Barbers Hill ISD appears set to collect three times the market rate for a new building it will lease out to Lee College, all of which will be paid by local taxpayers.
Over the past several weeks, Barbers Hill ISD’s activities better resembled a profit-driven operation instead of an institution of learning. With more than 1,000 government school districts across Texas, this could be happening in anyone’s backyard.
Texas Scorecard obtained a copy of an agreement between Barbers Hill ISD and Lee College to create a branch campus near the district. According to the agreement, which lasts until August 2049, Lee College will pay Barbers Hill ISD to lease a new 60,000 square foot building to house this campus, which the school district will design and build.
This lease money will be paid out of a new property tax to fund the branch campus, which Barbers Hill ISD would collect. This was in the school district’s and Lee College’s proposal to the Texas Higher Education Coordinating Board, which approved the new branch campus unanimously in January 2024.
Out of the more than $19 million taxpayers are projected to pay in 2027 and 2028, Barbers Hill ISD will collect more than $11 million in lease payments. At 60,000 square feet, that would mean Lee College would pay more than $111 per square foot in 2027, and $85 per square foot in 2028.
For comparison, the average rent in 2024 for Class A and A+ office space in Houston was $34.50 per square foot. A 3,400 retail space in nearby Baytown is advertising rent at $24 per square foot.
A review of public records and comment from Lee College led to this projection.
Section 7 of the Barbers Hill-Lee College agreement states that starting in 2024, the school district “shall transfer to Lee College” whichever is smaller: the actual tax money collected or the amount shown in the Budgeted Operations Payment Schedule for that tax year.
Amanda Smote, Lee College’s Public Relations Manager, confirmed to Texas Scorecard that this means the lease payment to the district is the amount remaining after the bills are paid.
Of the total tax funds collected, the college uses a contractual portion for operations and maintenance of the facility, and the remaining balance is then paid to Barbers Hill ISD as rent (annual lease) for the facility. BHISD is responsible for setting the tax rate and collecting the taxes. The taxes collected are remitted to the college for operations and then the balance is paid back to BHISD (rent revenue instead of maintenance taxes).
Smote provided a copy of the college’s “contractual portion” schedule of payments for operations and maintenance, which starts with $2.6 million in 2027, and $5.2 million the following year. An internal projection of this new property tax estimated collections of $9.4 million and $10.3 million in 2027 and 2028 respectively, for the planned 60,000 square foot campus.
This arrangement aligns with one of Barbers Hill ISD’s goals: “diversify and enhance revenue by creating new revenue streams and/or finding more efficient ways to manage such resources that new revenue streams are created.”
Lee College and Barbers Hill expressed intent to create the new branch campus in an October 2022 letter to then-commissioner of the Texas Higher Education Coordinating Board, Harrison Keller.
Barbers Hill ISD pursued this project after the expiration of Texas’ widely criticized Chapter 313 program in 2021. It allowed school districts to offer property tax abatements to unreliable energy generation or manufacturing projects, and in exchange, businesses would offer “supplemental payments” to the districts. James Quintero of Texas Public Policy Foundation called Barbers Hill ISD “one of the most prolific 313 abusers in the state.”
Barbers Hill ISD is under a microscope regarding its financial dealings. The Texas Education Agency is investigating the district after revelations surfaced about the small percentage the Barbers Hill Education Foundation (BHEF)—over which the school board “exercises significant control” —has given to the school district out of the millions in donations and transfers from the district itself.
It was widely reported that Barbers Hill ISD sent BHEF more than $41 million from 2019 to 2021.
Neither Barbers Hill ISD nor the TEA responded to a request for comment. Smote wrote that Lee College is “hopeful” the new facility will be opened in Fall 2027.
If you are a concerned citizen who has information regarding local corruption, please email scorecardtips@protonmail.com.
