Greetings and welcome back to ZacCast, the official podcast of local government nerdery of all shapes and sizes. I'm Chad, that's Patrick, and we've got, uh, some really interesting topics to talk about today. We're gonna talk about, uh, a bill in the state legislature that may or may not be functionally eliminating home rule. Uh, we're gonna talk about how the recent property tax, um, appraisal caps and revenue cap rules may be causing some issues with your economic development and how you need to account for that. And then we're gonna hit on some fifteen-minute cities. So a lot to talk about. Let's go ahead and dive in. But first, Patrick, how are you doing?

I'm good, brother. How are you?

I'm doing great as always.

As always.

You know, life is just busy and crazy and chaotic. Days fly by, uh, but, you know, what else are you gonna do?

Yeah, it's fun. Y-you have a few more kids than I do, so your, your days are a little more hectic than mine. But just with two on my end, it's, uh, it, it can be quite a bit and a lot. But yeah, uh, absolutely, days are flying by. Spring is, spring is in the air. You can... You know, spring break starts next week, so we're, uh, uh, you know, I'm sure everybody's about to jump on the road and start having some fun there. Uh, and last night I got to hang out with, uh, our old friend Brittany Huff-

Oh, yeah

... as she hosted the, uh, UMANT Exec Connect. I got to talk to a bunch of up-and-coming, uh, public administrators, which was really fun and, and really kinda dig into that life. Had a lot of family questions, actually, at that, like, how do you, how do you handle life-family balance? And so, um, and got a lot of, uh, lot of praise for our parental leave, uh, stances when we were city managers about the, uh, six weeks of parental leave that we put in place. So, um, yeah, so-

That we put in place after we had all of our kids.

Yeah. Exactly. We did have our kids, and then we're like, "You know what? Mm, maybe we need some parental leave, uh, here to help some people out." So, um, you know, pretty cool process. Got to talk about that and, uh, got to sit with, uh, Paulette Hartman, the assistant city manager in North Richland Hills, big, uh, big-time city manager in the state of Texas and, uh, has really worked in small cities and, uh, mid-size large cities as well. Uh, and hear Paulette and how she does life, uh, family-life balance, that was pretty cool. Uh, she's got a, a really good setup and a, a husband who's a, who also is a high performer, and kinda listening to her talk about having two high performers in a marriage and how they do it. Uh, I know you, you are like that as well. Your, your wife is an extremely high performer, and you guys make it work with all of your children, uh, so which is, you know, it gets cheaper by the dozen in your house at some point, if you count the dogs.

Yeah. Honestly, the only reason, the only reason that we make it work is because she's a high performer and can coordinate everything.

Yeah.

I'm just along for the ride for the most part.

Absolutely. So all right, man, let's, let's get into our first topic. So, uh, there's a Texas Monthly article we will, uh, link in our show notes, but there's a Texas Monthly article. Uh, can you give me the title of that article, Chad?

Yes. It is How the Texas GOP Became the Party of Big Government. Michael Hardy. I think it was published yesterday.

Yeah. So, you know, really goes into kind of, um, all of the different things that the state has done, uh, to basically create larger state government and take away from the more localized form of, of government that we have in Texas at the home rule city level. Thought it was a really interesting article. I thought it... I, I thought the, the discussion about the dichotomy between, um, the different types of conservatives that we used to have in the state of Texas and it kinda took control of Texas, so like your, uh, like your Governor Bushes of the world, right? Uh, and how they handled the economic development and how they handled, um, you know, being a business-friendly climate and really pushing things down to the locals and the locals having a lot of influence on that process. Um, and then, you know, Governor Abbott in, in his couple of terms in office and the differences that we're seeing from this Texas legislature now versus the Texas legislature we saw during Bush's terms and how the leg is really kind of trying to incorporate things at the state level, uh, through, you know, mandates, uh, you know. There were a couple examples given, some of them better than others. Um, you know, but talking about like ride-sharing and rules on ride-sharing and, uh, you know, different, different rules on like development shot clocks and, and things like that that have been put in place and then obviously like the taxation rules that we've seen. But also it goes into another bill that has been filed that, uh, it, it doesn't directly say that it's gonna take away home rule status from cities, but it basically would take away the ability for a, for a city. It's a, a bill filed by, uh, Dustin Burrows out of the Lubbock area, but is a bill that would take away, uh, cities' ability to regulate specific areas that the state would regulate. That's basically the way that they formulated it. So, you know, like health and human services and, uh, different aspects of state government, like cities would be preempted from, from doing anything or forming their own ordinances there. Um, you know, r-little refresher for folks who aren't like super city savvy, uh, on issues like this for kind of our private sector folks. There are mainly two different types of cities in the state of Texas. I mean, you can get into the different like type A, B, Cs. That's a little different. But, uh, you, you have general law municipalities, which basically can only do the things that they are statutorily allowed to do in the state of Texas. And once you reach five thousand in population under state code, you can become what's called a home rule city, where you pass your own charter, and you kinda become your own governmental authority that can do anything, uh, that you would like to do that is not preempted already by state statute. So it's kinda, you know, how that goes. So I, I think-

Or really that is n-explicitly prohibited, basically.

Explicitly, yeah, explicitly prohibited, uh, by the state. Uh, so obviously a home rule city has the ability to do a lot more and a lot more things, and they typically, because they're a larger city, you know, they perform some roles that general law municipalities don't really, uh, perform. So, um-It was a, it's, it's a very interesting read. I'm curious what your take is on that, Chad, on kind of, you know, looking through and seeing where the state is going. Like, what, what, where do you, where do you see things?

So first of all, this is House Bill 2127. There's a companion bill, Senate Bill 814. Essentially, this is preempting anything that the state is, is already doing for agriculture, finance, insurance, labor, natural resources, and occupations, like all those codes. Anything that the state has already done, like cities can no longer have any, any role in, in regulating those. Um, interestingly, it explicitly removes, uh, official and qualified immunity, which whatever, okay. I mean, I, I, I am a, not a fan of qualified immunity, so you know, that part's fine, but it's interesting that this is what the state decides to remove qualified immunity for. But the argument for this is that there's over time develops a patchwork of regulations from city to city, and, you know, it makes it really hard to do business because you have to figure out what the city laws are and ordinances are, which, okay, like, that's an argument, right? But that's also an argument to get rid of our entire federal system.

Yeah.

Which none of these lawmakers would do, right? Or would advocate for. C- I mean, could you imagine... And this is an argument that we've made from our second podcast episode where we also talked about Dustin Burrows and the infamous Bonnen tapes.

Yep.

The same people making these arguments would never allow that argument to be made from Washington.

Correct.

