Laredo advisory committee reviews Chapter 380 incentives and considers higher wage floor for projects

The Laredo Economic Development Advisory Committee discussed proposed updates to the city's Chapter 380 incentive guidelines Wednesday, including a staff recommendation to raise the minimum wage requirement for projects that receive tax-increment reimbursements.

Staff opened the discussion by reminding the committee that the guidelines on the city website were last revised in 2021 and that council and management had asked staff to re-examine three areas: targeted industries, the minimum wage/job-creation thresholds tied to incentives, and the reimbursement-percentage matrix used to calculate payouts.

“This was last revisited in 2021,” the staff member said, explaining the scope of the review. On the wage floor she said, “the city's minimum wage right now ... they're already making $13 an hour,” and recommended the committee consider raising the required wage for jobs created under 380 agreements to roughly $15 to $15.50 per hour to encourage higher-paying positions.

Staff also described the existing compliance process: developers typically have one year to complete construction and a second year to generate the tax increment; they must submit a detailed compliance checklist and payroll evidence to qualify for reimbursement. The staff presenter emphasized that failure to meet annual compliance can forfeit reimbursement for that year and that repeated noncompliance could trigger termination under the agreement.

Committee members pressed staff on who should appear on the agreement when a developer builds property and a tenant operates the business that creates jobs. A committee member noted that “the developer is the one that's going to be paying the property taxes,” and staff explained that most current agreements are with property owners because the reimbursement is tied to property tax increment, though transfers and assignment language are negotiable and can require council approval.

Hime Ortiz, the city's economic development manager, gave a status update on active agreements, saying the office currently tracks a mix of projects: three active 380 agreements are monitored by the economic development office, another group is managed by finance because those agreements are tied to sales tax, and several projects are under construction and not yet eligible for reimbursement. Ortiz told members staff would email a roster with dates, promised investment and job counts, and compliance status ahead of the next meeting.

Committee members also discussed whether 380s can or should be used to support job retention and small-business incentives. Staff said retention incentives would likely require a separate funding source (for example, general fund allocations) because 380 reimbursements rely on new incremental tax revenue, whereas staff is rolling out a small-business technical-assistance program funded by a recent SBRC grant to support downtown businesses.

The committee left the item open for further review, requested that staff circulate the full list of active agreements and finance-managed files, and asked the tax department to attend the next meeting to explain 312 mechanisms and sales-tax-based agreements. An opportunity-zone presentation was deferred for a later meeting.

Votes at a glance: The committee approved the November 12 minutes earlier in the meeting. Members also approved tentative meeting dates for July 8 and August 26 and asked staff to block those dates while final calendars are prepared.

The committee did not adopt ordinance or policy language at the meeting; members asked staff to prepare detailed materials and return with recommendations for formal changes at a later date.