San Angelo council approves two North Tiers incentive awards; deadlock on nonprofit eligibility leaves policy unresolved

On Jan. 7, 2025, the San Angelo City Council approved two North Tiers incentive awards totaling $150,000 but deadlocked 3-3 on a motion to remove nonprofit eligibility from the North Tiers program, leaving the proposed policy change unresolved.

Council approved a $75,000 incentive for a duplex development at 215 West 19th Street (RM-1 zoning) and a $75,000 incentive for facade and pedestrian improvements at 2401 North Chadbourne. Both projects were recommended by the Tiers board and supported by staff. The council then debated a separate policy proposal from the Tiers board to create an annual nonprofit set-aside for North Tiers projects; council did not adopt the proposal or the competing motion to ban nonprofit eligibility outright.

The Tiers-board-backed proposal would have created an annual nonprofit set-aside of $100,000, allowed nonprofit applicants up to $75,000 each (or multiple nonprofits to share the $100,000), required that nonprofit projects include public improvements (sidewalks, ADA ramps, streetscaping, etc.), and specified the funds be paid by standard reimbursement after project completion. Staff said the set-aside would not roll over year to year and would not be available to government entities. The Tiers board recommended the set-aside by a 6-0 vote; staff recommended adopting it for 2025. Several council members and the mayor asked for a legal review and additional clarifying information before committing policy changes.

Mayor Brenda Gunter and Planning & Development Services Director Aaron Benoit presented the projects and the policy proposal. Benoit described the two approved projects as infill and facade improvements intended to stimulate development in high-priority Tiers areas and said the two awards would reduce the North Tiers fund from about $2.81 million to about $2.7 million. Benoit said the 215 West 19th project proposes a duplex, has a significant cash match from the applicant, and will add sidewalks and landscaping; the 2401 North Chadbourne project will remove an entry portico, refresh the facade, relocate parking off Chadbourne to improve safety, and add ADA-accessible sidewalks.

The nonprofit-policy debate focused on statutory intent and the purpose of tax increment financing. Mayor Gunter cited guidance and conversations with the Texas Comptroller’s office and emphasized that Chapter 311 (tax increment financing) is intended to “jump start development to generate additional tax revenue,” noting that nonprofits typically do not generate new property tax revenue. Several council members agreed that the program’s primary purpose is to generate additional tax increment and that public infrastructure projects are the standard use of Tiers funds. Opponents of excluding nonprofits argued that many small nonprofits provide critical community services, buy supplies and pay staff who in turn contribute to the local economy, and that limited nonprofit funding could amplify those organizations’ work.

Councilmember Tom moved to remove all nonprofit eligibility from the North Tiers policy; a second was recorded. Public comment included a statement in favor of nonprofit access from Michael “Mike” Burnett, executive director of Concho Valley Community Action Agency, who urged support for smaller nonprofits that deliver direct services. The motion to remove nonprofits produced a 3-3 tie, which failed for lack of a majority. Council members who opposed the motion said they needed more information, including a legal opinion from the acting city attorney and additional input from state officials.

After the tie, the council directed staff to return with more information and legal analysis and allowed councilmembers to meet with staff to refine what additional guidance they want. No change to the North Tiers nonprofit policy was adopted at the meeting.

Votes at a glance

- Item A1 — 215 West 19th Street (incentive request): Approved; award $75,000; Tiers board recommendation: 6-0; council vote: 6-0. - Item A2 — 2401 North Chadbourne (incentive request): Approved; award $75,000; Tiers board recommendation: 6-0; council vote: 6-0. - North Tiers nonprofit policy update (proposal to create $100,000 annual nonprofit set-aside): Discussion; council did not adopt a policy change at this meeting; Tiers board had recommended the set-aside 6-0; council deadlocked 3-3 on a separate motion to remove nonprofit eligibility and directed staff to return with legal analysis and more information.

Why it matters: Tiers funds (a tax-increment reinvestment mechanism) are designed to support public improvements that spur private investment. The council’s decisions on how Tiers money may be used shape which projects and organizations can receive public support and affect redevelopment priorities in the city’s North Tiers area.

What’s next: Staff will compile legal analysis (including consultation with the acting city attorney and follow-up with state officials) and further data for council consideration; councilmembers asked to meet with staff to clarify what information they want returned.