So yeah, maybe there is a patchwork of certain regulations when it comes to land use, uh, when it comes to, um, you know, gas drilling, when it comes to red light cameras and various other things. But the whole point of self-government, and especially local government, is to try different things and see what works and see how you can adapt it to your specific environment. And what the state has continually done over the past, uh, especially the past 10 years, is just try to find ways to, to prevent any of that kind of experimentation and just impose what they think is good from, from the legislature level down. The worst part about this is that because of where demographics have shifted in the state, and the article t- kind of talks about this, about how big cities used to be the, you know, Republican cities.

Mm-hmm.

And now big cities are not Republican cities. There's only one big city that is still kind of Republican, barely, and that's Fort Worth.

Mm-hmm.

Um, and so the, there's this big divide between rural and urban legislative interests, which is really kind of, kind of funny because if the primary base is kind of suburban and kind of rural for, for most of the Republican legislature, legislate- legislators versus urban for the Democratic legislators, then are, like, do they really even... These rules don't really even affect them.

Right.

You know?

Yeah.

Like, or, or most of their constituents, right? 'Cause they're not living in Denton, where the article starts off with the, the fracking, um, fracking restrictions. So, so it's kind of, it's kind of a culture war question, which is always frustrating to me, but at the end of the day, I mean, the argument that this patchwork is unacceptable is an argument to get rid of federalism writ large. And, and that's just not something that you would ever hear these people do. So, so it strikes me as hollow, and, a- and it comes across as sort of, uh, an argument of convenience. And on top of that, I mean, I just think it's a, I think it's a bad idea. I think that cities, where a decision can be made as close as possible to the people, that's where it should be made. And many of these types of decisions that this preemption bill will prevent are decisions that should be made at the municipal level.

Yeah.

You know, there, there is an argument to be made that, that some things, and we've talked about this with housing and with land use, right? Some things, there may be enough of a compelling state interest to at least make a case that certain zoning rules or land use rules or housing development rules or things like that, um, should have some state intervention, but this is just across the board, you can't do anything that we don't, that we don't allow. And, and, and it, there's an argument that this is essentially not just limiting, but potentially setting us on the course to get rid of home rule.

Yeah. And, and, and-

Which I think is kind of scary.

We, I, I think it's a, a pretty scary conversation, uh, you know, and two, two things on this topic. One, I think if you're a Republican in the state of Texas, and you're looking at this and you're listening to this, and, and I'm, I'm trying to tell you why you shouldn't do this, the first thing I would say to you is, "Hey, are you gonna like this when Democrats are elected, and they start telling you what your small town in rural Texas can't do?" Like that, you know, to think that Texas is gonna be a Republican majority state forever is just, it's a foolish thought. Like, it's just, it's... At some point, you're going to have a statewide elected office that's going to be won by a, a Democrat, right? And if that statewide elected office ends up being governor or lieutenant governor in the state of Texas, those are both very powerful positions to control legislative-

Especially lieutenant governor

... especially lieutenant governor under our constitution. It's just a very different state. Um, you know, we're taught in Texas history that lieutenant governor is actually a more powerful position in Texas than, uh, than governor, and it, it kinda is other than the veto pen, except the lieutenant governor really has the ultimate veto pen 'cause he can just not calendar an item, right? It ne- it doesn't even get through the Senate without, without the lieutenant governor. So, um, you know, I think that's the first point I'd make is, you know, hey, be careful what you wish for here. Like, I know that you're, you know, battling this cultural warfare, and you're trying to show that these mean, old little cities are, you know, a bunch of crazy people. Um, but it, it's, it's really not the case long term when you, when you look at it that this would be a wise decision.Um, the, the second thing is, is that when we look at our, the makeup of our legislature, and we look at what it's done to the people who would eventually become legislators, city council members, right, specifically, people who start at the smaller level and work their way up, um, we really have kinda killed off our civic, like, farm system in Texas, right? Like, it-- The, the divide between a conservative city council member and a conservative legislature is, is a, is a river now. Like, it, it's really, really wide, and because of that, we aren't putting a lot of locally elected officials in the legislature, which if you look at when the Republicans took over the state of Texas, they were taken over by a lot of locally elected council members, right, that ran for statewide office as Republicans for the first time. So there's a lot of history there that's important to look at, and, um, I just, you know, this ability to look at it, you know, the, the keeping up with the Ron DeSantises of the world. I mean, not just this bill, but if like you look at the, like the Austin, you know, turn Austin into a state entity bill that, that's been proposed where they basically wanna take away the right of Austin to be a city. Look, I, I'm an Aggie, right? I think Austin is as weird as can be, right? I know you went to that school for a little while, and it's... Never send your kid there. It's not a great place. But, um, you know, and I, I know it's, it's crazy different, but it's, it's like we're trying to keep up with Ron DeSantis in Florida and, and have like a little Disney argument here in Texas, right? Like, we just don't like what Austin's gonna do, so we're gonna create some, like, state-controlled special legislative district that's unelected and appointed, right? If you look at what, what's happening in Florida, that's, that's what happened to the Reedy Creek district there that controls the Disneyland resort areas, right? They basically took away this board, uh, and now they have this unelected board that's appointed by the governor's office, and it's just, it's, it just seems so undemocratic in, in the way that we do it. And so, um, that's gonna be the thing. When you, when you start to, you know, talk about the Don't Tread on Me flag, the Don't Tread on Me flag in Texas is, it's gonna come to a local city near you, right? Uh, and it's not gonna be a Tea Party revolution from the residents that are in that city. It's gonna be a revolution from that, the people in that city towards the state because things are going to get built, and things are going to happen that people do not like, and they're gonna blame those state legislators for that, right? Um-

Yeah. And the money and the population are in the places that are gonna be most affected by these things.

Correct. Yeah. Absolutely.

Right? Demographics are not always gonna be... It's not a straight line trend which just, like, maintains where we are today.

Yes.

There's a thousand people a day coming to Texas, and many of them are not conservative Republicans.

That's, that is correct.

Right?

Yeah. Uh-

I mean, as... Look, we don't get into politics. We try as much as possible not to, but, you know, your comment about if you're a Republican listening to this, just think about, you know, what if when eventually the tides do get turned, I think that's an important... It shouldn't be the only thing that you think about when you look at a policy preference, but there's this, uh, there's this concept of a veil of, veil of ignorance, I think is what it is, where, you know, you imagine that you are some sort of amorphous blob about to be born, and you have no idea who you're gonna be born to or where or if you're gonna have, you know, disabilities or if you're gonna be this or that or whatever. Like, you have no idea what your life is gonna be like without understanding what would be the most fair policy, you know, given that you don't know how it will actually impact you.

Yeah.

It's not the best framework for, for public policy.

Well, I mean, yeah.

But it's, it's instructive to think about, you know, at some point you're not gonna be in charge because things ebb and flow.

Correct.

Uh, and so at that point then, you know, what are you gonna do? But I think the most important thing is that for the benefit of the state as a whole, our Republican party should stop abandoning the city and start trying to take their ideas to the city-

Yeah

... instead of just saying, "No, you can't do anything."

