Government

Gentrification: The Border Health Institute

Reminder: the words in blue are links to articles with detailed information.

In January 1998 Texas and 45 other state attorney generals settled a lawsuit against the tobacco industry. The tobacco companies were sued over the health-care costs associated with tobacco use. The tobacco companies agreed to make settlement payments to reimburse states over the health costs associated to tobacco use. [1] Texas’ portion of the tobacco settlement was $17.6 billion. [2] The Texas legislature carved out $50 million from the settlement for Texas Tech Health Sciences Center to use “for border health initiatives, including the establishment and operation of the Institute of Border Health.” [1] This was the birth of the Border Health Institute (BHI), which brought a medical school to El Paso and established the Medical Center of the Americas (MCA), today’s version of the BHI.

Before the settlement with the tobacco companies had been accepted, El Paso leaders started bickering with Texas Tech University and the University of Texas over the use of the BHI money. Publicly opposed to UTEP and to some extent Texas Tech’s use of the tobacco money was then Texas senator Eliot Shapleigh. Shapleigh was the face of the controversy over who would have control over the BHI money. [3] As El Paso Politics discussed last week, Eliot Shapleigh acknowledged recently that he is working with elected officials, like Veronica Escobar, and unelected officials. Also Shapleigh was singled out by the book Bombshell in the Barrio as allegedly driving the El Paso Independent School District (EPISD) cheating scandal to allow for the use of eminent domain against Bowie High School.

Eminent domain, or the taking of private property for economic development, became central to the BHI and remains part of the ongoing controversies over economic development in the city.

The controversy over the BHI was about who would control it. The tobacco money had been allocated specifically for it, but who would have control over it: the University of Texas at El Paso (UTEP), Texas Tech or El Paso’s leaders intensified between 1999 and 2001. UTEP did not want to give up its research centers to the BHI. Shapleigh and other BHI supporters wanted the campus around Thomason Hospital, now the University Medical Center of El Paso (UMC), to be the BHI. Diana Natalicio, then-president of UTEP told the El Paso Times in 2000 that “it was absolutely not essential that UTEP move all of its research” to the BHI footprint. [7] The Lewin Group published a feasibility study on the BHI proposal in April 2000. The study concluded that a unified campus was not required to meet the deliverables of the BHI. The $200,000 feasibility study was requested by the BHI’s only board meeting in 1999 and paid for by the Paso del Norte Health Foundation. [9]

However, regardless of the study, then county attorney Jose Rodriguez told the El Paso Times in 2000 that it was very “disheartening that after all the work and all the community finally coming together to develop a vision,” to have individuals like Diana Natalicio “jeopardizing” the project. [7] Control over how the BHI money was to be used in El Paso was the issue. Shapleigh and other supporters wanted a brick-and-mortar BHI as the cornerstone of a medical campus sprawling out from UMC. UTEP and other El Paso leaders saw the BHI as a virtual hub where medical teaching institutions like Texas Tech and UTEP would use the BHI as a virtual core bringing synergy between them and other public and private entities for growing a medical economy in El Paso.

Shapleigh and others needed the BHI money to start building a physical campus instead of a virtual entity. UTEP wanted to continue to build up their teaching facilities with the money. Texas Tech wanted to use the money to bring a two-year medical school to fruition. According to a 1998 article in the El Paso Times, Shapleigh had “offended” Texas Tech and Lubbock officials by referring to them as “colonizers” who were taking “advantage of El Paso.” [3] Since the money had been written into law and was destined for El Paso, the only thing left to decide was who was going to control it.

The BHI

The Border Health Institute (BHI) was codified into law on June 18, 1999, by the Texas legislature. (HB 2025) On April 14, 1999, the Texas Higher Education committee voted eight to zero to add the BHI to Chapter 151. The Act called for “creating the Border Health Institute in El Paso to deliver healthcare, provide healthcare education, and conduct research on public health in the Texas-Mexico border region.” The BHI was proposed to focus on health issues relevant to the border. The BHI was first envisioned in a 1998 “Economic Summit” that resulted in a December 16, 1998, agreement between UTEP and Texas Tech calling for a “comprehensive health campus.” [7] The definition of “comprehensive health campus” was the public argument over the BHI money. At the time Woody Hunt was a University of Texas regent who opposed Shapleigh’s vision of a unified medical campus for the BHI. [7]

Although the BHI controversy was being framed as one of what it was, a virtual synergy organization or a medical campus, at the center of it was money. Shapleigh was “outraged” that UTEP had asked the Texas legislature for $30 million to build a biomedical research center. Shapleigh argued that UTEP was using funds to build facilities that were not part of the campus around UMC envisioned by the BHI. [8] The larger money issue was that the BHI money had been split between Texas Tech and UTEP with each entity pursuing their own agendas. UTEP saw the BHI as a virtual entity connecting both Texas Tech and UTEP’s medical research and teaching facilities rather than a “brick-and-mortar institute.” Whereas the BHI’s first chairman, Gordon McGee did not want a “virtual campus.” [9]

