|EDINBURG, December 31 - The mayor of Edinburg is making another push to have Hidalgo County’s new courthouse built through a public-private partnership.
Richard Garcia says that if the county would enter into an agreement with a private developer a new courthouse could be built much faster and at less cost. In fact, he said, taxpayers would not have to pay for the construction at all in the beginning as the developer would build the facility and lease it back to the county. In time, he said, ownership of the building would revert to the county.
“My position is that a public-private partnership makes the most economic sense and offers the best protection for our taxpayers,” Garcia told the Guardian. “We need to look very seriously at this idea and get some serious legal opinions in connection with this because we see similar ventures happening in different parts of the state of Texas.”
The current Hidalgo County courthouse was built in the early 1950s. As well as being old, it is now deemed too small to handle all of the county’s business. Hidalgo County is one of the fastest growing counties in the nation.
“Whenever a county gets construction done it costs three times as much, it takes three times as long and there are limitations as to what they can do in terms of borrowing. Whenever it is a private developer doing that, I guarantee you we will get almost a third more courthouse for the same amount of money. The county leadership needs to be very seriously looking at it. I think we would be remiss if we did not give that serious thought,” Garcia said.
Garcia explained how the public-private agreement would work. “The money would be fronted by a private developer. You do not have to come up with $110 million upfront. They do that and then they collect it from you, which you can afford to pay from your general fund. You create a TIRZ (tax increment reinvestment zone) where you are making payments out of future tax coming from sales taxes and from property taxes without increasing taxes over a period of 20 or 30 years. Basically it is the private developer leasing the building to the county. At the end of the time period the ownership reverts back to the county, the developer makes some money off of it, the county was able to pay for it without having to raise taxes; everyone goes home happy.”
Garcia has made a pitch for a public-private partnership in order to build a new county courthouse before. As the Guardian’s Joey Gomez reported in October, 2012, Garcia held a meeting at his home with First Hartford Realty Corp. CEO and President Neil Ellis. First Hartford Realty built The Shoppes development in Edinburg. Also at the meeting were Hidalgo County Judge Ramon Garcia and Hidalgo County Commissioner Joseph Palacios. They discussed the possibility of using a P3 financing mechanism to fund the courthouse construction.
Garcia said that as a practicing attorney, he knows Hidalgo County needs a new courthouse in order to better dispense justice. “The current courthouse was built in 1954. It is time to move up. We have a lot more opportunities as far as creative financing that have been afforded to us by the legislature, both in Austin and in Washington. We have to be smart enough to take advantage of it,” he said.
“It would not even cost us to get a legal opinion on this. Just go to some of the private developers who are willing to do this project and have them bring their lawyers and have them bring their opinions. We do not even have to do it ourselves. I am convinced this is the way to go,” Garcia said.
Garcia said if a private developer builds a new county courthouse it would also likely develop nearby properties. Garcia said he would like to see University Drive between the courthouse and I-69 Central developed through a TIRZ.
Here is the story Guardian reporter Joey Gomez penned in Oct. 2012:
New Hidalgo County Courthouse may be built through a Public-Private Partnership
By Joey Gomez
EDINBURG, October 23 - Private developers want a shot at building and financing the future Hidalgo County Courthouse, according to a recent announcement by Edinburg leaders.
At the behest of Connecticut-based developer First Hartford Realty Corporation, the City of Edinburg and Hidalgo County have begun to mull “P3” financing for the courthouse construction.
At a recent meeting held at the home of Edinburg mayor Richard Garcia, First Hartford Chairman, Chief Executive Officer and President Neil Ellis met with Hidalgo County Judge Ramon Garcia and Hidalgo County Commissioner Joseph Palacios, who represents Edinburg, to discuss the possibility of using a Public-Private Partnership (P3) financing mechanism to fund the courthouse construction.
Under that proposal, the county would pay a monthly amount for leasing the future courthouse, which would avoid having to hold a bond issuance or raise taxes. According to the mayor, that proposal has also drawn the interest of other private firms, including McAllen builder Alonzo Cantu, who may be interested in submitting their own proposal for the construction of the courthouse, according to the mayor.
“Everybody knows we need a new courthouse in the middle of Edinburg where the old courthouse currently sits. It’s very costly. We are talking about figures in the amount of $75 million to $100 million to accomplish this,” Edinburg Mayor Garcia said. “The County is scratching their head asking ‘how do we do this?’ Neil Ellis, the owner of this development (The Shoppes at Rio Grande Valley) has met with them already and basically told them ‘I’ll build it. I will pay for it. You do a lease agreement with the county, and the county ends up owning it.’
“These are the kinds of innovative ideas we are getting involved with, that this city is involved with,” Garcia said.
The mayor made the announcement at a recent ribbon-cutting celebrating the completion of Phase I for The Shoppes at Rio Grande Valley, a project also being developed by First Hartford. At the event, representatives with the development firm opted not comment on the courthouse proposal. Among the First Hartford officials at the ribbon-cutting ceremony was Paul Rappaport, vice president of property management and operations for the southern region.
Mayor Garcia said the city was spurred to find creative financing because the county was looking for the City of Edinburg to contribute $30 million annually for construction of the courthouse project.
“The big idea behind having First Hartford is, these people are developers, (and) once they build the courthouse, whatever else we are looking to develop on the square, they will take care of,” the mayor said. “They (First Hartford) will buy properties and develop those properties into retail and residential. It’s a perfect vehicle for us for the future.”
In the aftermath of the meeting with First Hartford and county leaders, the next stage will be mull the idea, try to convince the three remaining county commissioners, Joe Flores, Tito Palacios and Joel Quintanilla, to go along with the plan and engage the general public, not only in Edinburg but the entire county. County Judge Ramon Garcia expressed concern about any private firm owning a public building.
“These are public buildings. They need to be wholly owned by the public, in my opinion,” he said. “But that doesn’t mean we are not going to be considering this P3. We are going to look at them, and if that’s one of the options, if that’s the best option, that’s what we are going to do.”
“Everything is on the table. Any kind of financing method that’s fair to the residents of the county, we are going to be putting on the table, looking at it and considering it,” County Judge Garcia added. “I don’t think there is any question that there is a tremendous need to get it done. We feel comfortable that next year we’ll start focusing on the courthouse project, and make sure we get it going.”
The Hidalgo County Courthouse is the heart of county government. With an estimated 6,000 jobs directly linked to its presence, city and county leaders have been reviewing the comprehensive Hidalgo County Courthouse Master Plan that includes the proposed construction of a $76 million, 294,000-square-foot, seven story Courts Building that would dramatically reshape Edinburg’s downtown area.
This scenario would feature locating the Courts Building on the downtown county square, which is currently used for parking, closing off the portion of Business Highway 281 that divides the county square from the current Hidalgo County Courthouse campus, and physically linking the new facility with the current courthouse, which would be dedicated for use primarily by the County Clerk's Office and the District Clerk's Office.
It could take up to four years from developing the architectural design of the Courts Building to finishing the construction of the new complex. The detailed study, commissioned by the Hidalgo County Commissioners Court last fall, was released last summer before a joint session of the Edinburg City Council and its jobs-creation arm, the Edinburg Economic Development Corporation.