Right.

Like, run for local office in these cities and bring your ideas there-

Right

... as opposed to just sitting off in, you know, in the legislative chambers and saying, "Stop doing anything I disagree with."

Yeah, so I-

Is there a better way to do it? Then do it.

Well, I, you know, I think, I, I, I think a good warning here, I mean, to, to talk to our conservative friends, right, to talk to even conservatives and libertarians in general, let's look at the Trump presidency for a minute, and I'm not getting hyper-political here. I'm just, I'm using a, a, a real example, uh, so don't, don't turn us off yet. Don't... When you look at the Trump presidency, Trump couldn't get a lot of things done legislatively, right? And so more than any president that we have seen probably in our history, he used the power of the executive order to dictate federal policy instead of using legislative ability to dictate federal policy. A lot of those things have been overturned by courts, overturned by the legislature, you know, o- overturned by a, a lot of different areas in, in the federal government, but he used that. So what was the repercussions for that? We get a Democrat elected, and President Biden uses the power of the pen to justify, you know, getting rid of student loan debt across the board, not for people who got screwed over in a public service program. A lot of our listeners were in that boat. I was. Um, but to just say, "Hey, we're gonna forgive ten thousand dollars of everybody's loan and twenty thousand dollars for anybody who had a Pell Grant," right? And to do it by pen and to really have not a lot of justification in the federal statute to be able to do it, but that empowerment came from the fact that we have historically now had president after president after president who has increased the power of the executive branch through executive orders. Uh, and it didn't start at Trump. It, it, it started well before that, but we're seeing this trendUm, go to avoidance of the legislature. And we have to be very careful with that at the state level. Like if we start dictating things from the state level, um, we've got to be very careful of what that impact is going to be when there's a flip in the party. And, and conservatives and libertarians alike are very upset about the student loan program, uh, issues. And my point is, is that that empowerment was felt by previous administrations that had an R next to their name, right? So we just be careful what you wish for and also understand that in government precedent is everything. So if it's been done and done successfully, somebody's going to figure out a way to stretch that rubber band just a little bit further, right? Our city attorney used to say, you would always just take that envelope and slide it just a little further, right? Um, and so, uh, in, in Joke Around, you actually made a comment on LinkedIn the other day that I thought was pretty funny where it was like, uh, somebody was talking about working at a city and, you know, working with somebody else in a city and how beneficial it was for them to work together. And you said, everybody needs somebody who says no in their life. And you were my no, right? Uh, because I, I just, I had no boundary. I would always push. I would always, I was, that was constant. I would always push and it would wear some of my employees out for sure. But you were always the person that would come in and, and shut the door that we actually didn't have on our offices and talk to me and say, "Hey, you can't do that. And this is why you can't do that. It's a, it's a no," right? Um, and so, and you need that. And like, I feel like the legislature needs, um, like a Rick Perry or a George Bush or somebody to just talk to them reasonably and say, "Guys, be very careful at what you're doing here," right? Um, they need a no person. They really need somebody to say no. So.

Yeah. Awesome. Okay. Well, end of home rule, possibly. That's fun stuff.

Yeah.

Um, let's talk about some, uh, some other bills that have recently been passed that also have unintended consequences. This is something that's been coming, uh, it's come up with us, uh, several times recently, actually, in some of our consulting work. And so I'll let you introduce it. Um, but because it's come up so frequently over the past month or two, uh, we thought it might be worth stepping outside of the consulting sort of billable hour uh, sort of framework and just, just talk about it publicly. So Patrick, why don't you go ahead and kind of introduce this one.

Yeah. So, uh, last legislative session, um, House Bill two was approved in the last legislative session that basically changed the-

Senate Bill two.

Sorry, Senate Bill two, that changed, um, how taxation in the state of Texas is collected by the localities. It changed. It used to be we had an eight percent rollback rate. So if a city went up and grabbed more than eight percent of revenue, uh, from existing revenue sources, uh, in the property tax side, then they would have to, you know, automatically, uh, or they could be rolled back-

No

... by residents-

Yes

... if they petition for it. Now, if they go above three and a half percent, uh, it calls for an automatic election that occurs, and it also kind of changed the way that some of the values come back into the city's general fund. And it's the, the impacts that nobody has thought about of Senate Bill two and how that has impacted economic development and incentive agreements. So a lot of cities have used, uh, TIRZ instruments, uh, TIP instruments, tax increment financing, uh, or tax increment reinvestment zones, uh, for years, uh, and have used that tool to fund economic development projects and to fund infrastructure projects within the area of development, right? Within the boundaries of that, that, that new development area. Uh, and we've seen it used in both commercial, industrial, residential. It's kind of used all across the board. We've seen it. It was originally a tool that was built for brownfield re-redevelopment, but we see it used a ton in greenfield development, uh, to kind of justify the development itself internally and then to pay for the infrastructure of that development over time. Uh, now I will say asterisks, we never see in those TIRZ, uh, calculations a depreciation cost of the, that asset. We just pay back the asset over thirty years, but forget after thirty years, we may actually have to replace part of those assets, right? So, um, im-important just to say out loud. But what we've seen, and you actually saw the city of Dallas is, is trying to kind of negate, uh, the impact of this, but because of Senate Bill two and the three and a half percent cap, TIRZ value by a lot of appraisal districts, uh, and, and we haven't gotten a lot of, of, uh, explanation on it, but their interpretation of Senate Bill two is, is that TIRZ value comes in as old, um, old, old, old, uh, value, right? So, uh, what that means is, is that, uh, instead of when the TIRZ rolls off the books and you're no longer making a TIRZ contribution to a TIRZ fund, and that money rolls into your general fund, instead of being shown as new value where you don't have a tax cap of three and a half percent, it's shown as old value that impacts your three and a half percent, which, you know, obviously if this TIRZ is large enough and it's, you know, a lot of these things come in and they have got billions of dollars of value attached to them, if they're, if they're large enough, then it's gonna put you in a situation where you're gonna hit your three and a half percent, and then you're gonna need to compress your tax rate significantly to handle that, even though you may have modeled the fact that that TIRZ money was gonna come in, and it was gonna support some type of city service twenty or thirty years ago, you, you now have to really work within it. So we've seen some cities do some things to account for that. Some of it is a little sketch. Uh, some of it is, uh, is legal. Uh, we've seen the extension of TIRZ agreements, uh, to benefit that direct development, which, you know, has, in my opinion, has some kind of, uh, taxpayer equality issues to it, um, because, you know, it's, it's only going back into that TIRZ to directly benefit that TIRZ, even though it, it is outside the original term and use of the TIRZ. But the only way they can keep it from compressing the citywide tax rate is, uh, is, is basically to, to keep the TIRZ alive and to figure out other funding sources within that TIRZ for economic development incentives and so forth and so on. Road reconstruction, they just kind of recycle the same money again, right, within that area. So that's one way to kind of avoid a compression. Um, you know, we've also seen some, some things like, uh, the city of Dallas has announced that-They're gonna take their TIRZ funding, and they're gonna put it into what they call a transportation fund. Um, and that way it doesn't come into their general fund, and they can try to work to avoid the compression that way, and they can direct expenses specifically for transportation. I think that's a little statutorily sketchy. I'm not an attorney, but the TIRZ, uh, statute is pretty specific on where and how and the boundary in which you use that funding. So you would have to really kinda justify every dollar that gets spent, uh, to a geographic area or to something that directly supports the TIRZ. Um, and so that could be difficult for Dallas to do if they're just gonna put it in one transportation fund and then go spend it on roads and things like that and, and try to... I, I mean, it really is just a straight avoidance of putting it into your general fund so that it doesn't compress tax rate. Um, so those are kinda the, the different areas that we're seeing people that are dealing with existing TIRZ. Because if you've already got a TIRZ out there, there's very little you can do to fix the existing problem, right? But on new agreements, we've had a lot of conversations with municipalities that are looking at bringing on new TIRZ agreements 'cause developers love 'em as a financing instrument, right? It allows them to go out and get debt, finance public infrastructure. They get an increment to pay for that debt, and it just kinda works for both parties. And so TIRZ agreements have been fairly successful on large-scale developments. But on new developments, uh, you know, if a city takes that TIRZ and does it the typical way, then they're gonna see that compression, uh, on the back end of the TIRZ agreement. So, you know, let's say they bring in a TIRZ-

