Cotulla puts new kick behind Whitetail Ridge project

60 homes for service-industry families, young professionals…

Council must address $5.2M funding gap

A plan to build scores of homes for low- to middle-income families in Cotulla has been given new impetus with a city council resolution to pursue a tax credit plan administered by the federal government.

Identified as Whitetail Ridge by the council in a formal move earlier this year, vacant acreage on a hill between the Las Palmas business park and the Ramirez/Burks Elementary School may see completion of its first homes in a three-step building plan as early as the summer of 2027.

Addressing the city council at its June meeting, housing consultant Pegy Brimhall admitted that an earlier and ambitious plan to pursue what she had described as a nine-percent tax credit plan had foundered due to stiff competition in the market and Cotulla being outranked by four housing projects in Hidalgo County. That plan, she had told councilors at meetings in 2025 and this year, would have paid at least 70 percent of the construction cost of the new homes at Whitetail Ridge.

A contingency plan, she said in June, involves Cotulla committing to pursuing a lesser tax credit option that pays between 30 and 35 percent of the construction cost and may require the city to produce approximately $5.2 million to “fill the gap” between federal funding and final price.

With federal funding paying approximately a third of the estimated $19.3 million for the Whitetail Ridge housing development ($7.3 million at tax credit current market value) and Cotulla producing $5.2 million, the remaining amount of $6.8 million will be covered by permanent loan financing secured by the project developer, using the property itself as collateral.

The loan will only be approved, Brimhall said in a brief interview this week, if rent prices at Whitetail Ridge are set at a level that allows payment towards the debt as well as the social services and other amenities that are slated for the property.

Councilors agreed unanimously at their June meeting to support the resolution committing to the lesser tax credit plan but acknowledged that finding the extra funds will be a challenge.

In its first phase, the tax credit-supported housing project would provide an affordable housing community and enable the city to charge a lower rent for the units, Brimhall said, targeting those families employed in the service industry, such as restaurant and retail workers, dual-income families, young teachers and other entry-level professionals.

The higher-level tax credit plan for which the city has now indicated it may no longer qualify would have required Cotulla to provide housing for what Brimhall described as “very low-income households,” including the elderly, the disabled, single parents and minimum-wage employees.

“That was something we were considering,” the housing consultant said on June 11. “We went for that one, thinking the market-rate phase would even it out.”

That second phase, separate from the tax credit plan, involves construction of several single-family homes on adjacent acreage. Those homes, Brimhall said, will be sold at market value to higher-income professionals.

When it is complete, the first 60-unit development at Whitetail Ridge will be available to renters contingent upon employment and will be managed according to strict state-mandated guidelines aimed at preventing the complex falling victim to neglect during its first 15 years.

“This program provides a high-quality place to live, and access to vital resources for job opportunities and childcare,” the housing consultant told councilors. “It is administered by the state, and it ensures a future community where people can thrive and be happy.”

Whitetail Ridge was chosen for its proximity to retail and restaurant businesses at Las Palmas, to grocery shopping on North Main Street, and being within walking distance of the elementary school, to which it will be connected by a pedestrian parkway.

Councilors have repeatedly concurred that the effort by the city to facilitate access to affordable housing meets an urgent demand among local residents and those who travel to work in Cotulla.

“The Texas Department of Criminal Justice has a lot of employees at its Cotulla Unit who are commuting from Laredo,” Councilor Alejandro Garcia said. “They want housing.”

“Everyone knows there is all this commuting,” Brimhall said. “The school district has major issues with retaining teachers. There are no homes to offer. Teachers are gone in two years.”

Brimhall noted that she believes an affordable housing development at Whitetail Ridge will in turn benefit Cotulla’s economy, as families establish themselves locally, work, shop and eat at local businesses.

With an anticipated price tag of $19.3 million, the Whitetail Ridge project will attract a builder who will expect to remain on site for the second phase of the project, constructing and selling as many as “fifty to sixty” single-family homes next door to the affordable housing complex, Brimhall said.

“We expect to do it all in three years,” the consultant added.

Councilors balked at the prospect of injecting $5.2 million into the project and learned that the funding requirement may prove a stumbling block that can halt the development in its tracks.

“How are we going to fill that gap?” Councilor Billy Alvarado asked.

“We can defer it, reduce the amount to pay up front… The city can be a little more creative,” Brimhall said. “We may use funds from the Economic Development Council; and the Middle Rio Grande Development Council has suggested there is a $750,000 grant available.”

The La Salle County government, represented in the council chamber audience by Judge Leodoro Martinez III at the June meeting and at earlier meetings, has indicated it may support the development with a fund injection of its own, on the provision that the city government commit to its portion.

“La Salle County has agreed to partner,” Brimhall told councilors, “and if we go out for all available grants, and if we ask for philanthropic support, through all of that, we can fill the five million-dollar gap.”

“If the money’s not there, what happens?” City Administrator David Wright asked.

“The project is put on hold,” Brimhall said. “We would have to say that we can’t accept it this year and hope for next year. This resolution is saying that the city is in support of us pursuing the program.”

City Attorney Steve Pena noted that a portion of the funding from the city may take the form of in-kind services, including utilities.

“In February of next year, we would have to have that gap money ready,” Brimhall said. “The federal government doesn’t need to know how you break it down. It only wants to know that you are committed to providing the $5 million.”

“We are going to do things that we have never done in Cotulla before,” Mayor Sandra Luna said of the housing project, “and this is possibly the one chance that we get this going. I recommend that we move forward with it. Let’s see how far we can get.”

Councilors will continue their talks with other government entities and regional organizations as well as corporate and private sponsors this summer to secure the funding they will be required to show in early 2027.

“February is the closing date, shovels in the ground,” Brimhall said. “Construction is twelve months for three buildings, and I believe we can move people in when the first one is finished after six to eight months. That’s about a year from now.”