CLEAR LAKE SHORES, Texas — Even though more than 160 residents signed a petition saying they want to vote on any town center plan that includes assuming debt, opinions from the city attorney and a bank’s lawyers suggest the city’s economic development corporation can ignore the petition and push ahead. This story was brought to you thanks to khou.com’s partnership with The Galveston County Daily News.
The city council is scheduled to discuss opinions issued by law firm Olson and Olson, which represents the city, as well as an attorney working for Wells Fargo, the bank from which the city’s economic development corporation is seeking to borrow $1.4 million to develop the town center.
The town center plan is designed to restrict development at the city’s entrance and block unattractive strip centers and big-box retailers from moving into the city’s prime real estate.
Officials hope the effort would attract small businesses to diversify its sales tax base, making the city less dependent on Home Depot and Target.
The city’s first attempt to borrow the money was thwarted when a group led by former Mayor Katherine McIntyre gathered enough signatures to force the city to put the funding proposal up to an election.
The city’s economic development corporation then tried and once again McIntyre and company gathered enough signatures to force an election.
Or so it seemed.
While City Administrator Paul Shelley confirmed the petition had enough verified signatures to meet the requirement for calling an election, attorneys representing the city and the bank argue that the economic development corporation could push ahead anyway, because of a clause in the petition legislation.
"An election is not required to be held after the submission of a petition if the qualified citizens of the city have previously approved the undertaking of a specific project or that general type of project at an election," wrote Dan Pleitz, an attorney with law firm Naman, Howell, Smith and Lee, which represents Wells Fargo.
Pleitz wrote that because voters in 1996 approved creation of the economic development corporation they already had given the authority to the corporation to use money from the city’s half-cent sales tax to develop projects like the town center.
Because voters already gave that general authority to the economic development corporation, the city can push ahead without calling for an election, Pleitz said.
City attorney Loren B. Smith concurred with that opinion.
"I don’t see how they can ignore the petition," McIntyre said. "I don’t care what kind of legal loophole they think they have found. The issue here is people do not want a loan."
McIntyre is among a group that supports the town center concept but thinks it should be paid for in phases as money becomes available.
Town center supporters argue that approach would cost more money and would delay the project.
McIntyre rejected that argument.
"The problem is they look at one option at a time and they always go charging ahead without considering other options," she said.
While city council members are scheduled to meet in a closed-door session about the attorney’s opinions, councilman Charles Scoville issued a word of caution.
"It is something we had better think very carefully about before making a decision," he said.
"When I heard the argument being asserted, I had a real concern we make sure we adhere to the spirit of the law as well as the letter of the law."