Can, can we clarify exactly how that, that math works?

Yeah. So, uh, on a TIRZ, you have a base value, which is basically your existing value. If it's brownfield, it's the existing value of all of the dirt and the improvements. If it's green value, if it's green, um, development, then, or greenfield development, then it's, uh-

It's just land

... it's just land, right? That's your base value.

Right.

Yep.

So say that your base value is $100 million.

Correct. So base value is $100 million.

All right. The idea is you're gonna, you're gonna put investments into this area to stimulate redevelopment or new development.

Right.

And then anything, any growth above that is going to be reinvested back into that district, right? So say at the end of the TIRZ, it's now worth a billion dollars, okay? So you've got $900 million of incremental-

Correct

... value. That's gonna come onto your-

Right

... books as existing values, right? Because the property existed in your city, right?

In 20 years or 30 years, whenever the TIRZ term is, yeah.

Yeah. Because when you look at the no new revenue, it's looking at same over same, same properties over same properties, right?

Right.

So the, the base value has already been factored into your no new revenue, but it's the same property, so now the increment is gonna be added in, and you're gonna go from 100 million to a billion. That's a, you know, 900% increase or whatever-

Yeah

... or 1000% increase. Um, and that's going to be factored into your 3.5%.

It is. And because appraisal districts-

Right. So that's why you talk about that's gonna start compressing your, your, your rate. Uh-

It's gonna start compressing your tax rate to stay below the 3.5%.

Yeah.

Or you're gonna go to your voters, which we haven't seen anybody really do, right? Uh, you gotta go to your voters and convince them that they're, they're really not getting a tax increase even though they're... You know, like you, you've gotta like, do the, the conversation, which is really tough to have at a ballot box.

Right.

Um-

Because the, because the people in that district have already been paying the tax.

That's correct. Yeah.

It's just been, it's just been siphoned off to go back into that district.

Correct.

So really there's no additional increase in taxes paid. It's just the way that the calculations work. It looks like you're generating a significant amount of new tax revenue.

Yeah.

It looks like you had 1000% increase in the values in that, in that area.

Cor-correct. And, and so what, what we've seen in communities that have like significant finance departments, right? Like larger communities that have multiple CPAs that work in their finance department and, and multiple different budget and analysis people that are looking at things like this on a, on a constant basis is, is we have seen them change the way they do TIRZ districts. So the, the typical way that a TIRZ is done is just like you said, there's a base value, then there's an increment value, and there's a percentage participation in the increment value for the revenue that the city generates that goes back into the TIRZ fund. Sometimes it's 100%, sometimes it's 80, sometimes it's 50. It's all over the board based on what the city's, uh, TIRZ policy is. Um, you know, and then you get participation from a county, you get participation from a college district. Everybody can kinda chip in on that TIRZ and participate at some level. So in Tarrant County, for example, Tarrant County has a, a, a TIRZ, uh, rule that if you hit a certain value, a certain number of jobs, then they participate at 50%, right? Which is how Tarrant County operates. And then for like super sized projects, they participate at like 70%, and that's the highest mark they do. Whereas a lot of cities will participate up to like 85 or 90% within those TIRZ districts. So but way one is you just go through and, uh, you do it like an old TIRZ district, and after 20 or 30 years of all the TIRZ debt getting paid off and the TIRZ basically being closed out, that money then comes back into your general fund. Uh, and under today's rules, that would compress that tax rate. The other way that we've seen these cities that have all these very qualified individuals look at this is, is they build a TIRZ, but they don't do the reimbursement through, uh, directly to the TIRZ fund. They actually bring all of the funds into the general fund, and then they do a 380 reimbursement back to the TIRZ fund. Um, what that means is, is that the 380, or when you, when you bring that money in, all of that new value hits the general fund in the year in which the improvement is done, right? And the city gets the benefit of the larger pool of money, even though they're using a Chapter 380 agreement to send that money back to the TIRZ fund, right? But instead of doing it as a, um, a rebate prior to hitting the general fund, they do it as a rebate after hitting the general fund, uh, which you would need to take into account in like any of your like general fund reserve policies and things like that, right? Uh, and, and how you, you do that. But what that does is, is let's say it's, let's say it's a $2.4 billion improvement TIRZ, 'cause we ran this number for a city the other day, and that's the number I, I have on the top of my head.If you're able to go up three point four nine percent on your tax rates, and your tax rate has an additional two point four billion dollars of improvement value, even though you're not getting that money, you're sending it to a TIRZ fund, you're leaving the ability to go capture almost nine hundred thousand dollars in additional revenue from existing tax base by not bringing that in through a Chapter three eighty agreement. If you do it through a typical TIRZ, you would not... And it's basically just, it's three and a half percent of a bigger pie in your general fund, right, than it would be if it was directed straight to a TIRZ fund. Does that make sense, Chad?

So essentially what, what happens though in that circumstance is that you're getting the compression as you go as opposed to all at once.

Well, you're not, 'cause new value doesn't compress.

Well, if it's new development, yes.

Correct. So you're bringing-

Um-

... new development in where it doesn't have an impact on your compression, and in the future year, that n-

Well, but let's say, say, say you add a billion dollar, you know, warehouse or something-

Uh-huh

... or, or, or data processing center. So the first year that's not gonna compress, but then as the, as the value changes over time, it would, but you're not getting the benefit of the actual revenue to the general fund.

Correct.