While UTEP was asking for money for its biomedical research center, Texas Tech was asking for $24 million to begin “bringing its two-year medical school to El Paso” [9] Combining the resources of Texas Tech and UTEP would make an El Paso medical school a reality, Shapleigh and other supporters argued at the time. However, UTEP opposed integrating their science courses with Texas Tech. [7]

Shapleigh and other BHI supporters envisioned the BHI “as a border health mecca” in El Paso. [5] The BHI was to become “a research focus[ed] in Hispanic health issues, environmental issues, children’s issues and infectious diseases,” according to Eliot Shapleigh as quoted by the El Paso Times in 1999. [6] “The institute will spearhead research on border issues and provide education and care on diseases relevant to the region, wrote the El Paso Times in 1999. [6] Eliot Shapleigh accused Diana Natalicio and Woody Hunt of “parting ways” with the vision of the BHI. [10] Although the public face over control of the BHI money was Shapleigh, there was more at play.

Ray Caballero

On December 30, 2001, the El Paso Times named Ray Caballero the 2001 newsmaker of the year. [5] In 1999, Caballero was elected as mayor. Both Susie Byrd and Veronica Escobar worked in Caballero’s office when he was in office. One of his first tasks, as mayor, was to implement a controversial 11.8 property tax increase. According to a 1999 newspaper article, Eliot Shapleigh and Jose Rodriguez worked “behind the scenes” with Caballero on “a vision” for El Paso. It was Caballero who championed the BHI “as a potential economic development engine for El Paso,” according to the El Paso Times. [5]

Caballero would go on to play a more public role in the BHI after he became the mayor.

During an October 31, 2001, board meeting of the BHI, the BHI board approved naming the City of El Paso as the “master land developer of the BHI.” Caballero told the BHI board members that having a master plan was important to “help freeze the cost of real estate” around UMC, which was where the BHI campus was envisioned. The city had just begun the process of creating a Tax Increment District (TIF) and was hoping to have it in place by the end of 2001. [14]

According to Caballero, the city would be the “master developer” and the taxpayer was the “investor”.

The TIF district would go on to expose how developers wanted to use eminent domain to take homes to build public facilities like the Chihuahuas stadium or the proposed downtown sports arena. Instead of downtown, the BHI wanted the land around UMC. Caballero, a one-term mayor, would go on to lose his reelection to Joe Wardy because of the TIF district for the BHI. Although it failed, the BHI TIF became the blueprint for what was needed to take homes for economic development.

Eliot Shapleigh & Ray Caballero

Eliot Shapleigh was arguing for a unified campus with the BHI money while UTEP was using its portion of the BHI money to build on its research facilities. Driving the “unified campus” vision of the BHI was Shapleigh. But it was Caballero who was power behind the battles for control of the BHI, suggested Dee Margo in 1999. [11]

In addition to being the face of the BHI, Shapleigh was also the face of the 1990s courts of inquiry looking into the state government shortchanging the city and the bank controversy generated by the Community Scholars. Although Caballero was involved in all three controversies, he mainly was “toiling in the background.” [11]

Caballero’s perceived power over Shapleigh led then Texas representative Norma Chavez to refer to Caballero as “Senator Caballero,” suggesting that it was Caballero who told Shapleigh what to do. [11]

Although UTEP and Texas Tech had been allocated the BHI money, Caballero and Shapleigh had not given up on a medical campus. Caballero, as mayor, embarked on building the brick-and-mortar BHI around UMC by making the City of El Paso a landowner. It was hoped that by building a BHI building, UTEP would come around and move their medical teaching facilities to the BHI footprint.

Caballero needed to borrow municipal money and the power to force land values down in the targeted community.

Eminent Domain

The taking of private property by the government is known as eminent domain. To deliver the vision of the BHI, Ray Caballero and supporters created a Tax Increment Districts (TIF) in the BHI footprint. The TIF allows the government to use tax money to improve the area in the TIF as taxes rise because of the improvements. As property values increase in the TIF, the taxing entities continue to take in the same amount of tax monies they were receiving from the properties before the TIF was implemented. The extra money from increased property valuations would go towards paying off municipal debt used to improve the area in the TIF and to make other improvements in the area.

However, one of the most controversial powers of the TIF districts in 2001 was the power to use eminent domain to take private property and use it for economic development. TIF districts have been described by opponents as “welfare for big developers.” [12]

The BHI TIF district was the catalyst for Caballero’s loss in his second attempt to be mayor of El Paso. The controversy led to a recall of Larry Medina and eventually killed the BHI, as the BHI. It was later reinvented as another entity – the MCA.

The MCA Wants A Second El Paso Downtown

After the BHI imploded, proponents of a medical campus anchored by UMC continued to look for ways to build their vision. By 2007, the BHI had morphed into the MCA. The 2003 version of the Border Health Institute Ten Year Strategic Plan: Enhancing Healthcare in the Border Region laid out the concept for the BHI becoming the Unified Medical Campus. The new BHI plan focused on the need to promote the BHI project to the community because the TIF district controversies had eroded public trust in the BHI. The BHI’s “strategic thinkers,” as the BHI promoters referred to themselves, now understood that the BHI was doomed to fail without public support. They developed a new identity for the BHI and began asking the community to buy into the vision.

