City to formalize GEDC agreement on J.B. Wells settlement


At their Thursday, Sept. 9, regular meeting, the Gonzales City Council will consider an economic development funding agreement with the Gonzales Economic Development Corporation that will help the city pay off its settlement of the lawsuit filed by the Austin Presbyterian Theological Seminary over the J.B. Wells Park.

City Council will meet at 6 p.m. Thursday, Sept. 9, at the Gonzales Municipal Building, 820 St. Joseph, following a 5 p.m. workshop.

If approved by the council, the agreement will effect Sept. 15 as long as the city does not receive a petition signed by more than 10 percent of the city’s registered voters by Sept. 14.

The seminary sued the City of Gonzales in 2017 over the estate of J.B. Wells Jr., whose last will included a reversionary interest in favor of the seminary in the real property that now makes up the city’s J.B. Wells Park, Expo and Arena.

This past June, after four years of battling in court, the two sides reached a settlement agreement of $1.825 million, which avoids more legal fees and gives the city all of the seminary’s interest in the land. The city had already racked up more than $500,000 in costs defending itself in the lawsuit.

The Gonzales County Court approved the settlement agreement in July after the city authorized issuance of 20-year general obligation refunding bonds as allowed by the Texas Government Code to pay for the settlement.

Annually levied ad valorem taxes will be used to pay back the settlement amount generated by the sale of the bonds. By issuing general obligation bonds, the city is not required to post a legal notice nor solicit voter approval.

In an effort to lessen the impact the settlement will have on the city, officials reached out to GEDC to ask them to help pay for half the cost, or $912,500. The city was facing an Oct. 10 deadline to pay the settlement in full.

During a joint meeting with the council, GEDC agreed to provide the $912,500 to the city, but spread out over the course of the 20-year bond period, which represents about $61,700 per year.

By making the payments annually instead of in one lump sum, GEDC is able to absorb the cost through its sales tax collection instead of running down its reserves and thus can continue to use its reserve funds to recruit and retain business in Gonzales. GEDC collects a half-percent of sales tax revenue in the city for its funding.

While GEDC is helping the city pay back the settlement, it is not a party to the bond, nor will it receive any interest in the J.B. Wells Park complex.

The city’s performance agreement being considered Thursday is similar to one that would be done by any other applicant that seeks money from GEDC.

The J.B. Wells Park, Expo and Arena was appraised at $7.349 million by the Gonzales Central Appraisal District, and $11.3 million by Bolton Real Estate, according to case filings.

If more than 10 percent of the city’s registered votes sign a petition presented to the city by Sept. 14 against the settlement and terms of repayment, the agreement between the city and GEDC “shall not be executed and shall be deemed invalid and without legal effect.” The Sept. 14 date is 60 days after GEDC published a notice in the Gonzales Inquirer on July 15 of its intent to enter into the agreement with the city.

The city will also consider final adoption of the budget and tax rate during Thursday’s regular meeting.

Steve Fountain contributed to this report.