Right? But whatever that initial new development revenue is, what you're saying is by doing the three eighty, you're not gonna get hit as if that's existing value.

Correct. At the end of the TIRZ agreement, you're not gonna get hit-

Yeah

... with a bunch of compression when-

So theoretically, even though it would still compress-

Mm-hmm

... it's gonna be significantly less compression over time, and you'll get to do it incrementally.

Yeah. Well, it won't, it won't compress in year two. So, like, uh, I-

No, no, no.

Yeah.

Well, let's say, say you have a billion dollar development that's a new, new development that would-

Mm-hmm

... otherwise be in the TIRZ district, right? So you'd only have the base.

Correct.

In twenty years, you're gonna get hit with all of that as existing value. But if it's new development and you're three eighty- three eighty-ing it back, right-

Mm-hmm

... it's hitting your general fund as new, uh, as new value. So you're not gonna get compressed on that.

Correct.

But let's say that it increases to, you know, one point, one point oh five billion, right, for the next year, that's the value.

I gotcha. Okay.

That increment-

Yes

... you're gonna get compressed on.

That percent and a half-

Right

... additional, yeah.

Yeah.

Okay.

But that's still significantly less than you would be hit all at once when the TIRZ expires.

When you're talking about large scale commercial, um, and industrial development-

Or industrial or something like that, yeah

... the likelihood of a five percent increase per year is like slim to none.

Uh, yeah.

Right?

Uh, I-I'm just trying to-

'Cause-

... use round numbers that weren't too outrageous, like-

Or yeah, if you're talking about-

But, yeah

... like data center development, um, I mean-

It's, it's not gonna change that much at all.

Yeah, th-this, this may be the, uh, greatest amount of, of free advice we give on this podcast . Uh, but like a, a data center development, let's say they put in a four billion dollar data center development, right? That data center development is gonna, is gonna depreciate its overall value within like fifteen years, right? Whatever their depreciation schedule is. So you, you are gonna have depreciation that occurs. Now, the great thing about data centers rather than manufacturers, right, is they typically replace, uh, their personal property interior.

The personal equipment.

Right?

Yeah.

And so it kinda c- it, it, it goes down, and then it kinda pops back up, but it's new value pop, right, when it hits. So it doesn't really hit your compression line. Um, whereas on like a manufacturer, like you bring in an automotive manufacturer, they're gonna depreciate a lot of that equipment on the floor. So they build like a billion dollar building, and they have three billion dollars of equipment. Over the next twenty years, they depreciate down, and then they usually, uh... So you have declining value for twenty years, and then in like year twenty they retool, and then it starts over again, right? Uh, and then they ask for new abatements and, and all this... It's just, it's a constant-

Yeah. The replacement cycle on-

Yeah

... computers is much quicker.

Correct. So, um, so like the Sherman development, where you have TI and a couple other, uh, like, uh, Worldcom, I think, or some of the other players that are out there that are building chip plants. Like chip plants depreciate in like seven years, right? Like they have a really fast depreciation schedule. Uh, so there's just, you know, those things, um... This is where we make the comment, uh, everybody has an economic development consultant, right? Like, they're, they're out there. We recommend like five or six of them to work with you to go negotiate with people. Where a lot of our cities, um, need us specifically is you need a fiscal economic development consultant. You need somebody who, when you're dealing with a, a, a, a deal of that size or you're dealing with a development that is, uh, of grand scale, the way that you structure your development agreement, the way that your, your development consultant structures that agreement could cost you, you know, in the case of the city we talked to earlier this week, could cost you the ability to capture nine hundred thousand dollars a year in revenue over the next thirty years, right? So paying somebody on the fiscal analysis side fifteen to twenty thousand dollars could save you nine hundred thousand dollars a year and, you know, basically twenty-five million dollars over the next thirty years, right? And so it's... Uh, you just, the, the mechanics of it are, are, are super complicated. Um, and but you kinda need somebody who deals in that. And, and that's the thing about cities from an economic development standpoint, um, those are big one-off deals. Like there are very few cities in the state of Texas who do a lot of those deals all the time, and so, you know, so there's not a lot of folks out there that are qualified to, to kinda have those discussions and those fiscal impact discussions, right? Whereas we're out there working for two hundred plus cities, and we get to see all of the different combinations that work and don't work and that type of stuff, and, uh, you know, it's just a, it's a, it's a benefit that we get, uh, to kinda be at thirty thousand feet and kinda see what everybody's doing. Uh, it can be, it can be really beneficial, and we like to pass that on to our other clients 'cause the city that I had a conversation with the other day, bringing on two point four billion dollars of value, they're not very big. I mean, size-wise, like they're less than, I think they're less than ten thousand in population, right? And they're doing a huge master plan development in their community and, and like that little decision could be super costly for them, right? Uh, whereas like if you're a Fort Worth or a Dallas or a Houston, if you make a little mistake on that, it may not be as big of a dealRight? Um, but it's, it's extremely important to look at and, and to know how those dollars are gonna impact you both today and twenty years from now.

Yep. I think at the end of the day, issues like this really emphasize the need to have simple rules for these complex systems because there's always gonna be some kind of weird edge case-

Yep

... that can just ensnare you. Um, and so the simpler that we can make the framework in which we operate, legislature, the less likely we're gonna run into these kinds of problems and, and, and these kind of gotchas. So, uh, and that's also true at the local level too, right?

Right.

You know, the, the more complex that you try to make your rules to account for all of these different possible scenarios, the more brittle things are going to be.

Yeah.

Right? So instead of trying to account for every possible scenario, try to make things simple. Try to make your framework for operating and developing simple so that you can be a little bit more resilient-

Mm-hmm

... over time. Speaking of resiliency, we'll jump over to our final topic. And I, I'm not really sure, Patrick, how I wanna approach this. I think-

Well, first explain what a fifteen-minute city is

... I think I know, so yeah. So-

Yeah

... so, so if you'll recall, uh, we, we spoke with, uh, Milford John Williams from Lake Jackson about bicycling and-

Mm-hmm

... towards the end of that conversation, uh, he mentioned the, the fifteen-minute city concept. So we talked about it just a little bit. Um, but the basic idea i-is sort of this urban planning concept. It's very similar to like the urban village. Um, in truth, a fifteen-minute city is basically just how we used to build cities before about a hundred years ago. And the idea is that you can, you can handle and, and engage in the majority of daily needs that you have within about a fifteen-minute walk or bike ride. You know, things are pretty close to you. And so a few years ago, the, uh, the mayor, mayor of Paris, France, made this part of her campaign. She wanted to redesign Paris to become a fifteen-minute city, and it's really sort of become more into... It's gotten more into the zeitgeist, into like the popular understanding as opposed to just being this urban planning concept. Um, and of course, this also coupled with COVID and all the lockdowns and everything else. And so, um, as is our want, we have kind of turned it into a conspiracy theory, um, that, you know, fifteen-minute cities are going to be used as a sort of authoritarian mechanism for keeping people in certain zones of their city, right? Like, you're gonna have your jobs and your groceries and your haircut, you know, barbershops and culture and all this stuff in your fifteen-minute zone, and you're gonna be-- that's where you're gonna, you know, basically live out your life, which is, which is a bit nutty for me. Um, so, so one angle that I'd like to talk about is what, what does a fifteen-minute city actually mean and, and how can we sort of allay concerns about it? Because really it's not super revolutionary, and in fact, in most big cities, especially those that are walkable, like you, you already have a fifteen-minute city.

