Katy Area EDC Continues Move Away from Helping Katy ISD Taxpayers

KATY (Covering Katy) – The Katy Area Economic Development Council is continuing to seek Waller County development deals. By doing so it has assumed functions that were not a part of its original charter of bringing a new tax base to the Katy Independent School District.

Leaders in Waller County and within the Katy ISD boarders believe this process has been so mishandled that it has become counterproductive to the organization’s future.

An email obtained by Covering Katy shows that KAEDC Vice Chair Katrina Katsarelis recently lobbied Waller County Judge Trey Duhon, asking him to use his influence to make it easier for her organization to operate in Waller County. Katsarelis was essentially asking Duhon to strong-arm the county’s economic development chief into letting the KAEDC operate in Waller County under a memorandum of understanding that’s been in place since 2003. Duhon has no control over which entities are part of the memorandum of understanding, and he’s refused to use his power to pressure the county’s economic development chief.

Making matters worse is that the KAEDC was originally part of the memorandum of understanding but divorced itself from the agreement in December of 2006. Now the party that requested the divorce essentially wants to force a new marriage.

Some Waller County officials believe the timing of Katsarelis’ request was not good and seems to indicate that she did not do her homework before stepping into a growing inferno of anger toward the KAEDC in Waller County. If she’d prepared by watching the Waller County Commissioners Court she’d have been aware that members are extremely upset about the one and only development deal where the KAEDC was given authority to negotiate tax abatement deals. That deal brought a Rooms To Go showroom and warehouse to the Waller County portion of the Katy area a decade ago.

During the April 6 meeting of the Waller County Commissioners Court, Commissioner John Amsler called a road reimbursement agreement negotiated during the Rooms To Go project “extortion.” In a public meeting this week Amsler suggested that Waller County consider taking legal action.

“We need to be on guard against the feral hogs and the werewolves out there,” Amsler said in reference to the road improvement deal that left Waller County with a $3.3 million bill that some say could have been paid by using other mechanisms.

The original purpose of the KAEDC was to promote economic development within the boundaries of Katy ISD, but taxes from the Rooms To Go project go to the Royal Independent School District. Given its proximity to the Katy area, it’s likely that the company’s employees will live within the boundaries of Katy ISD. That means Royal ISD gets all the tax benefits, and Katy ISD absorbs the cost of educating the students of Rooms To Go employees.

The same is true of the recently announced Amazon distribution facility that’s expected to employ at least 1,000 people. Royal ISD receives the tax benefits but it’s highly likely that Katy ISD will be burdened with providing educational services for most of its employees’ children. The KAEDC has boldly claimed to have been primarily responsible for the Amazon deal, but that has been disputed by officials in the City of Katy and in Waller County.

“The KAEDC’s original mission was to promote economic development in the area coterminous with the boundaries of Katy ISD,” said an email written by a well-respected founding member of the KAEDC organization. “The objective was to improve funding for Katy ISD and lessen the (tax) burden on residential property owners. Also to promote job creation in the area,” the email said.

Katy ISD is paying $15,000 per year to be a member of the KAEDC, while Royal ISD pays nothing because it is not a member.

Dues are not the only contribution that Katy ISD has made to help grow the KAEDC. When the organization was struggling in its early years, documents obtained by Covering Katy show that the school district provided office space at the Merrell Center for a nominal cost.

In an April 6, 2004, value analysis conducted by Katy ISD, the annual market value placed on the 1,530 square feet provided to the KAEDC was $22,950 per year. The KAEDC was charged just $1 per year.

Additional amenities included in the deal were a staffed reception area, free parking, on-site cafeteria, large group meeting spaces, technology infrastructure including data drops and on-site technology personnel.

The KAEDC moved out of the Merrell Center at some point during the Frailey Administration. It was at that point when the school district began paying dues to belong to the KAEDC.

What is interesting is that the KAEDC was negotiating the Rooms To Go deal, which benefits Royal ISD, while at the same time it was receiving free rent from Katy ISD.

Katsarelis declined to be interview for this story either this week or next week.

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