Pasadena wrestles over economic development
Council members call for fresh blood after agency is dogged by criticism
City officials in Pasadena will try to rescue their economic development agency Monday as it remains dogged by criticism over millions of dollars in unspent project funds, an investigation into secret — and maybe illegal — meetings and expired board terms that have left it rudderless.
Pasadena Second Century Corporation, or PSCC, has become a political football. Supporters say the 18-year-old agency has helped attract major industry to this port city of about 150,000, including companies from as far away as Japan and big names like Silver Eagle Distributors.
But some City Council members are calling for fresh blood on the mayor-appointed, taxpayer-funded board. They point to a recent string of bureaucratic snafus and hint at deeper problems with the agency, which has struggled to deliver on some high-profile projects within the past decade.
And they say it’s operated under the thumb of outgoing Mayor Johnny Isbell and board chairman Roy D. Mease, who are longtime friends. Neither responded to interview requests.
The strife over the board points to a bigger power struggle over economic disparities between the primarily Anglo south side of Pasadena and its mostly Latino north side, where some have contended the PSCC hasn’t completed enough projects. Isbell pushed for a charter change that would have eliminated some single-member districts and thus diluted Latino voting strength, a federal judge ruled, directing the city to use its old voting lines in the May municipal elections.
“The new board needs to win back the credibility not only of the City Council but also of the public,” said Ornaldo Ybarra, a north-side councilman who is on the mayor’s list of appointees for new PSCC board members. “There are a lot of negative stories that have come out.
A lot of people are questioning the competency of the board.”
In the background
Economic development corporations are big business in Texas, garnering more than $737 million in sales tax in 2015. PSCC collects about $10 million a year through the city’s half-cent sales tax, making it one of the best-financed in the state. “Type B” corporations like Pasadena’s can spend money on incentives and infrastructure projects tied to job creation, plus quality-of-life improvements like parks and sports facilities.
For years, PSCC operated with little controversy. Its board has voted nearly unanimously on almost every item that has come before it during the past few years, a review of its minutes shows.
Mease, a lawyer, has served as its chairman since 2009. He also serves as a commissioner for the Port of Houston Authority and for years has held the lucrative contract to collect delinquent taxes for the city. The contract also will be discussed at Monday’s meeting.
The bulk of PSCC’s spending is on infrastructure projects that typically attract little media attention. But it has had headline-grabbing deals fall apart within the past few years, including abandoned plans to spend more than $4 million on the renovation of a building donated to the city by AT&T. It also has taken heat for the collapse of a deal that would have expanded development near its convention center.
“Time after time and project after project, this board has disappointed the council and really has disappointed the citizens of Pasadena,” Ybarra said during a meeting earlier this month.
But the board’s executive director, Paul Davis, said PSCC has served the city well by investing in projects that are critical for attracting developers, like having a good water and sewer system.
Davis said PSCC has had several big wins recently, including attracting Emerson Process Management with an incentive agreement that included about $700,000 in tax abatements over a 10-year period.
Consider, he said, the tax infusion from Emerson’s estimated $27 million new building.
The Emerson agreement split the City Council, passing by only one vote.
Davis defended the deal, saying there is fierce competition among cities along the Gulf Coast to attract and retain businesses.
“We don’t empty the fruit basket for anybody,” he said. “If anything, we’re on the more conservative end of incentives than any community I know.”
Controversial meeting
Recently, the board has faced sharp criticism for meetings last November.
Mease told the Pasadena Citizen that board members were intentionally divided into two groups on Nov. 28 to avoid open-meeting requirements. They were briefed on a project spearheaded by a politically connected construction company.
A council member learned about the two sessions and reached out to the Harris County Attorney’s Office, which referred the case to the District Attorney’s Office. The D.A.’s office is now investigating.
Davis said he did not plan those meetings and did not attend them. He said there were no minutes or recordings. However, he insisted they were legal.
“Because it was not posted does not make it an illegal meeting,” he said. “There was no agenda and no quorum and no action.”
Earlier this year, the agency took out an emergency $1 million loan after its attorneys warned that it needed to carry debt in order to operate under state statute, even though the PSCC has millions in the bank.
PSCC faced more heat when all of its board members’ terms lapsed in early March.
With those terms expired, the city has halted all work on about a dozen projects funded by PSCC until a new board can be appointed.
Isbell deferred the appointments at the last council meeting, Councilman Cody Ray Wheeler said, because he didn’t have the votes to reappoint former members associated with past problems.
‘Dirty trick’ by mayor?
The agenda for Monday’s City Council meeting includes a proposal for seven appointments to the PSCC board. Wheeler said the meeting is a “dirty trick” by the mayor, because it was scheduled lastminute and at 8:30 a.m., which makes it harder for council members with day jobs to attend. While he’s happy the mayor has proposed appointing Ybarra as a new member, he opposed the reappointments.
“The mayor is trying to stack it, so he still has control over the board, but it looks better for public perception,” he said. “He’s still going to ramrod things through anyway.”
Isbell has led the city, off and on, for 26 years but is now term-limited.