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Sales tax not for loan payment
By Kathy McIntyre
Contributor
Published November 6, 2009
In 2008, Clear Lake Shores purchased some property at the entrance to the city, which is Clear Lake Road and Marina Bay Drive. The property loan will be paid off in December.
A well-known landmark, Okie’s Liquor Store, had been there for 40 years. The city has demolished Okie’s and two more buildings. There is a hair salon that is privately owned between city-owned properties.
A farmers’ market is held two weekends a month that occupies all the space on the corner, with parking overflowing to the vacant lot on the opposite side of Clear Lake Road. The market is well attended and a point of pride for the city, as it’s run by volunteers.
Clear Lake Shores Economic Development Council has proposed taking out a $1.4 million loan that would be repaid through the city sales tax. It is a 15-year loan from a local bank and would require yearly payments of about $150,000.
No surprise there but, when you look at the total payback, it is about two thirds principal and one third interest. The interest is $828,000 over the 15 years, a staggering amount to pay to get funds that are more than we can spend in the next year.
The loan would be used for infrastructure on Okie’s corner, which has been renamed the Town Center. Developing it is part of the EDC’s effort to present a better first impression to the city.
Clear Creek Architects has worked sketching what the area could become and it is impressive. The firm has drawn in many buildings that are only an architect’s dream because no developer has expressed interest. The city doesn’t plan to construct buildings.
The economic development council would like to take the loan money and add it to a $1.4 million grant of community development funds to get all the infrastructure work done in the belief that it has to be finished to find a developer. The grant does not require a match.
Residents in Clear Lake Shores are politically active. We objected to and killed an earlier $2 million loan proposal with a petition. We are now working another petition for the $1.4 million loan because the same objections still stand.
“Sales tax is inherently unstable,” according to a quote from bankers in a paper presented to the economic development council in August. We believe the work can be phased in on a “pay as you go basis” and still get the benefit of the grant funds.
Our city receives about $2 million in yearly sales-tax revenue and it pays most of the city’s bills. We have no city property tax, $100 yearly pool membership, excellent security and free trash pickup. Residents must weigh these benefits against getting the corner finished in a year.
The city will have a public hearing on the project Nov. 17.
Kathy McIntyre is a resident of Clear Lake Shores.
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