Developer, city officials at odds over sewer deal

CANTON — For more than 15 years, Joe Zoubi has made a practice of bringing new business to rural Texas towns.

In the towns of Wilmer, Crandall and most recently Canton, Zoubi’s travel plazas and restaurants offer jobs and boost economies with tax dollars, he said.

While the Dallas-based entrepreneur prides himself in building relationships with cities, he has clashed heads with leaders in Canton over a sewer issue.

The dispute centers on a three-mile, $550,000 sewer line to Duke’s Travel Plaza at Interstate 20 and Texas Highway 64. Zoubi said it was agreed to be complete this fall. However, the Canton City Council voted at its June meeting to hold the project, potentially for three years.

“When I promised the city to hire people from here, I didn’t hire anyone from outside this area. So far, I have about 95 employees,” Zoubi said. “I’m making an impact; I’m making change in their lives. I have people who have not had jobs in 10 and 15 years.”

Along with hiring locally and agreeing to be annexed into the city, the crux of the agreement was that the city would construct a sewer line about three miles from town to Duke’s Travel Plaza, which is on a septic system.

“It’d cost a lot of money, but they knew it would make a lot of money for them. Also, it would bring more businesses to this corner,” Zoubi said. “Both of us were talking about the same thing and had the same ideas: In the future, we would have more businesses and it would benefit the city of Canton very much.”

The benefit comes from bringing in more investors to the north side of town, Zoubi said.

“Everyone’s waiting for the sewer,” Zoubi said. “This will pay for more water towers, not just for the sewer. It’s going to pay off everything (the city is) doing. Even a kid could understand that.”

Canton Mayor Cary Hilliard said he and three new council members, who were elected in May, were not involved in the agreement with Zoubi.

The 2.9-mile sewer line would affect 26 property owners, and 23 agreed to give a 30-foot utility easement to the city. More than eight property owners agreed to be annexed to receive sewer from the city and will pay property tax to the city once it is annexed, according to an economic report.

The sewer project to the travel plaza is to be paid by Canton Economic Development within five years from sales and property tax. The report estimates $80,000 in local sales tax and $17,000 in annual city property tax from Duke’s Travel Plaza.

No one is allowed sewer connection without being annexed.

“We wanted to just take our own look and make sure that we’re comfortable with everything that was done,” Hilliard said. “I think that’s just the nature of it. This happened pretty quickly.”

Zoubi said Canton Economic Development Corporation approached him in January about working together.

“They called and said, ‘We’re interested in working with you; what can we do?’” Zoubi said. “Then we started talking about the sewer.”

On April 19, the City Council approved the agreement and sewer project, and Zoubi and Canton Economic Development Corporation signed a contract.
The 11,000-square-foot property was zoned B-2, and 9.25 acres along the interstate were annexed May 17.

The council decided at its June meeting to delay a sewer project to Zoubi’s recently annexed property in favor of focusing on building a second water tower in the city. While the written agreement gave the city three years to install sewer, Zoubi said the former mayor and council assured him it would be complete this fall.

Economic Development Director Mercy Rushing said Zoubi’s travel center “adds a lot to the gateway to Canton.”

The council “didn’t just do away with it, they delayed it, and that gives me a glimmer of hope,” Mrs. Rushing said.

Just as Zoubi’s attorney entered the mix by sending a letter to the city requesting the property to be de-annexed, as well as payment for damages, Canton’s attorney, Richard Davis, resigned from his position.

Hilliard said the reason for the resignation “is just his workload.” Davis has other legal responsibilities, such as being the presiding judge in a high-profile case in Upshur County, Hilliard said. His resignation is not connected to the sewer issue, Hilliard said.

“It just caught us at a bad time,” Hilliard said. “We’ll have to get another city attorney to get up to speed … it’s going to take a little bit of time.”

At a special meeting June 30, the city appointed Richard Ray to serve as interim attorney.

Zoubi is planning his next move: a lawsuit.

“If they don’t work it out this month, a lawsuit will be filed,” Zoubi said.

Zoubi said he installed a septic system large enough to last until November and will have to expand it if the city delays the project past this fall. He also added $20,000 worth of showers to his building plan once he was guaranteed sewer.
Without sewer, he cannot operate the showers, he said.

However, he said “if the deal doesn’t go through,” he plans to continue hiring and expanding his business and septic systems.

City Manager Andy McCuiston said Zoubi’s development was the “perfect” project, but at this point, he said the council “has put it on hold indefinitely.”

McCuiston said the discussion is “on the legal side.”

“Would it be good for the city? I think the project would be good economically because it would generate tax base,” he said.

While the mayor said the issue might not make it to the July council agenda, McCuiston remains hopeful the council will come to a decision soon.

“This is a fairly new council, and they have not been involved in these projects in the past,” McCuiston said. “My opinion has not changed — I think it’s good for the city to develop that corridor.”

More than 20 landowners expressed interest in providing easement along the planned sewer line and developing their property, McCuiston said.

“The project started before we had the election; at that time, staff supported it because it would support the community,” McCuiston said. “This council seems to feel that those folks (who) come in to develop properties should fund a portion of that cost. That’s a different philosophy than the previous council.”

He said impact or pro-rata fees could be implemented, but “it would be a disincentive” for investors and developers to come to Canton.

Mrs. Rushing said the council’s decision not to implement impact fees “was a big win” for growth.

Hilliard said his views have “been very consistent” since the beginning, and his top priority is addressing water-pressure issues due to the increase of visitors during First Monday Trade Days.

“My driving concern has always been for the overall welfare of the citizens of Canton, what’s best for Canton and what meets the needs for the citizens of Canton,” Hilliard said.

He said delaying the sewer will not stop the inevitability that the city will grow.

“I think we’ll get growth along Interstate 20,” Hilliard said. “Our town is going to grow in several directions over time. … We’re in a good spot and we have a lot to offer.”

As for the sewer project and a change of plans, Hilliard said, “It’s just way premature to speculate about things.”

Published July 17
Tyler Morning Telegraph

Published by

Melissa Crowe

I’m Melissa, an adventure-seeking, budget-crunching, internet-loving journalist. Along with covering local government at Victoria Advocate, I write a weekly music column for Get Out and freelance for University of Houston-Victoria in my spare time. In this year’s Texas Associated Press Managing Editors awards, I won first place for star breaking news report of the year, first star online package of the year, first community service and first deadline writing. I also won third place for team effort, honorable mention for freedom of information, and honorable mention for star investigative report of the year. I also took first place for best breaking news story in the Local Media Association Editorial Contest, a national contest. Last year, I won second in the TAPME contest for star online package, third for star breaking news report and honorable mentions for star investigative report and team effort. The Local Media Association awarded me with an honorable mention for best breaking news story. I grew up in rural northern Texas and graduated from the University of North Texas. After working for a family-owned paper in the eastern corner of the state, I took an opportunity to move south. When I’m not filing FOIA requests, I enjoy spicy Bloody Marys, kayaking the Guadalupe River and exploring South Texas. Would you like to hire me to write or edit something? Or ask me a question? Or send me a link to a funny GIF? Email me!

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