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

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.


Mazzy Tue, 06/13/2017 - 22:28 Permalink

How do people live in Houston with all it's heat and humidity?  Can you even take full breaths of air there?  How much water need one drink on an hourly basis? But this kind of corporate gifting goes on all the time.  Heck, my nearest metro area just gave Under Armor something equivalent to a district or a ward.

Déjà view luky luke Tue, 06/13/2017 - 23:23 Permalink

Won't convince Gov. Abbott...

Gov. Greg Abbott flew to Israel Saturday on a plane belonging to Sheldon Adelson, the billionaire casino owner and megadonor active in Republican national politics.

A spokesman for the governor confirmed that Abbott flew on Adelson’s 737 after Jewish Insider and The Dallas Morning News first reported it Monday.
Adelson is a top spender in Republican politics known for his fierce support of Israel and his friendship with Prime Minister Benjamin Netanyahu. Abbott met with Netanyahu in Jerusalem on Monday to discuss the Texas-Israeli relationship and reiterate Abbott’s opposition to Iran — a nation whose relationship with Israel has long been tense.

It was discussed with the prime minister, as well as other leaders in Israel,” Abbott said. “… I made very clear to the prime minister that he has no greater ally on the globe than Texas.”

In reply to by luky luke

Déjà view totenkopf88 Wed, 06/14/2017 - 00:33 Permalink

Tejas is different from MexiCali...CALPERS only had a 7.5% return...reduced to 7%.

The plan further reduces the pension funds' assumed rates of return to 7% from the current rates — which ranged between 8% and 8.5%.

The firefighters' lawsuit, filed in Harris County District Court against the city of Houston on Tuesday, argues that the pension fund has “sole constitutional discretion” over determining the fund's actuarial assumptions, including its assumed rate or return, according to a news release from the pension fund Wednesday. On Tuesday, the pension fund board lowered its assumed rate of return to 7.25% from 8.5%.



Si Señor!


Debt is also growing rapidly among the state’s 81 retirement systems for local-government workers. Not only are these systems poorly funded; it isn’t even clear how much some owe, since they haven’t disclosed the financial information necessary to verify their financial position, even to state oversight officials. After an extensive survey of municipal pension systems, Combs determined that none of the local plans was fully funded and that only 19 percent had 80 percent of the funds on hand to meet future obligations. 

One does NOT want to hang around when these Debts Of Massive Destruction hit...

CABs generally offer longer terms than conventional bonds, allowing investors to reap a greater amount of compounded interest over time — and allowing borrowers to defer debt service payments for decades. CABs allow school districts to "build now, pay later" — "later" being many years down the road, when the tax base may have grown enough to make repayment less of a burden. Some districts may set aside money along the way to ease the burden when their CABs reach maturity.

Overreliance on CABs, however, can be costly for school districts when the eventual lump-sum payments become due. According to Texas Bond Review Board (BRB) data, as of the end of fiscal 2014 Forney ISD had issued four of the 20 most expensive CABs outstanding for Texas school districts. For just under $30 million in immediate funding, the district will have to repay more than $208 million when the bonds reach maturity in 30 to 40 years.

'Loan' Star state backs most local debt...nationally second highest after N.Y.

In reply to by totenkopf88

SubjectivObject Mazzy Wed, 06/14/2017 - 07:17 Permalink

3H; Houston Heat Humidityyou get used to it; dress light; no need for a separate sauna in the houseabout one pint every 2 hours when working out in it, messikins got justification to snear at the paying caucswould be tolerable but for the mosquitos; the jurisdictional bug spray operation has killed off the bigger slow ones that you can hit and filtered to the tiny frenetic one that are near imposible to see and hit; those transient muscle/body ache&pain cycles one gets ...?  ... bug bites.

In reply to by Mazzy

booboo Tue, 06/13/2017 - 22:27 Permalink

I will take Yellowstone for 5 bucks an acrein other news lots of grandma's lived on those streets so yea, the state will sell your own grandma

MadHatt Tue, 06/13/2017 - 22:33 Permalink

"7.5-acre tract valued at $443,000 that used to be home to the now-defunct Clinton Park Elementary" Something with a Clinton name on it is defunct?No. Way. /s