Right.

But, uh, but second, there is... So we're gonna link to it. There's a, a, a really good critique of the concept from, uh, Alain Bertaud, who is a, uh, an urban economist. He worked for the, uh, World Bank forever, and he, uh, he wrote a really good book called Order Without Design, which is basically urban economics for city planners, so that we can kind of understand how economics and markets shape the way that cities develop, even though we try to control it, right, through land use planning and, and, and, and things like that. Um, and so he has a really interesting critique of it that basically just says like the market's gonna work the way that it's gonna work, right? And so you, you can't, you can't hope to have every need for a resident located within a certain small-

Yeah

... portion of the city, like right close to them, because that's going to distort how your city functions as an actual labor market and how regions function as a labor market. So, so one thing to note, if any of you listening is, is interested in the urban village concept or the fifteen-minute cities concept and this is something that you're talking through and, and, and kind of wanting to put into your planning documents, don't talk about jobs as a part of your fifteen-minute city because it doesn't work, just from an economic standpoint, right? There's absolutely nothing wrong in my mind as someone who lives in a place where I have a fifteen-minute driving city. Um, you know, like I, I can get most of the things I need, but I have to drive fifteen minutes, right? I would love to live in a place where I could walk fifteen minutes. That's about three-quarters-

Yeah

... of a mile. You know, if I could walk to get most of my basic needs, that'd be amazing, but I, I don't live in that, that kind of area. But we're never gonna be able to get jobs to be a part of that. So, so don't ex- don't overextend with your, your sort of planning, uh, processes and your utopian vision for, for your urban villages. You just have to realize that people are still gonna have to commute-

Yeah

... uh, in order for your labor market to function effectively. But the other question I have is, or the other thing that, that I am interested in and possibly exploring a little bit with you, Patrick, is, is how to address the conspiracy side if you're, uh, a city planner or city manager, you know, just trying to build more walkable areas, more compact development, which we know is more fiscally productive because it requires less infrastructure. Um, you know, it, it provides for higher value per acre from a both property tax, from a revenue stand-- uh, from a sales tax standpoint. And so there, there are, there are so many fiscal and social benefits that come from a building in a little bit more of a compact way, and this is a, this is a concept that we're starting to really kinda see expand, uh, into city planning, into the public consciousness.So how do we address the conspiracy side of it, you know, as public servants? So those are kind of the two aspects that I'm, I'm curious about your opinions on.

So first off, I, I think the easiest way to address the conspiracy side of just government in general is to communicate more openly and honestly with people, right? It's to use data and to constantly communicate. And we do not, as public administrators, arm ourselves with data or information, nor are we willing in a lot of cases to put ourselves on the line to have conversations because we are fearful that our opinions may not align with those opinions of the community. We have lost within the career field, uh, in city management, the gumption to not be worried about getting terminated from your city, right? We-- If you look at tenure in, in city managers lately, people are staying longer, which tells me we're not being as honest as we need to be. Just throwing that out there, right? Um, what made me a great city manager-

Hold on a second. So you, so you're saying longevity is a sign of not doing-

Longevity-

... your job or, or not doing it necessarily to the extent that maybe would be the most beneficial? Like-

So you remember as a, as a, like a baby or when you, you had your kids, there are... there's the, it's a, it's a, it's a toy where there are shapes, and there are, there are wood blocks, and they're different colors, and every shape goes into the specific hole, right? And sometimes there's numbers aligned for it. But, you know, you put the triangle in this hole, and you put the square in this hole, and you put the rectangle over here, right? And, uh, you put the circle over here, and, like, everything fits in there. I, I am a big believer that every city manager has a fit in a community, right? And you do not properly explore that fit if you get there. Now, there are great city managers like Tom Hart who were in Grand Prairie forever, and, and that was just a fit for him, right? But he was brutally honest in, in how he did things from that city perspective. Uh, and it created a culture in that city that is different than, than other places as well. But I think in, in some other communities that we have, we have a lack, uh-- we're so worried about keeping our jobs that we are not doing the professional, aggressive, truth-finding side of the business, right? We are supposed to talk about the pros and the cons, not just the pros because they want to do it, and it's the cool, shiny thing. We also have to talk about the cons. Um, and we don't always do that well within our career field. So yeah, I, I am kinda throwing it out there, like, as a challenge to people that work in city management and city governments. We have to... got to stop worrying about being terminated. It's, it's-- That's why you have a contract. That's why you have a severance package. Um, you know, do the general thing for six months, hang out, make everybody happy, and after six months, make some changes. Do some things that need to happen, uh, and be honest with your council members, uh, and, and who's there. And, and because of that, yeah, we've, we've seen longer tenure. Some of that's COVID, to be fair. Uh, like, nobody moved during COVID. Um, but we still have seen very little shifting within the city management field, uh, over the past couple of years. So that's, that's my first statement. We have to be more honest with people, um, about the way things are going. The second side of this is we have to stop being focused on density, not density, and having the cultural arguments of single-family households, uh, track homes versus apartments versus condos versus, you know. We have got to stop looking at everything based on, "I don't want those people in my backyard," right, or, "I don't want that type of development in my community." Uh, and we ha-- I actually gave a presentation on Wednesday where I was asked this question directly and, you know, they said, "Well, how do we develop in a higher and best use and, and at a, at a higher revenue per acre, but do it without building multifamily?" And I said, "First off, you, you may not be able to," right? But I said, "You've got to stop thinking about it as the development type and start thinking about it as a more holistic, 'Okay, I'm gonna look at this fifteen-minute area.'" Right? Let's say, let's look at everything that would be fifteen-minute walkable in a community, and let's create a development plan that gives you a significant revenue per acre number holistically in that fifteen-minute area, because there's going to be a need for different housing types that may not make you money. And this is what we talk about, like, when people use our software. Like, you have to be really careful not to just money ball everything. There is a governmental purpose to build certain things at certain times that may not be profitable for you, right? But when we look at it a little bit more holistically, like in different spheres, so the fifteen-minute sphere or maybe the thousand-acre sphere or, you know, the half mile, the mile, whatever we wanna look at, when we look at that, we should, we should look at it from a big picture standpoint and say, "Okay, we want this area to meet a certain revenue per acre," instead of, "I have to have a four hundred and seventy thousand dollar house." Right? Like, every house we build in this city has to be four hundred and seventy thousand. Um, maybe we should look at that a little different, and we should say, "Every acre within this mile should meet a minimum per acre value that we're going to achieve." Right? Um, and stop trying to, like, super regulate exactly what's going to occur and kind of intermix some of the city planning side with some of the free market conversation, right? And try to get to your goals, right? Say that, "Hey, the bus stop that I wanna get to is I want a fifteen-minute walkable city," which, you know, look, we live in Texas. It's, it's hard to do in suburban areas, right? I have a fifteen-minute drivable city that I'm in, right?

