A stalemate between leadership of the city of Fort Worth and Tarrant Regional Water District has no solution in sight to free up local funds for the $1.17 billion Panther Island project.
The impasse has been ongoing for several months as Fort Worth officials have balked at extending a tax-increment financing (TIF) district, which is the local funding mechanism for the project, without a guarantee that the federal funds necessary for completing the project are forthcoming.
TRWD officials maintain that the TIF extension is critical to the issue of the $250 million in bonds approved by district voters in 2018. Without the extension, there won’t be enough revenue generated by the TIF to repay the bond debt within 40 years, according to the TRWD and TRVA Chief Financial Officer Sandy Newby.
As of Oct. 31, there was only $168,113 left in the TRVA operating budget for the Panther Island project. The TRVA board has adopted a 2020 operating budget of $36.6 million.
The City Council has discussed the TIF extension behind closed doors, according to a city spokesperson.
“The city maintains it would be irresponsible to extend the TIF without a clear path forward to securing federal funds,” City Manager David Cooke said in a statement to the Fort Worth Business Press.
However, Cooke, who also serves on the TRVA board, said the city also doesn’t want to hold up progress on the ambitious project, which involves digging a 1.5-mile bypass channel on the Trinity River. Channelization would provide flood control protection and create an 800-acre island with waterfront economic development opportunities.
“The city will continue progress related to relocation of utilities to ensure utilities do not keep the project from being shovel-ready if and when the project secures federal funds.
As part of the agreement among the project partners, which also includes Tarrant County, the city is responsible for relocating and upsizing utilities to clear a path for the channel and to make it possible for building development to occur.
Cooke has previously said that the utility work is estimated at about $80 million.
The impasse over the TIF extension comes as the partners implement the final recommendations of Dallas-based consulting firm, Riveron, which was contracted earlier this year to conduct a comprehensive review of the ambitious Panther Island project and its failure during the past few years to attract federal funds from the U.S. Army Corps of Engineers under the Trump administration.
Riveron’s recommendations included a re-organization of the management structure of the TRVA as well as redefining the project’s focus solely on flood control and improving transparency, communication and establishing a risk assessment vehicle for the various elements of the project.
As part of the re-organization, the position of TRVA executive director was eliminated and J.D. Granger, who held that position at a salary of more than $200,000 annually, was shifted into the ranks of the TRWD in a role focused on flood-control.
Earlier this month, the TRVA board hired retired Army Corps Mark Mazzanti as TRVA program manager at a contract rate of $25,000 per month for up to two years. The contract can be terminated at any time with 30 days notice.
In 2016, Corps authorized up to $526 million to be spent on the ambitious capital improvement project. The project has only been awarded about $60 million from previous federal administrations.
Local officials have requested an appropriation of federal funds of $36.7 million in 2020 and another $38.7 million in 2021 would keep the project on track for completion in 2028.
The project has been kept on track primarily through the $326 million in local funds from the partners, including a $200 million interest-free loan from the TRWD. The $168,113 is that remains from that loan.
Alarm over the project’s failure to attract federal funding was first raised by Mayor Betsy Price, whose meeting with White House officials last fall pointed to the project’s combination of flood control and economic development was sinking.
Riveron recommended separating the two components and moving economic development under city jurisdiction. Responsibility for flood control and recreation activity were transferred from TRVA to TRWD.
Scrutiny also focused on the to the optics of the project that was being managed by the Granger, the son of Republican Congresswoman Kay Granger, who has been the champion of the project and leader of efforts to secure federal dollars.
Since Price’s meeting with top federal officials, she and Republican Congressman Roger Williams of District 25, met with Trump Acting Chief of Staff Mick Mulvaney, who told them the project could be eligible for up to $250 million in federal money to pay for flood control improvements.
TRWD officials are still waiting to find out whether any federal Corps money will be appropriated in the 2020 fiscal year.