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Saturday, April 10, 2021

Panther Island development funds slow to trickle as partners remain split

As funds for the Panther Island development slow to a trickle, the split among partners over how to proceed is widening to a gulf.

Officials of the Tarrant Regional Water District are at odds with city of Fort Worth leaders over a 10-year extension of the tax-increment-finance district (TIF).

Tax revenue from TIF 9, encompassing a large swath of land hugging the Trinity River is the sole local funding source for the $1.17 billion Panther Island project.

The city of Fort Worth created this and other TIFs and it is the only agency with authority to change the terms.

TRWD officials continue to express displeasure with the city’s pushback against extending the TIF from 40 to 50 years.

“We have $107,000 a month to spend in October, November and December,” Sandy Newby, chief financial officer for the TRWD told the board on Oct. 15. Newby is also CFO of the Trinity River Vision Authority, a subsidiary of TRWD and the agency that oversees the Panther Island project.

Aside from paying rent on the TRVA’s downtown office space and salaries for TRVA staffers, all other contracts and work is being suspended, Newby said.

“We have no other revenue to pay them,” she said.

That amount does not include work on the three Panther Island bridges that are under construction on White Settlement Road and Henderson and Main streets. Bridge construction funds are already in hand, she said.

The standoff between city and the TRWD in overseeing the Panther Island project has already prompted the TRWD to issue an official request to the city to present the TIF extension to the City Council for a voter.

At the Oct. 15 meeting, TRWD board member Jim Lane requested that city officials attend the next the TRWD meeting to explain their reasons for not moving forward with the TIF extension.

Newby said extension of the TIF was extensively discussed and agreed upon by the project partners before TRWD voters were asked to approve a $250 million bond issue for the project. Without the extension, there would not be enough tax revenue to repay the bond debt in 40 years.

Fort Worth City Manager David Cooke, who is also a city representative on the TRVA board, has said he is reluctant to recommend that the City Council raise the TIF with millions of dollars in critical federal funds on the line and no guarantee they will be appropriated for this project.

The U.S. Army Corps of Engineers authorized up to $526 million to be spent on the ambitious capital improvement project. The money would go toward digging a 1.5-mile bypass channel on the Trinity River. The channelization would provide flood control protection and produce an 800-acre island with waterfront economic development opportunities.

Despite Corps authorization, the project has only been appropriated $60 million under the Bush and Obama administrations. The Trump administration has rejected $30 to $40 million funding requests for the project.

Project partners, which also include Tarrant County, are hopeful that the Trump administration will approved a $36.7 million in 2020 and another $38.7 million in 2021.

The partnering agencies have already invested $326 million in the project, including a $200 million loan from the TRWD, and have taken significant housecleaning measures to better position the project for federal funding.

Among its steps was hiring the Dallas-based consulting firm Riveron to conduct a comprehensive review with the intention of helping better position the project for federal funding.

Recommendations include administrative restructuring, improved communication and transparency about the project and messaging focused solely on flood control absent of economic development. The consultants said economic development opportunities are typically secondary benefits of major capital improvements projects and not the primary focus.

Earlier this month, the TRVA board adopted the recommendations, including eliminating the role of executive director and shifting J.D. Granger into a more limited role of flood control management within the TRWD. A program manager will be hired to coordinate communication among the project partners.

Granger is the son of U.S. Congresswoman Kay Granger, R-Fort Worth, who has been the champion of this project since its inception nearly 20 years ago. Speculation has raised concerns that the optics of nepotism has hindered federal fund appropriations for the project.

Granger, who earns more than $200,000 a year, continues in a management role although he now reports to TRWD general manager Jim Oliver. Granger’s oversight of recreation and entertainment has shifted to the TRWD and his responsibility for economic and land development has shifted to the city.

Also on Oct. 15, the City Council adopted resolutions that align development on Panther Island with city codes and standards and replace the TRVA name with Panther Island in city documents.

Besides the re-organization, various local officials, including Mayor Betsy Price, Republican U.S. Rep. Roger Williams, whose District 25 stretches from the southern Fort Worth area to Austin, and TRVA board President G. K. Maenius, who is also administrator of Tarrant County, have met with Trump administration officials to advocate for federal money for the project.

Price and Williams, who met with Trump’s Acting Chief of Staff, Mick Mulvaney, walked away optimistic that the project could receive up to $250 million – about half of the amount the Corps authorized – for increased flood control protection.

But the uncertainty of the funding, including the possibility that more critical needs in other parts of the country will supersede Panther Island, has Cooke concerned whether any more local money should be spent. He compared it to a “Catch 22” situation.

TRWD officials want to lengthen the TIF and issue bonds to pay for relocating and up-sizing utilities on in the Panther Island zone as a gateway for development. The utility work would be the responsibility of the city and Cooke said the cost is estimated at about $80 million.

“We’re not saying that we won’t extend the TIF but we want to make sure these other things are going to fall in place, too, like the federal funding,” Cooke has said.

Newby said moving up siting the utilities is critical to make the construction zone “shovel ready” should federal funds be allocated. If the area isn’t ready for the Corps to dig the channel, the federal money might be re-allocated somewhere else, she said.

“Without the TIF extension, we can’t issue the bonds so the project can’t move forward,” Newby said. “We are already nine months behind schedule. The longer we delay, the more expensive the project becomes.

“We already have more than $300 million of local money invested,” she said. “Are we going to just let that go?”

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