Mm-hmm.

I can get to my grocery store, my kids' school, my job, everything like that within fifteen minutes of where I am.You know, but what I'm saying is, is we should establish the goal we want, and then everybody's gonna take a different path when they drive the bus to the bus stop, right? If that's the bus stop we wanna stop at, you're gonna... everybody's gonna have to drive a different path there. And what, what I have seen in city government that is really just kind of... It, it irks me because it's just such a simpleton approach to it, is we're just not gonna allow anything to be built unless it's five hundred thousand dollars in residential households. Which means we're, we're not gonna allow any workforce development, low-level workforce development-

Mm-hmm

... 'cause they have nowhere to live, right? Um-

Exactly.

You know, we don't, we don't look at a balanced approach to community. And, and the cities that are, uh, that have thrived are extremely balanced in, in the way that, that, that they've gone about that and that they have thrived. So I just, you know, those are the couple of comments that I would make on the 15-minute city is, it's not necessarily about whether I'm... You know, 'cause I think the conspiracy theorists look at this, Chad, and they're like, "Well, if you're gonna build a 15-minute city, it means everything has to be dense. I can't have any homes."

Yeah. It means I can't... It means that, yeah, you're taking away my car and things like that.

Yeah. I mean, this, I, I, I-

It's, really, it's, it's more about options than it is about... I mean, there are people, there are advocates for things like 15-minute cities who hate cars and would like to ban them entirely. Like, that's just not-

Yeah

... gonna happen. You should drop that, right? But having more options, having the ability... Like, in suburban Texas, there are no places where you can walk anywhere, right?

Right. Yeah.

So, uh, a- a- and what we see is, is a fiscal model that's not sustainable. So, so, you know, you have... You get a question, how can we, how can we, um, do these things without apartments or multifamily? Well, let's just... L- if that's our constraint, um, you have two options. You can build big lots with really expensive houses.

Mm-hmm.

Or you can build smaller lots with more houses, more single-family houses, right?

Mm-hmm.

And so our... the problem that we have here in Texas especially, uh, but really in America, is out- outside of major c- cities and urban centers, is that our view is that our options are single-family houses on quarter acre or bigger lots, or 400-unit apartment complexes.

Mm-hmm.

Like, there is a vast swath of differences in term- in terms of density and development style in between those two things.

I, I wanna bring up an example and, and I, I hate to bring up California as an example, but hey, we see you, California. I just took a long visit there. Um, like, went to Coronado, stayed in Coronado. Anybody who's been to Coronado, California, uh, it's kind of an island across from San Diego, but it is a very 15-minute walkable, bikeable area that has a mix of all different types of residential uses and a huge mix of commercial, local commercial uses. Restaurants, uh, shops, uh, breakfast spots, all, all, all the above, right? Clothing stores. Um, and you, you basically could buy everything you need to buy within a 15-minute walk, um, to, to kinda live and thrive and work and all that type of stuff. So, uh, it's expensive, so it's kind of a bad example for, from that standpoint because everything is pricey, but that's just California in general. Like, you can't live anywhere in California for cheap. Um, but you know, I, I don't think we do a really good job of framing the conversation in Texas. I mean, you said it. It's like we're either gonna build a D.R. Horton track home community or we're gonna build a 400-unit apartment complex. Like, in, in the minds of our, uh, residents or the conspiracy theorist, we are not educating them on how we could actually do more from a development standpoint, right? Um, uh, go back to North Richland Hills, talked about Paulette Hartman earlier. What they've done in Hometown in North Richland Hills is a great mix, right? Got, uh, city facilities in the middle, library, elementary school, high school's walkable, uh, and then housing, a, a housing mix that is impeccable, from, uh, you know, all the way from a mixed-use multifamily with commercial on the first floor to, uh, single-family homes on a little bit larger lot to patio home style lot, uh, to over 65 assisted living facilities on the edge as well. So there's just a, a multitude of mix and generational mix and those type of things that have been done in that development and master planned out, and if you looked at that over the 15-minute walkable, you would basically get everything you need in, in that development, uh, to, to fit. And so I just don't think we do a good job of explaining the mix of development styles because it's complicated, right? It's not super simple, but it's complicated and we just really need to kinda take a little bit more of a 30,000, uh, foot look and say, "Okay, hey, um, we're gonna do this development, and yes, we're gonna take this multifamily through. Let me show you the rest of the development plan though. Like, don't look at this just by this one project. Look at everything in the development plan and what's gonna develop." So, uh-

Yeah

... and sometimes that means you have to build the most politically palatable part first, right?

But guess what that also means, is that you can build smaller things.

Yeah.

Right?

Yeah.

Like, if you don't have any multifamily in your city, which we didn't-

Right

... uh, in Hudson Oaks, going from nothing to a huge multifamily development is a big step.

Yeah.

And we've become accustomed to, you know, nothing is gonna change in my neighborhood. So if you can shift up a little bit, I don't think it's gonna... Like, it may still be scary for the people who live there, and you may still get pushback, but I think that you would see less concern as you go, right? Like that first, say, duplex or quadplex or like small six-unit apartment complex-

Mm-hmm

... it's sort of woven into the fabric of the neighborhood instead of this massive development. The more I think that you do some of that small scale stuff-Not only are you going to be increasing the, increasing the value per acre and the density, um, and reducing infrastructure per person, all those kinds of fiscally sustainable things, but you're also gonna slowly start to erode that fear that, you know, we're gonna totally change the, the character of our neighborhoods, right? That's what you hear all the time.

Mm-hmm.

We can't do this 'cause our neighborhood character is important. Just small steps can help sort of change the narrative a little bit and build trust over time. The course is actually not that, not as devastating as it may seem-

The opposite is-

... today

Yeah, absolutely. The opposite is true as well. Like, you, you go and, you, you go and you build a development that's too large, right? You get away from the incremental development style, and you tell the community, "Oh, we're not gonna have an increase in crime. This isn't gonna impact crime," or, "This isn't gonna impact city services or whatnot." And so then you go build a facility that's got 800 units in it, right? And you, you lack the ability to kinda control how it develops as much. And then you do have an uptick, right? It's very difficult to make adjustments when you just threw all 800 residential units on the ground, right? So if you could start smaller or plan out better, that- that's the other side. I mean, we talk about that, uh, multifamily residential we built in, in Hudson Oaks, which, you know, by the way just sold to a REIT for a gob of money, uh, because it's a great project, and it filled to 97% occupancy within, like, four months. But we worked on that with the public's input for, like, three or four years. You know, we didn't just turn around and have a developer walk in the room and say, "Hey, we wanna build this multifamily concept here," and then just shove it through the process. We actually used the process to go get the developer. And we said, "Look, we need to put multifamily on the ground. We have some workforce issues. We have some employers that are major players in our community that need workforce, um, housing that is, you know, less expensive than the one acre, half-million-dollar homes that we, we were building at the time." You know, those are now one acre million dollar homes, by the way. But, um, and so we've gotta do some stuff for the workforce side. And so we went to the-

Which tells you a lot, right?

