Concerned about corruption, Hidalgo County wants control of Peñitas TIRZ

This article appeared in the March 25 issue of the Progress Times.

Concerned about corruption in Peñitas, the county wants to take over the local tax increment reinvestment zone.

A law firm that represents Hidalgo County wrote a letter to Mayor Rodrigo “Rigo” Lopez last month, suggesting the county take control of the Peñitas Tax Increment Reinvestment Zone board.

“The recent bribery conviction of City leader and Zone Board Director Andres Morales, at a minimum, creates the public perception of questionable conduct in his wake,” according to a letter signed by attorney Ivan F. Perez of Weslaco-based law firm Jones, Galligan, Key & Lozano, which represents Hidalgo County.

Morales isn’t the only person affiliated with the Peñitas TIRZ who pleaded guilty in a public corruption case.

Former Peñitas City Manager Omar Romero, who served on the TIRZ board, pleaded guilty to bribery and bankruptcy fraud charges in November. Romero resigned after he pleaded guilty.

“I do not wish my legal status to complicate or put any potential projects in jeopardy,” Romero wrote in his resignation letter. “I strongly believe in the mission of this Board and the potential that the city has to use the TIRZ as a tool to drive development and growth in the area.”

Former La Joya ISD Trustee Armin Garza, who served as the Peñitas TIRZ manager from 2017 to 2019, pleaded guilty to conspiracy to defraud the United States in January.

While the charges against Morales, Romero and Garza didn’t involve the TIRZ, the perception of impropriety concerned Hidalgo County.

“Given these current circumstances, the County believes that it may be in the TIRZ’s best interest to alter the manner in which its board is comprised to assure the public of continued integrity and accountability,” according to the letter, which Hidalgo County released under the Texas Public Information Act. “Amending the Agreement to give the County the right to appoint additional TIRZ board members is necessary and critical to restoring public confidence in the City’s governmental bodies. Granting the County majority appointment control will also serve to relieve any perception of impropriety over the Board itself.”

Lopez didn’t respond to a request for comment.

Peñitas created the TIRZ in 2004 to spur development on more than 700 acres of land between Business 83 and 2 Mile Line near Tom Gill Road.

“Since the creation of the Zone in 2004, development has been slow and has not occurred as originally anticipated, due to the economic downturn,” according to a brief history reviewed by the Hidalgo County Commissioners Court in 2018. “Developments that have occurred since the Zone was created include a Walmart Supercenter which opened in 2009 and an apartment complex which was completed in 2016.”

Peñitas, Hidalgo County and the La Joya Independent School District govern the TIRZ together.

The city appoints five board members, La Joya ISD appoints one board member and Hidalgo County appoints one board member.

Former Peñitas Mayor Marcos Ochoa, who represents Hidalgo County on the TIRZ board, said he shared the county’s concerns.

“I feel that Andy — given the situation — I think that he should really think very hard about the decision that he needs to make, just like Omar and Armin did,” Ochoa said.

Morales didn’t respond to a request for comment.

The Peñitas TIRZ, like all forms of government, needs to gain the confidence of citizens and investors, said Hidalgo County Judge Richard Cortez.

“And in order to do that, we need to have a reputation of being a good government, one that is friendly to business and that is going to help our communities prosper,” Cortez said. “And nobody likes to get cheated, so we always have to do our dealings honestly, openly and based on good economic sense.”