Council approves reinvestment zone,
but not without opposition

by Dolores Hamilton
The Iowa Park City Council unanimously voted to establish a reinvestment zone Monday night, but not without hearing opposition from several small business owners in the audience.

The area approved is bounded by Jackson St. on the east, Pacific Ave. on the west, Council Dr. on the south, and Hwy. 287 Access Rd. on the north.

Although the name of the business that might locate on the property was not mentioned during the proceedings, many in the audience said they knew it was a McDonald’s .

The city’s Economic Development Director, David Owens, described the incentives that could be offered to the new business under consideration, value of improvements, and the number of employees it would bring in.

He said the land is now worth $10,900 an acre and would bring in $736 in taxes over a 10 year period. If the property is purchased with the intent of putting a business on it, it would be worth $50,000 and bring in $3,375 in taxes over a 10 year period. The business would pay no property taxes on the land for the first two years, then 10 percent for the 3rd and 4th years; 20 percent for the 5th and 6th years; 30 percent for the 7th and 8th years; and 40 percent for the 9th and 10th years.

Owens said the business would provide 59 jobs, both full and part-time, but the salaries of the four shift managers would satisfy requirements for a tax abatement. The business would still pay school and county taxes unless the county decides to offer the same incentive as the city. The city would collect all sales tax generated.

Two owners of local food establishment expressed concern that the national food chain would hurt the small business owners, possibly putting them out of business. They don’t think it is right for the city to offer incentives, such as tax abatement for 10 years, to the new business when the smaller businesses started up with no help.

“I know that the small local businesses do a ton for this city other than just bring in sales tax,” said Steve Smith, owner of Ken’s Pizza. “Look on the back of the Little League sports teams, look on the city, police and fire department’s hazmat trailer.” Smith said the businesses support local non-profit groups and Friendly Door. He said he pays his employees salaries while they are out delivering Meals on Wheels for the senior citizen center. “I can guarantee, unless you’re bringing in a local franchisee, that business you’re thinking about putting up there will not be involved in the local community,” Smith added.

Andy Treadway, owner of Harvey’s, asked if the city has a contingency plan for when the national food chain comes in and the small business can’t afford to stay open, “What are you going to do to help the small businesses you already have? “ he asked.

Two other owners of food establishments didn’t think their businesses would be affected too much.

Guy Traylor, co-owner of Lakeside Travel Plaza, that includes a Subway sandwich shop, told the council that McDonald’s is located across the parking lot from his Subway in Vernon. “It does a lot more business than mine does here,” he said. Traylor said he expects an increase in fuel sales at the Travel Mart. “I’m torn,” he said. “I don’t think it’s going to hurt me. I think it’s going to change the dynamics of my sales, but I don’t think it’s going to hurt me.”

Dan Geil,owner of Texicans, a Mexican food establishment, said the new business might affect him at first, but didn’t think it would last long because of the difference in type of food offered. He said when McDonald’s came in near his pizza business in Burkburnett, his volume of business went down for a week or two and then went back up to normal.

Complaints were heard that others had not been offered the same incentives when they started up their businesses, and were told that the policy was not in place at that time.

The city did not have an economic development policy or designate a reinvestment zone until Alco came in a few years ago. City Manager Mike Price said that the city patterned its economic development policy after the state’s policy and the city’s policy prevents the city from contacting a new business and offering incentives - the business must make the request and it must be done before construction begins. Businesses that are planning an expansion may also request incentives, but again the request must be made before work begins.

“David’s been working with a hotel,” Price said, “and I’ll tell you, hotels don’t come in without incentives.”

Councilman Dan Fears made the motion to approve creation of the reinvestment zone, seconded by Ray Schultz, and it passed unanimously.

When contacted by the Leader on Wednesday, Price made the following comment about the action taken by the council - “The city’s economic development program has grown in leaps and bounds over the last 10 years and every day we gain knowledge about new programs and projects that can improve the business climate within our community.

Many of these programs were not available to the city and local businesses 10 to 15, even 20 years ago. Does that give an unfair advantage to new businesses looking to come into our community? Probably so. However our existing businesses need to take advantage of all the new programs when they look to expansion. It doesn’t hurt to ask if there’s help out there.”

In two other public hearings, the fate of a Ford pickup at 406 E. Magnolia was tabled until the next regular council meeting and the proper notification can be made, and the owner of a 1989 Buick at 506 W. Washington was given 10 days to comply with the city’s code regulations.

The second and final hearing was held to receive public input on the city’s 2008 “Drinking Water Quality Report.” No comments were offered, and the report was mailed out to the city’s water customers on Tuesday.

Other action taken by the council included:

Designating Lake Iowa Park as the only legal location to explode or set off fireworks within the city limits on July 3 and 4, between the hours of 5:30 and 11:50 p.m. each day;

Authorized continued participation with the steering committee of cities served by Oncor and authorized payment to the steering committee to fund related activities; and,

Authorized the mayor to execute the fifth amendment to the wholesale water supply contract between the city and the Horseshoe Bend Estate Homeowners’ Association.