Yeah. Absolutely. And-

How, yeah, and within a 10-year span to see that kind of value increase.

Yeah, not only that, you have areas-

Like, to me, that's not a s- that's not always a sign of a healthy- ... fiscal environment.

Uh, abs- absolutely, yeah. Uh, what's amazing to me is you have areas that were developed in the '70s and '80s in this community that, uh, people are going in and buying for, you know, half million dollars and throwing $300,000 into the home to fully update it, right? And, and do some ma- massive remodeling. Because the lots are nice, and the trees are pretty, and, you know, you can't really buy that other places, and so I, I get it. Um, but my point is, is that a lot... W- when we're going through processes in cities, it's always a s- like, like we've become as, as, as residents have become less trustful of us, we've become less trustful of the resident. And so we try to go through a process with as little wake as possible, like the boat's coming in, we wanna be slow, we want no wake. And my comment is, is that we should be out ahead of that by years, talking about what should develop in these areas and why, and what the fiscal impacts are, so that everybody's on board with where things are going to go. And so I think that's extremely important to do, and I think it's what we did on that development, and that's why it's there, and that's why it went there without us getting fired, right, on the oth- on the other side of it. So, 'cause when I first started in that city, I was told, "We will never build multifamily development, and if you do, you will not work here. If you try to bring it to us, we will fire you." That's what I was told. And then we went to, "Okay, hey, we have this employer that brings us a ton of revenue and has great employees, and some of them are young, and some of them make a lot of money. But this employer for the younger workforce really needs to be able to recruit workforce out here and them live within a 15-minute drive of where they live. We'd really like to see you guys do something for that." And we spent three years developing that process and got it done. And in fact, that employer actually invested in the project, right? They were like a 10% investor in the project 'cause they believed in it, and we got it off the ground, and that whole development community made a lot of money, and they built it to a specification that most multifamily developers would not agree to, right? I, I-

Yeah

... I can't remember the number we talked to, it's been a while, but I think we talked to, like, 11 different development groups about-

At least 10, yeah

... about, "Hey, this is what we wanna build, and it's gotta be this way." And they all said, "You're in the middle of nowhere, you know, in exurb area, and we're not gonna put a restaurant and a Pilates studio and a gym on the first floor of this stuff." And we said, "Okay, great. We don't want you. We'll wait for the next guy." And eventually, we found the developer who did it, and those guys who took that risk and did what they needed to do made a lot of money. Um-

Yeah. And the, the cool thing about that is that it's integrated into the development area.

Right.

Right? So, like, it's not just siloed off for the people who live there, it's the whole community can use it.

And we didn't overdo the commercial. I think where a lot of cities go wrong on that too, is they try to put commercial on every first floor of every building and make it work. And we actually went and looked at it from a fiscal analysis standpoint and said, "We're only gonna, uh, put in as much commercial that can be supported by the development itself," right? So if you got a restaurant down there, like, you should be able to fill your evenings with people who live in that area, right? Like, a nice bar and grill, which is basically what went in there, um, and they make a great old fashioned, by the way. Um, the, you know, that is really supported by the people who are there. The Pilates studio that's there is full of people who live in that area, right? So it's just kinda like, you know, that back to that 15-minute conversation, you have to develop in a manner that allows you to, uh, to not overdo it. And a lot of times when it comes to retail, the heroin of city government, that's what I call it, when it comes to retail, we keep shooting up the heroin as much as we possibly can-And to the point of no return where everything starts to decline, and I can give you city after city after city-

Yeah

... that thirty years ago did that, and now they've had declining revenues for ten straight years in sales tax.

Yeah. Well, if, if it's... First of all, if it's not balanced-

Yeah

... like too much of a good thing is a bad thing.

Absolutely.

If it's not a balanced development pattern, then when people move out, you get to that first life cycle of these big box stores, they're gonna leave and follow the people, right?

Yes.

So like you have to balance the growth. And secondly, just adding more retail, I know we call it economic development, it's not really developing your economy.

Nope.

Right? There's more to economic growth than just more retail sales. So you have to have a balanced approach. And what ends up happening with that, if you have a balanced approach and you're able to do things on a smaller scale incrementally to see what works and what doesn't work without like this moonshot-

Yep

... um, that could fail and fail catastrophically, then what you end up with is a 15-minute city.

Yes.

You know?

Correct.

You end up with places where people can access what they need, and it's close by. And, and it-

With stable economies-

So like these stable-

... and stable property values and stable-

Yeah

... crime rates and, I mean, all of those things-

So, so you get where you're going-

Yep

... without having to have sort of this confrontation because you got buy-in and 'cause you did it slowly and incrementally, and you saw what worked and what didn't work and things like that. So-

But the conspiracy theorists-

Yeah. But I, I-

... look at this like it's the Pace picante sauce commercial, right? Like New York City.

New York City.

Yeah, like everybody's-

Don't California my Texas.

Correct. The, a- and, and the reality is, is that Texas can do this in its own way, right? It can do it-

Yeah

... and, and like I said, it's, you know, 15-minute walkable may not be workable everywhere, right? Um, but we should be able to legitimately get to most things in stable communities within a 15-minute drive or a 10-minute drive.

Yeah.

Right?

But here's the truth. If you look at places like Downtown Taylor and Marfa, like those are 15-minute cities out in, like Marfa in particular, it's in the middle of nowhere.

Yeah.

And it has this like old downtown area. It's surrounded by a residential, and it has some mixed use, and like you can get where you need to go in short order, in many cases without driving. Like that's just how we used to build. So like I don't know that it needs this sort of marketing slogan, right, that's gonna be divisive. But anyway, it's interesting, uh, to talk about because I think it touches on a lot of different things. Um, Pat, I've gotta call it quits, uh, because my daughter is headed to a dance competition, and she's been sitting in the car waiting to leave for about 10 minutes.

Nice.

So I gotta go say bye to her. Uh-

But have a good trip next week. I'm gonna be out at the end of the week, so, um, you know, spring break. Hopefully a- anyone who's listening is going somewhere, hopefully, uh, you'll be safe. Safe travels, have fun, and, and we'll catch up with you when we get back. Awesome. See you guys later.