City of San Angelo to Subsidize Railport Outside City Limits

City Council will consider a two step move to facilitate the further development of the San Angelo Railport.  Step one is to sell city land to the Development Corporation for $1.4 million.  Step two is for Wisener Holdings, LLC dba South Plains Lamesa Rail Road, to pay $1 million in cash and for the remaining $400,000 subject to repayment under an economic development agreement.  

Council's background packet states:

COSADC will carry a loan for $400,000 payable over 5 years at $80,000 per year. Loan payments will be offset at a rate of 50% for capital investment in infrastructure improvements to the property.

If the Railport owner spends $160,000 per year on capital improvements over the next five years the city would forgive the $400,000 loan.   What are Weisner Holding's plans regarding capital improvements?  Surely, they have a budget for such.

The Railport is outside City limits so there are no taxes received by the City of San Angelo for the project.  City staff's background information makes no projections as the number of jobs added, a key goal of the Development Corporation.

This could be the second major subsidy for a capital project that provides no discernable direct jobs.  Council approved an 85% three year tax break worth $2.2 million to Zeppelin Battery Storage.  At least that project is within City limits.  

The item is included in the Consent Agenda, which means a member of Council needs to request it be moved to the Regular Agenda for the public to receive a staff presentation.  Even with such a request, a presentation is not assured.  

Hopefully, an astute member of City Council will pull the item to clarify who is actually paying closing costs.  The following is stated in one place:

The purchase price from the City will be the approximate appraised value of $1,400,000 plus closing costs. The sale price to SPLRR will be $1,400,000 plus closing costs.

Later the packet states:

Net cost is $400,000 plus closing costs.

In the end, who is paying those closing costs?

Why should the public be concerned?  Because not long ago Council required City retirees to pay an additional $500 annual deductible and an additional $250 co-pay for outpatient surgery.  

Two weeks later Council approved the initial tax abatement request from Peregrine Energy for the Zeppelin project.  That abatement was finalized last meeting.

West Texas is front and center for energy and projects requiring energy.  Council approved a letter of intent to sell land close to the Railport to Skybox Data Centers.  A new data center has the potential to create jobs.

The three new projects, Battery Port, Rail Port (expansion) and Data Port are in close proximity.  It remains to be seen how much citizens will subsidize Skybox's data center, but the first two total $2.6 million.  City retirees may be concerned about giveaways that could have been used to keep their coverage stable with no increases in insurance costs.

Update 3-31-25:  The Development Corporation approved the Railport land subsidy and indicated the operator "will spend alot more than $400,000 on improvements."  That left the impression that the interest free loan will be forgiven in total.

Update 4-1-25:  The $400,000 subsidy passed alongside other items in the Consent Agenda.