Economic corp. looks for town center end-around

CLEAR LAKE SHORES — The city’s economic development corporation announced plans to borrow $1.4 million to develop a town center after residents successfully killed the city’s plan to take on debt — without voter approval — for the same project.

The corporation wants to develop the town center to restrict development at the city’s entrance and block unattractive strip centers and big-box retailers from moving into the city’s prime real estate, Ronnie Richards, corporation director, said.

Clear Lake Shores hopes to attract small businesses to diversify its sales tax base, making the city less dependent on Home Depot and Target.

Developing the town center also could revitalize the entrance to the city, Richards said.

City council members Tuesday approved the plan, giving the corporation the city’s blessing to take on debt.

The corporation plans to retire the $1.4 million debt in 15 years with sales tax revenue. The corporation expects interest rates could be as high as 8 percent, but that estimate is conservative and based on the idea that bonds funded by sales tax are slightly more risky than bonds funded by property tax, Richards said.

Former Mayor Katherine McIntyre, who led the opposition against the city’s plan, said she also opposes the corporation’s plan. Again, she is collecting signatures on a petition to force the issue to go to voters.

Although state law required the signatures of only 5 percent of registered voters to kill a city’s plan to issue debt without voter approval, the law demands 10 percent of registered voters sign a petition to force the economic development corporation to call an election.

McIntyre and former Mayor Ted Guthrie collected more than 60 signatures on a petition opposing the city’s plan.

McIntyre said she opposes the corporation’s plan to take on debt without voter approval because she said the plan lacks details, timelines or specific information about how the costs were determined.

The small island city, which funds itself through sales tax revenues, had planned to issue $2 million in certificates of obligation, a form of debt that does not require voter approval, to pay off loans the Clear Lake Shores Economic Development Corp. secured to buy land on FM 2094 for a town center. The city also planned to use the certificates to build sidewalks, pedestrian trails, a $300,000 city plaza for the Clear Lake Shores Farmers’ Market and a nearby parking lot for $200,000.

The economic development corporation in 2008 borrowed $1 million and loaned the money to a city-formed corporation called Plaza Ten 06 Corp. Plaza Ten 06 used the money to buy three pieces of property at the city’s entrance. The city planned to borrow money to pay off that loan and buy the property from Plaza Ten 06 Corp.

The economic development corporation plans to leverage the money with a grant the city received from the state to repair hurricane-damaged streets. The money would be used to build sidewalks, pave roads, install lighting, landscape the town center, create a city plaza and build a nearby parking lot. The economic development corporation would not use the funds to pay off its existing $1 million loan.

The city would not be liable for paying off the debt if the corporation defaulted on the loan, Richards said.

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At A Glance

WHAT: Clear Lake Shores Economic Development Corp. public hearing

WHEN: 6:30 p.m. Nov. 17

WHERE: City’s club house, 931 Cedar Road