CRE Backs Largest School Bond In Texas History Despite Bipartisan Opposition. Here's Why

Heading into the Nov. 5 election, there aren't many issues Houston Democrats and Republicans agree on. Opposition to Houston Independent School District’s $4.4B bond measure is one of them.

With distrust of the state-run school district bridging the partisan divide, it might seem the initiative is a lost cause. But with billions at stake, the city's aging schools have found keen allies in the commercial real estate community as business organizations and a long list of builders, architects and contractors throw support and money at the issue.

Some of that support is coming from the Houston Region Business Coalition, which requires at least 67% of its roughly 30 trustees to vote in support of a measure before the group endorses it, said Alan Hassenflu, HRBC chairman and CEO of Fidelis Realty Partners. Their vote far exceeded that percentage, he said.

“We are in total and complete support for voting yes for the bond election to help our schools in HISD,” Hassenflu said.

“If it's turned down, it will be a vote against our city being as excellent as it can be,” he added. 

The Houston ISD bond is the largest school district bond proposal in Texas history, fitting for the state's largest school district in Texas, with its 274 schools and more than 183,000 students. And it includes plenty of projects: The bond funds would upgrade campus security, expand campuses to reduce overcrowding, improve air and water quality, and invest in early childhood and career and technical education, according to an HISD fact sheet.

“The average HISD school is 50 years old,” Hassenflu said. “From a commercial real estate perspective, the IRS generally allows you to fully depreciate all of your real estate buildings in 40 years. So we’re living on borrowed time.” 

Political action committee “Houstonians for Safe and Healthy Schools” has joined the cause, sending out invitations for a ritzy bond fundraiser last week hosted by a number of firms and individuals previously receiving major municipal and commercial construction contracts, Chron reported.

Hosts inviting donors to chip in $250 to $100K included David Weekley Homes, HKS architecture firm, PGA Engineers and Dally + Associates structural engineers. None of those responded to Bisnow’s request for comment, though David Weekley personally donated $125K to the PAC a month prior to the fundraiser, according to a campaign finance report.

Greater Houston Partnership President and CEO Steve Kean also donated $100K to the pro-bond PAC in August, according to the report, and the organization as a whole has announced its support.

GHP cited a need to safeguard the health and safety of students, teachers and staff and build modern learning environments. The organization also argues the bond proposal comes at a critical time since HISD has not passed a bond since 2012, even as severe weather events stress the school system’s already fragile infrastructure.

“HISD students face unacceptable conditions, including lead-laced water, faulty heating and air conditioning systems, and facilities with rats and mold,” Greater Houston Partnership said in its news release, though it declined to comment for this story.

Another plus is the bond would create contracts for the construction of secure vestibules, perimeter fencing, infrastructure upgrades and the demolition and reconstruction of some buildings, Hassenflu said.

“All of that $4.4B will be spent here in Houston on contractors that are Houston-based,” Hassenflu said. “It's very much stimulative to the economy. No question about that.”

But others claim support for the measure is financially motivated and argue they are disinclined to put money into a school system they don't trust. Opponents include state lawmakers, the Texas American Federation of Teachers union and 53% of Houstonians, according to late summer polling.

“The people I see in support of it, honestly, are people with something to gain,” said Tracy Lisewsky, a parent who moderates a Facebook group called Supporters of HISD Magnets and Budget Accountability. 

Texas school districts have asked voters to approve 23 billion-dollar or more bond propositions over more than two decades, and all of them passed.

This time could be different. Lisewsky said cynicism about the bond stems from the state takeover of the district last summer. The Texas Education Agency tapped Mike Miles, with previous experience at Dallas ISD and charter schools, as superintendent. It also appointed nine board members, mostly local professionals with children in the district.

While nearly everyone agrees school facilities need upgrades, opponents say the new administration has not earned their trust. They feel bond passage would allow taxation without representation since none of the school board is elected, Lisewsky said. 

“There is the bucket of people who this is a referendum on Miles and his leadership, and all the things that have happened,” she said. “And then there is … a bucket of ‘This bond is just poorly planned.’”

The HRBC is confident that Miles and the HISD administration can be trusted with $4.4B of taxpayer-funded money due to all of the reviews put in place, Hassenflu said, noting the 13-member Bond Oversight Committee that will oversee the progress of the bond expenses and construction. 

Still, groups like the Texas Gulf Coast Area Labor Federation, AFL-CIO, have highlighted unflattering reports about Miles, who has been accused of diverting millions of Texas public school tax dollars to charter schools he started in Colorado, though the Texas Education Agency investigated and said no laws were broken.

“It’s just not prudent to leave taxpayers on the hook for a $4.4 billion bond that will be spent by a man with a long history of mismanaging public funds,” Hany Khalil, executive director of the Texas Gulf Coast AFL-CIO, said in a statement. 

Texas school districts are required to get voters’ permission to sell bonds and pay off the debt since property taxes are their main source of funding.

The district says the bond measures would not raise taxes. But theoretically, a school district's tax rate would go down if it pays off its current debt and does not take on any new debt, KE Andrews Director Tony Trahan said.

“Governor Abbott mandated that any bond taking on new debt has to have the disclaimer during voting of “THIS IS A PROPERTY TAX INCREASE”, because it is,” Trahan said by email. “It’s a debt, that ultimately if voted for, property owners will have to pay for.”

And despite the bond's likelihood to create construction jobs, labor unions don’t trust HISD to oversee them safely and effectively, Gulf Coast AFL-CIO Political and Communications Director Jay Malone said, noting that Houston is already the most dangerous city in America for construction workers. 

“There are no workforce standards to protect workers that are going to be working on these projects,” Malone said. 

Mistreatment alleged by union members who work for HISD, low confidence in the administration to oversee the bond and a lack of standards to protect workers on the bond projects led the federation to strongly oppose the propositions, he said.

The district has dire needs, but this is the wrong bond at the wrong time, Lisewsky said. Her group is asking the district to come back with a better scope, she said. 

“If the bond fails, then hopefully there's some self-reflection that happens, and they can come back with something that the community can buy into,” Lisewsky said.

But Hassenflu believes the current school board is trying to make up for the inaction by the previous board, he said, adding that they’re trying to make HISD great again.

A vote against the bond measures “will be a vote against having a thriving, excellent, growing central school district for the city of Houston,” Hassenflu said.