Houston Resorts To Selling Off City Streets To Try And Close $100 Million Budget Shortfall

Tyler Durden's picture

With the US shale industry producing at near-record levels as oil prices languish around $50 a barrel, cities in oil-dependent states like Texas are resorting to increasingly creative means to compensate for the shortfall left by falling energy revenues, including selling off public assets, like Houston just did.

The city held what the Houston Chronicle described as “a yard sale of sorts” last week when the city council approved selling or swapping almost $2 million worth of city streets and utilities easements in a deal that will help close what’s expected to be a $100 million budget shortfall over the next five years.

Specifically, the council abandoned or sold several streets and easements on the east side of the city. The land is adjacent to an oil refinery owned by Valero Energy. The oil giant already owns the blocks immediately surrounding its facility, and the move will let the company assume the intersecting streets onto its land as part of a plan to build an office building, warehouse, security building and to add parking farther away from the central plant, the Chronicle reported.

The second example also comes from the east side, around Houston’s public Milby High School. The city agreed to abandon and sell parts of five streets and a sewer easement in and around the school campus for $431,000. But rather than pony up that cash, the school district is instead giving the city a 7.5-acre tract valued at $443,000 that used to be home to the now-defunct Clinton Park Elementary.

City officials have ramped up efforts to jettison useless easements and strips of city land in recent years amid repeated budget crunches. However, it’s somewhat less common for the dollar amounts to rise into the millions on the same meeting agenda. Councilman Robert Gallegos, whose district includes both sites, said he hopes the land swap can be beneficial for the neighborhood.

"Now that the city is taking over these 7.5 acres I hope this is a partnership that maybe the city and County Commissioner [Rodney] Ellis, we could work on hopefully making a community center," Gallegos said. "There's a desperate need for a community center in that community."

In another development that is draining the city’s tax base, Houston, one of the hardest hit markets from the collapse of oil prices, saw commercial vacancies rise to a 22-year high during the first quarter, according to a report by NAI Partners.

Unfortunately for Houston officials, there's little the city can do about the price of oil aside from praying that OPEC will come through with yet another production cut.

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Deplorable's picture

Can I buy a street and put a toll both on it?

Bobportlandor's picture

Somehow the Taxpayer is going to get screwed

EndGamesAreFun's picture

This article is so overblown it qualifies as fake news. The people of Houston are pretty happy that in no-zoning Houston, the city government is helping to keep houston fresh by getting rid of non-productive land and letting private interests make good use of it. Good Lord, what a crappy take on good government!

Déjà view's picture

More "FAKE" news...

The real estate development was dubbed "Ashby high-rise" by residents who began opposing it some 10 years ago. The project has lasted three mayoral administrations and influenced new rules for developing tall buildings in Houston. It was also the subject of a lengthy legal battle.
http://www.chron.com/business/real-estate/article/Permit-issued-for-1717...

Bernie Madolf's picture

Selling fixed assets when you can leverage up until super joe taxpayer comes to the rescue??!

Madness

Sounds more like a land grab favor.

Haha, I looked after writing above and wouldn't you know it that Valero is the buyer for one of the deals adjacent to their plant

This was a rear end job on super joe with a real asset for paper reach around

1.21 jigawatts's picture

Houston should try to sell off some of its surplus Mexicans.

are we there yet's picture

You can not sell off a liability.

RafterManFMJ's picture

Depends. Goldman can repackage them and sell them to moronic investors

Lost in translation's picture

Sell them to CA Governor Brownstone. He loves savages.

Lost in translation's picture

An ex-girlfriend of mine took a position with DICentral in Houston and bought a house there, in late 2012. She wanted to get out of CA.

"Los Angeles is not a very moral place," she said. "I want to live in a nice city, with good people."

I wonder how things worked out for her...

SmedleyButlersGhost's picture

My guess is after looking for moral people in a "good city" - she's a pole dancer on the early shift. 

Lost in translation's picture

I've only driven through Houston en route to NOLA, didn't see much. Traffic was pretty bad.

But yeah, all I've ever heard about Houston has come from ZHers, very little of it positive.

Many years ago one ZHer said of Houston, "beware of following the crowd to any boom town; all boom towns go bust, before too long."

hardmedicine's picture

77019 is absolutely FABULOUS!

hardmedicine's picture

NO BETTER people than the WEst Texans though!  They are the cream of all crops.  Give you their last dollar.  Good salt of the earth people they are!

Stinkytofu's picture

seems like a good deal for all involved.

especialful for the taxpayers.

 

all the private land/buildings be owned by

the oil refinery.  they's basically the only ones

using the streets.....the streets being torn up

by heavy trucks....so why should the taxpayers

have to pay for maintenance?

 

sell to the refinery.  they pay to maintain the

now private roads, which of course are added

to the tax rolls as private land.

 

of course for some reason you socialists think

all land should be owned by the government, right?

A. Boaty's picture

Houston, we have a problem...

Drop-Hammer's picture

Maybe they could sell off their negroes and make money that way.