December 21, 1988 The Public Service Board of the city of El Paso is appointed by the city and has responsibility for administering the water system for the city and the bond issues supporting the water system. The lands in question have been designated Public Service Board lands, and the board holds them as agent for the city...Chapter 272 of the Local Government Code requires political [*8] subdivisions to comply with notice and bidding requirements before selling or exchanging land. Local Gov't Code § 272.001. These notice and bidding requirements do not apply to land conveyed to a governmental entity that has the power of eminent domain, but such land may not be conveyed for less than its fair market value...We finally consider whether article III, section 52, of the Texas Constitution prohibits the city of El Paso from selling the land...at less than market value. Article III, section 52 provides in part: (a) Except as otherwise provided by this section, the Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, [*9] association or corporation whatsoever . . . Tex. Const. art. III, § 52.
Juan Sandoval
November 13, 2008
Why not instead of giving the land away, like it is customary with the city’s tax dollars, lease it to one of these companies for, lets say 100 years or so, and keep the land
Carl Starr
November 14, 2008
Mark and Debbie Walker and Shell Road Golf Center, Inc., Appellants v. City of Georgetown, Appellee NO. 03-01-00151-CV COURT OF APPEALS OF TEXAS, THIRD DISTRICT, AUSTIN 86 S.W.3d 249; 2002 Tex. App. LEXIS 5409 July 26, 2002. The attorney general first noted that the sale or lease of land by public entities is governed by chapter 272. Id. He then explained that sales of public land are subject to the notice and bidding requirements of 272.001(a). The opinion does not address leases of public land, nor [*260] does it analyze subsection (a). Id....The City of Georgetown entered into a ten-year lease, with a ten-year renewal option, during which the City retains significant control over the use of the property. Under these circumstances, we conclude that section 253.001 does not apply to [**22] the City's lease of land to San Gabriel... The Walkers' first issue on appeal is that the City leased the land in San Gabriel [**26] at less than fair market value in violation of article III, section 52 of the Texas Constitution. See Tex. Const. art. III, § 52. The Walkers also argue that this provision, coupled with the statutes discussed previously, required the City to obtain an appraisal of the property. The City maintains that article III, section 52 applies only to gratuitous donations to private entities, and that because it leased the land for $ 400.00 a month, it has not made a gratuitous donation. We agree with the City.
GREGORY W. COLLINS, Appellant, v. EL PASO, TEXAS No. 08-96-00018-CV COURT OF APPEALS OF TEXAS, EIGHTH DISTRICT, EL PASO 954 S.W.2d 137; 1997 Tex. App. LEXIS 5162 September 25, 1997. The Office of the Attorney General has confirmed that Section 272.001 prohibits the conveyance of public land for less than fair market value. Op.Tex. Att'y Gen. No. DM-232 (1993). Unless the circumstances of a specific sale allow for the determination of fair market value by public auction, an appraisal is the only way to establish the fair market value that the statute requires. We conclude that an appraisal to determine fair market value constitutes an implicit requirement of Section 272.001(a).
Ken G
November 14, 2008
Carl Starr, not withstanding, the sale or long term lease of this property to an automaker would be a huge boost to El Paso's economy.