Greenhouses at the San Antonio Botanical Garden, an animal hospital at the San Antonio Zoo, a jail diversion center on the West Side, and land to build a new Spurs arena are all among the roughly $170.5 million worth of TIRZ-funded projects the City Council is expected to green-light next week.
The Sept. 10 meeting comes as the city is facing a major budget deficit that could require closing senior nutrition centers, cutting librarians and raising taxes to balance the budget this year.
Yet Tuesday’s budget work session on Tax Increment Reinvestment Zones (TIRZes) — which are separate from the city budget and set to capture about $47 million in city property tax revenue this year — drew relatively little pushback from members who’ve been deeply divided over much smaller spending decisions in recent weeks.
“I just want to keep moving forward,” said Councilwoman Marina Alderete Gavito (D7), who has been one of the loudest voices urging deeper spending cuts elsewhere to avoid a property tax this year.
Likewise, Councilwoman Phyllis Viagran (D3) equated the TIRZ projects to other economic development spending, aimed at growing the city’s tax base for the future.
“A well-structured TIRZ is not simply about assisting a developer or financing a particular project,” Viagran said. “It is about creating an economic environment in which private investment can occur.”
As the city works to close a dramatic $158 million budget deficit over the next two years, Mayor Gina Ortiz Jones has spent months urging the city to reconsider the way it distributes TIRZ dollars — either by sunsetting them to pull money back into the struggling general fund, or moving high-priority projects from the city budget into the zones’ plans.
But the council is now heading into the final stretch of its budget season with little change to the funding mechanism now underwriting two major sports projects, and TIRZ critics are changing their tactics.
On Friday, Jones requested a special council meeting to add Councilman Jalen McKee-Rodriguez (D2) to the board of the Midtown TIRZ, one of the wealthiest zones in the city.
The move comes as city staff is recommending extending the zone’s life through 2060 to purchase land for the Spurs arena and finance upgrades to the Witte Museum, San Antonio Zoo, San Antonio Botanical Gardens and Brackenridge Park — among other future projects.
While those ideas are broadly supported by a board that includes Councilwoman Sukh Kaur (D1) and representatives from the entities receiving funding, McKee-Rodriguez said Tuesday that the city needs to start preparing for the next round of TIRZ funding, which private developers are already starting to line up for.
“The goal to extend the TIRZ through 2060 is largely for flexibility, but that grants hundreds of millions of dollars … which I worry have the potential to be exploited or treated as a blank check to developers,” McKee-Rodriguez said Tuesday.
The Midtown TIRZ is projected to collect roughly $200 million over the next 15 years — more than is needed for the projects it’s been committed to — but not enough to start issuing bond for those projects without the 2060 extension.
McKee-Rodriguez asked city staff to start preparing a plan for the remaining funds that could be used like the city’s affordable housing bond, funding deeply affordable housing, a low-barrier shelter and permanent supportive housing.
That would finally put the zone in alignment with a TIRZ policy that past council members created in 2022, mandating the zones’ projects promote housing affordability.
McKee-Rodriguez said in an interview Tuesday that he asked the mayor to put him on the board, since some of the projects are now in his Eastside council district.
The council will vote Thursday on whether to expand the board’s membership — a day before the Midtown TIRZ votes on its next batch of projects, and a week before all of the zones’ projects come before the full council for approval on Sept. 10.
Potential for ‘great things’
The latest plans to rein in TIRZ spending come as the critics of the zones say the city is no longer allowing them to sunset as originally intended.
What started as a tool to concentrate resources in blighted areas has turned into a borrowing mechanism financing large projects — and now seems unlikely to go away as the city faces diminished bond capacity for big infrastructure needs.
“The Midtown TIRZ is an incredibly healthy fund, and when we first reestablished the zone and reoriented around our city properties, it made sense,” McKee-Rodriguez said at the budget work session on Tuesday. “Especially as it took tens of millions of [dollars worth of] projects out of the pool for the 2022 bond and future bond programs.”
McKee-Rodriguez is fresh off his own TIRZ victory on the East Side, where the development tool is now helping turn residents’ dreams of a new senior center and community pool into a reality.
He told the San Antonio Report last month that the Inner City TIRZ board drew inspiration from the financing model for the Spurs’ arena deal — which leveraged TIRZ dollars to issue debt like a bond program.
“TIRZ zones have the potential to be used for great things, and as a tool of equity when we’re doing what they’re designed to do,” McKee-Rodriguez said Tuesday.
“The reason TIRZ have become more controversial is because some of them have deviated [from that], and we’re watching TIRZ dollars fund some of the most controversial projects for any community — namely sports venues.”
Key to the Eastside plans was a TIRZ board that includes McKee-Rodriguez and many of his political allies: Councilwoman Teri Castillo (D5), progressive organizers Valerie Reiffert and Alex Birnel, and McKee-Rodriguez’s longtime political consultant Mohammad Rasool.
Now Jones appears to be building on that approach to a policy fight that directs major city funding, but happens primarily outside of the public eye.
While city bond projects are chosen by a panel of community representatives, TIRZ projects are put forward by unelected boards, often including representatives from the organizations competing for its funding.
Now the same organizations receiving TIRZ money are also seeking millions of dollars in the city’s 2027 bond program, McKee-Rodriguez said, and the city needs to get ahead of the boards’ decisions, so that projects aren’t penciled around agreements elected leaders haven’t yet signed off on.
That’s why so many council members consider it too late to change course on the projects headed to their desks next week, even against the backdrop of a major budget deficit.
“I understand many will stand behind the decisions that have been made, and say these projects have been the will of this body and the previous one — but we cannot continue to do that,” McKee-Rodriguez said. “I would hate for us to allow these tools of equity to be exploited or further erode the trust that people already have, because they, again, they are such phenomenal tools.”
