, Port Arthur, Texas

May 16, 2013

Measures pass but roadblock thrown for LSC-PA dorms

Dan Bledsoe
The Port Arthur News

— Supporters of a measure to allow the Port Arthur Economic Development Corporation to spend some of its approximately $10 million balance for student housing got a rude awakening Wednesday before the Senate Committee on Economic Development.

Comments by proponents of House Bill 2473 and HB 1967, urging senators to carve out special exemptions from state law just for the PAEDC, were rebuked by other EDCs including two from the committee chairman’s district.

Both bills, filed by State Rep. Joe Deshotel, D-Beaumont, were eventually approved and will now be considered by the full Senate. But because the committee approved a substitute version of HB 2473, that bill would also have to go back to the House for another vote.

On May 4, the measure barely passed in the House by a vote of 70-69. Also, the bill is facing a legislative deadline as there are just 11 days left in the session.

HB 2473 is the mechanism which if passed would allow LSC-PA, the EDC and a private developer to construct downtown housing units for 100 students using a portion of sales and use tax revenue.

State Sen. Tommy Williams, R-The Woodlands, laid out supporters’ initial arguments.

“Mr. Chairman, this area currently has a rate of unemployment that is roughly double the state unemployment average,” Williams said about HB 1967 which would allow EDC money to be used for life skills training aimed at the unemployed. “This is a severely blighted area and what we’re trying to do here is put the infrastructure in place with these two bills and provide the training that we can help these folks become productive citizens.”

Williams said that even though the PAEDC has $10 million, it is having trouble finding qualified projects within the area to spend the money. Companies, he said, are having a hard time to find people with even basic work skills to qualify for company training programs.

He said HB 2473 is needed because schools like LSC-PA have “developed beyond commuter schools and are attracting students from around the state.”

“This would be a one-time, public-private partnership to build a 100-bed facility and it sets an expiration date for the funds to be used of September 1, 2017,” Williams said.

Deshotel also testified and said adding the expiration date to the original bill was done to “sunset” the measure and to allay concerns from opponents.

Deshotel said having student housing would serve as an economic catalyst for downtown development and that an influx of expansion in the petrochemical industries is imminent and necessitates the need to enhance job training.

PAEDC Executive Director Floyd Batiste appealed to lawmakers saying they were the “gatekeepers” to make these projects happen.

“We feel that when you have the amount of economic stimulant that have gone on in our community but yet you still have an unemployment rate of 14, 15, 16 percent and you have $10 million sitting in the bank and you can’t help those people, you’ve got to do something,” Batiste said.

LSC-PA President Sam Monroe told the committee that the entire campus resides in the city’s redevelopment zone and that the school’s goals were synonymous with the city and the EDC.

Roger Feagley, representing the Sulphur Springs-Hopkins County EDC, said his group is opposed to both measures in part because he believes that what the PAEDC wants to do can  be done with existing statutes.

Feagley said that just three years ago, downtown Sulphur Springs was a blighted area but that officials there cleaned it up with trees, grass, flowers and reconstructed roads “and not a penny of 4A sales tax was used to do that.”

“It was all done through tax increment financing district so that the area paid for its own way,” he said. “The 4A sales tax was created to create primary jobs and the issue that we have here is that these bills really don’t create primary employment.”

Feagley said he supports efforts to train the unemployed but that monies to do so already exist through each region’s Texas Workforce Development Board.

Greg Sims, who serves on the board of directors of the Texas Economic Development Council and as president of the Greenville EDC, said both groups tremendously oppose any carve out legislation.

“We think that that further dilutes, erodes and damages the original intent and purpose of 4A that has been serving this state for 24 years with hundreds of millions of dollars of city, county, school district and hospital district tax base well and millions of Texas jobs in job creation and retention as well,” Sims said.

Sims said he only wishes his EDC had $10 million and that there are plenty of funding sources available to the PAEDC both within and outside existing state statutes.

Because the committee initially lacked a quorum, a vote was delayed until after testimony from both sides.

Prior to the end of testimony, Williams again made his case for the sense of urgency behind the two bills.

“This is a desperate situation that we have and I would urge you to please give favorable consideration to this legislation,” Williams said. “There is nothing that I can do for my constituents in Port Arthur that is more important than these two bills.”