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WEIMAR CITY COUNCIL
Weimar city council members approved City Manager Richard Whitten to engage in consulting services with Petty and Associates to represent Weimer in developing tax incentives for the Texas Film Corridor at last Thursday’s council meeting, Jan. 9.
The move does not cement any agreement with the movie corridor as of now due to all the “necessary steps” being yet to come but are a step in the right direction in what could see Weimar profit and expand immensely.
Whitten, who has been working with the Texas Film Corridor over the last couple of months, reached out to Trent Petty, President of Petty and Associates, who Whitten had previously known, to potentially help the city with working on a tax incentives agreement with the TFC.
“I’ve known Trent petty for right at 20 years, just to be in full disclosure,” said Whitten. “Mr. Petty has extensive experience in development agreements and tax incentives and working that up.”
Petty spoke to councilmembers and explained to them the process of developing these tax incentives in tandem with the Texas Film Corridor and the potential risks to the public, how to protect taxpayers and their “interest on return” and the city on any investments they potentially make.
“Our work is exclusively designed to make sure that we can illustrate a cost benefit analysis and a business approach to managing incentives, so that it reflects what the city’s mission and goals are,” said Petty. “What are the benefits that the project brings? What’s the risk to the public? How do we protect, in terms of claw backs, any investment that we make? What’s the schedule that all comes out in a very detailed cost benefit analysis, where we work closely with the city and with the prospective development to make sure that we understand what level of investment they plan on putting in, what their schedule is, what the phasing of that might be.”
According to Petty, their typical tax incentive agreements are anywhere from “five to 30 years,” depending on the particular incentive and the city’s “appetite.” As an example, Petty brings up a project in Hays County’s San Marcos, a near $267,000,000 investment in between the city and the county.
“They contributed about $5.1 million in taxes over a five-year period,” said Petty. “Richard (Whitten) will recall this because we wrote the agreements that brought Fidelity Investments, as well as Deloitte and Suave International. Unlike this agreement, those were descending scale, where you may start with a 90% participation within that scale back each year down to 20% or lower.”
The biggest benefit of the project Petty says is the equity up front and the dollars that come in when the Texas Film Corridor needs it the most. As they become more stable, however, the city’s participation could begin to “decline.”
“That’s the process that we would use on something like this,” said Petty. “Obviously, we would be reporting back to the council, working through Mr. Whitten and the finance director to make sure we get the right information from the development and bring that back to you.”
Petty says the most likely route with the tax incentives would probably be through a Chapter 380 agreement. Despite Petty’s lack of work within Colorado County, he highlights that one option would be whether they might be approached as well to help participate in a similar setting.
“I don’t know the scale that this company is proposing,” said Petty. “If it’s to the scale of the project in San Marcos, it’s a significant project, and could bring a lot of benefits to the community, not only employment benefits, but these kinds of projects produce a lot of visitor attraction, a lot of tourism, hotel rooms.”
When asked why the film corridor would want to potentially work on projects within the Weimar area, Mayor Milton Koller responded, “location, location, location.”
“With us being on the I-10 corridor in the middle of Houston, San Antonio and just south of Austin,” said Koller. “Which is basically the same location the property that they have under contract is at now, it’s a contingency. The contract is right on I-10, which is ideal for them. They are looking for additional property. The 48 acres is what they have right now. They’re probably looking for another 50 to 100 to do things.”
The next Weimar city council meeting will be held on Thursday, Jan. 23, at 5 p.m.
