Modern Boom: Questions raised in plans to finish ‘The Fingers' in Port Isabel

PORT ISABEL — The city and a Chicago-based corporation have plans to develop the remaining “fingers” of land in the Modern Venice area, which they say will be a boon to the city.

Development of the area began in 1928. From above, the area looks like two hands with fingers pointing away, to the east and to the west — which is why it is also known as “The Fingers.”

On the east side, canals that divide the fingers are lined by boat slips and waterfront homes, reminiscent of Venice. The west fingers remain largely undeveloped.

But plans to complete development of the west side through the use of a special tax zone are drawing questions from some city residents.

Leo “Speck” Sanders, a former public official, said he wonders why the city needs to hire a company from Chicago to finish developing the area, especially a company that owns 25 lots in the area that will increase in value when work is complete.

Sanders, a former Port Isabel mayor, city manager, school board member and water board member, said that if he had trouble understanding what the city was doing in Modern Venice, it is no wonder many other residents are confused.

Few people understood what was happening when city commissioners asked state legislators to create what is known as a Tax Increment Reinvestment Zone here, Sanders said.

Also, many residents wonder why the city hired Chicago development company Raybec to do design work, obtain permits and hire contractors when Raybec owns lots in the area being developed, he said.

Sanders said he questions why the city needed to hire a consultant when it could have built a road on the 2 1/2 remaining “fingers” and then have utility companies provide water, sewer and electrical service.

City Manager Ed Meza says it’s not that easy.

He said city officials have made recent attempts to get taxpayer support for the final development of the area. But voters turned down proposals for the city to create a public improvement district and handle the job of completing development on its own, he said.

Raybec was hired by the city as a consultant because of its expertise in developing similar projects in other areas, Meza said.

The company will handle the process of obtaining permits from the U.S. Army Corps of Engineers and state agencies, Meza said. The company will also coordinate other aspects of the development process, he said.

Raybec spokesman Ron Berman said the company bought lots in the western portion of Modern Venice believing the city had a plan to complete development, but later learned the city’s plan had stalled.

The city of Port Isabel tried two years ago to create a public improvement district to fund the building of seawalls, roads and other improvements, but failed to do so, Berman said.

“We convinced them to hire us to finish it, since we have the expertise and we could get it done much faster,” Berman said.

Meza said the city was looking for the best plan to complete the development.

“We have 2 1/2 undeveloped Fingers,” he said. “We’ve tried everything. We tried public improvement districts and it was not passed, two resolutions to do that,” Meza said.

Raybec’s plan is the most feasible way to complete development of the remaining area, he said.

But the city is the developer, Meza said. Many of the lots in the undeveloped west portion of The Fingers are owned by the city because they were abandoned by owners who quit paying property tax on them, he said.

“First we had to get the Army Corps of Engineers to issue a permit to dredge. Then we had to get the property owners to give eminent domain for seawalls that are 10 inches thick so there could be a uniform seawall,” the city manager said. “From there, we could start doing all the infrastructure.”

The city’s $350,000 contract with Raybec will mostly pay for attorneys, environmental consultants and engineers it will hire to assist in the project, Berman said. Raybec’s share is between $50,000 and $60,000, he said.

Raybec will help the city complete development of Modern Venice, Meza said. “They were hired to guide us with the idea to do the whole area, the 2 1/2 undeveloped Fingers,” he said.

Berman said his company owns only 25 of the 120 lots, not the whole area.

“The only reason we stepped up is to protect our investment,” he said. “This is what we do … The city has now passed three resolutions for this,” he said.

Financing for the project will come from property taxes on what are now empty lots, not on existing homes and businesses, Meza and Berman said.

Meza said the plan is to use what is called a Tax Increment Reinvestment Zone to complete the development. Typically, a TIRZ is created to encourage development of an area that would otherwise not attract investments. Taxes attributable to new improvements are set aside to finance public improvements within the zone.

Meza said creating a TIRZ makes it possible to complete development of the western portion of Modern Venice without the city incurring debt by issuing bonds or raising taxes on other properties.

Only owners of undeveloped lots will be affected, Meza said.

“They are the only ones that are going to be part of that,” he said. “It’s just to develop seawalls there and to develop property that’s not been developed.”

Berman said the development will be built to city zoning standards by persons who purchase the lots.

Sanders questioned why the city created a TIRZ when it could have instead used property taxes, sales tax money and government bonds to pay the cost of developing the west side of Modern Venice without creating the zone.

“Why couldn’t they just finish the west part of Modern Venice the way the east part was done many years ago?” Sanders asked.

Each property owner could build their own seawall without getting a permit from the Army Corps of Engineers and then the city and utility companies could provide the street and utilities, Sanders said.

He said Raybec and the city are using a law that is intended to provide low-income housing, not to aid developers of expensive resort property.

Once water, sewer, streets and other infrastructure is in place, landowners could build the seawalls and develop their lots, he said.

Laguna Madre Water District and other utility companies are obligated to provide those services everywhere in the city, Sanders said.

But Meza said utility companies won’t install water and sewer lines or electrical lines until the seawalls are built because a hurricane would wash away the soil, utilities and road.

Those strips of land flood every time there is a hurricane, he said. Berman said he will push for underground electric cables in the new development.

Sanders said many Port Isabel residents, some of whom are property owners in Modern Venice, have serious questions about the project.

Few people in Port Isabel even knew what a Tax Increment Reinvestment Zone would do when the City Commission was voting on the resolutions, Sanders said.

When he confronted the City Commission with questions about the plan, he got few answers, Sanders said.

Berman said Port Isabel will benefit from the project.

“I think you’ll have nice new homes, single-family zones,” he said. “The city will still retain all its zoning power and it will control whatever is built.”

His company developed the Puerto del Sol condominium project, located near the Queen Isabella Memorial Bridge, Berman said.

Port Isabel resident David Woolverton, who has owned several area businesses and whose family members are in the real estate business, said the main group opposed to the plan may see it as competition to their effort to sell lots on the east side.

It is his personal opinion that a majority of people who live in Modern Venice think the Raybec plan would be beneficial, Woolverton said.

“I approve of what I see,” Woolverton said.