The BHI officially ceased being a legal entity on February 10, 2006 when the State of Texas revoked its business status.

The stigma of the BHI’s part in the eminent domain fiasco forced the rebranding of the unified medical campus. In an editorial on July 15, 2007, published by the El Paso Times, then-county commissioner and congresswoman Veronica Escobar wrote about the “health powerhouse” being created in El Paso. Escobar wrote, “it began years ago when philanthropists, business leaders and elected officials established the Medical Campus of the Americas (MCA) Foundation.” Readers should note her use of the term “campus” instead of “center” as it is officially known today. Escobar’s use of the term suggests that the rebranding away from the BHI towards the MCA had begun. It should be noted that Escobar’s co-writer in the editorial was then city representative Alexandro Lozano. The MCA is now the vehicle for the BHI vision.

The MCA was officially created in 2006. One of its leading donors is the Hunt Family Foundation.

Although the MCA is multiple entities managing real estate, incubating and growing tech companies focused on healthcare, among other initiatives, its primary focus remains on building a centralized medical campus around UMC. To do so, they are buying land in the area. The foundation’s 2017 annual report expressed its goal of having El Paso leaders “develop a medical campus…in a blighted neighborhood.” [13]

The use of the term “blighted neighborhood” is key to the power of eminent domain to take private property for economic development.

In 2018, the MCA introduced the third master plan for developing a medical campus around UMC and Texas Tech University in central El Paso. The MCA has spent $618,440 in four master plans since 2008. [4]

The MCA’s latest plan envisions master planning 440 acres over the next 50 years. At the core is Texas Tech and UMC. The plan is to use the existing medical facilities to spur private economic development like restaurants and other services in the area. To accomplish the goal, the MCA hopes to master develop the streets and other infrastructure. [4]

But the neighborhood residents are concerned that their homes will be targeted to make way for the MCA plan. The plan calls for spending $81 million to improve streets, adding walkable and bicycle trails and improving other areas of the proposed footprint. It calls for city, county other taxes to fund the vision. [4]

In addition to the proposed use of taxes, the MCA plan worries taxpayers. Fred Borrego, the president of the San Juan Neighborhood Association, which is “big part” of the MCA footprint, told the El Paso Times in 2018 that he is worried that that plan “will use condemnation to acquire homes.” [4] Borrego told the El Paso Times that if the MCA uses eminent domain to take homes for the project, “they will have a fight on their hands.” [4]

The central neighborhoods are not new to fighting against gentrifying their community. Because of Caballero’s BHI TIF districts, they not only successfully defended their homes but also killed the BHI as the brand of gentrifying their homes.

In an upcoming article we will detail how the viejitos around UMC successfully defended their homes from gentrification.

Footnotes:

  1. The State of Texas v. The American Tobacco Company et al., 5-96CV-91.
  2. Mark Curriden, “20 years later, debate continues over the Texas tobacco verdict,” The Houston Chronicle, April 22, 2018.
  3. Gary Scharrer, “Texas Tech, city leaders OK single health school,” El Paso Times, December 18, 1998.
  4. Vic Kolenc, “Medical Center of the Americas’ plan seeks Downtown-like development in Central El Paso,” El Paso Times, October 4, 2018.
  5. Tammy Fonce-Olivas, “Caballero shakes up city politics,” El Paso Times, December 30, 2001.
  6. Melissa Martinez, “Institute to draw attention to border,” El Paso Times, June 20, 1999.
  7. Gary Scharrer, “Turf war over BHI intensifies,” El Paso Times, October 8, 2000.
  8. Gary Scharrer, “Shapleigh says turf war hurts health institute,” El Paso Times, September 10, 2000.
  9. David Crowder, “Separate agendas called troubling,” El Paso Times, September 10, 2000.
  10. David Crowder, “BHI board meeting could focus on site selection,” El Paso Times, October 18, 2000.
  11. Gary Scharrer, “Shapleigh, Caballero criticized for closeness,” El Paso Times, December 26, 1999.
  12. Gary Sullivan, Steve Johnson and Dennis Soden, UTEP professors, “Tax Increment Financing (TIF) Best Practices Study,” Greater El Paso Chamber of Commerce, September 1, 2002.
  13. MCAmericas Holdings, Inc., 2017 Annual Report.
  14. Border Health Institute Board Meeting Minutes, October 31, 2001.

2 replies »

  1. Then there is El Paso Children’s Hospital 🙂

    I am not for gentrification when it forces poor people to sell low so developers can buy low and sell high. I believe that was what the DTEP horde had in mind for Segundo Barrio. But ask yourself if El Paso is better or worse off for the MAC. The answer has to be obvious.

    Like

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