The story unfolding in downtown Amarillo last week might seem like a local squabble over hotel taxes, but it cuts to the heart of a much bigger question: when do public incentives stop being tools for revitalization and start becoming handouts to projects that no longer need them?
At the center of this debate is a property-tax rebate worth more than $800,000, tied to the Courtyard by Marriott in downtown Amarillo. The incentive, originally approved in 2008 as part of a 20-year deal, was designed to encourage investment in a downtown that, at the time, desperately needed a boost. Now, nearly two decades later, the property’s ownership is changing hands — and so is the question of whether that incentive should follow it.
On October 9, the Amarillo Downtown Tax Increment Reinvestment Zone (TIRZ) No. 1 Board voted 4–1 to transfer that rebate agreement to 724 S. Polk Street Operating, LLC, a company led by Kevin Nelson, who happens to be the husband of former Amarillo Mayor Ginger Nelson. The decision stirred up a wave of opposition, not just because of who was involved, but because many residents and business owners see it as a symbol of how economic incentives can outlive their intended purpose.
The Origins: When Incentives Made Sense
To understand why this vote struck such a nerve, it’s worth remembering what the TIRZ program was meant to do. When Amarillo first created TIRZ No. 1, downtown was struggling. Vacant buildings dotted Polk Street, businesses had fled to I-40, and private investors were hesitant to take risks in the city’s core.
Tax increment reinvestment zones were designed to fix that problem. The concept was simple: offer developers a break on property taxes for a set number of years, giving them an incentive to invest where others wouldn’t. In theory, once the area recovered, those incentives would no longer be necessary.
For a while, that strategy worked. Downtown Amarillo began to attract new life — hotels, restaurants, loft apartments, and a convention center hotel. The Courtyard by Marriott was part of that wave, backed by public money and optimism.
But nearly 17 years later, as one hotel owner pointed out, the landscape has changed dramatically.
“Downtown Doesn’t Need Help Anymore”
Al Patel, who owns the America’s Best Value Inn in Amarillo, was one of several hotel operators who stood up at the TIRZ meeting to question why profitable downtown properties are still receiving tax breaks.
“Everybody would like some help, and we don’t understand why they’re still incentivizing deals that absolutely need no help,” Patel said. “If a hotel’s running at 80% occupancy, do you think they need help? They don’t.”
Patel’s frustration touches on a fundamental issue: fairness. When a successful downtown property receives hundreds of thousands in public rebates, small hotel owners elsewhere in the city — often struggling to compete without such help — are left wondering who the system is really serving. Patel noted that city data shows the Courtyard has already received more than $1.2 million in rebates since 2011, more than half the total potential value of the original incentive.
His argument is a pragmatic one: incentives should go where they’re most needed. In Amarillo, that’s no longer downtown.
“Downtown doesn’t need help anymore,” Patel said. “The city should focus on where the real growth potential is — along I-40 and other parts of Amarillo.”
The Conflict of Interest Question
Adding to the controversy is the fact that Kevin Nelson is married to former Mayor Ginger Nelson, who served until 2023 and was a key supporter of downtown redevelopment. While there’s no evidence of wrongdoing, the optics are sensitive. Many residents view the deal as an example of how power and influence can blur the line between public policy and private gain.
During the meeting, Nelson was visibly frustrated as the discussion dragged on and some board members left due to other commitments.
“This is going to be financially catastrophic!” he shouted. “I need you guys to act.”
Nelson argued that the success of his financing depended on the TIRZ rebate being reassigned.
“The only thing it does if you delay it is it jeopardizes my finances, because my lender is counting on this money,” he told the board.
He also warned that rejecting the reassignment could expose the city to legal risk: “Most likely, that would be a basis for a lawsuit because you’re breaching contract,” he said, later clarifying that he didn’t “intend to sue anybody.”
To his credit, Nelson emphasized that he and his wife intend to invest about $2 million in renovations to keep the hotel compliant with Marriott’s brand standards — an important step to maintain downtown’s appeal. “We’re local owners who believe in downtown,” he said. “We’re committed to keeping the Courtyard up to brand and continuing to contribute to Amarillo’s growth.”
But for many, the larger issue wasn’t the Nelsons’ intentions — it was whether the city should still be giving out such deals at all.
County and School Officials Push Back
Even within the TIRZ board, not everyone was convinced. Tom Warren II, an Amarillo ISD board member, was the lone vote against the transfer. His concern was about accountability.
“There’s still a lack of clarity on performance standards,” Warren said. “I don’t believe we should approve this without a complete review.”
He raises a valid point. When public funds are tied to private projects, there should be clear performance metrics — like job creation, tax base growth, or measurable community benefits. Without those, these programs can drift from economic development into simple subsidy.
Potter County Commissioner John Coffee also voiced doubts, questioning whether the county’s participation in TIRZ No. 1 still made sense, especially as the county faces its own major expenses.
“I think county funds could be better spent, maybe on a jail,” Coffee said, referring to a proposed $200 million jail project.
Still, Coffee ultimately voted in favor of the transfer, saying the city was contractually obligated to continue payments no matter who owned the property. “At the end of the day, the city has a contract,” he said. “If we did not approve the request, the city would still have to pay those monies to the current owner.”
Even so, Coffee signaled he plans to push for a reassessment of the county’s role in the TIRZ. “Maybe TIRZ 1 has run its course,” he said. “If we continue the program, maybe we develop another area of town and not just keep pouring money into downtown.”
When Success Outpaces Policy
The situation in Amarillo reflects a common problem across many U.S. cities: tax incentive programs that work so well at sparking development that they eventually outlast their purpose.
TIRZ programs are not inherently bad. They can be powerful tools for revitalization when applied strategically. But they require constant evaluation — not only to prevent abuse, but to ensure that public dollars continue to serve public needs.
Downtown Amarillo today is no longer the struggling district it was in 2008. It’s a hub of hotels, restaurants, and public spaces. The very success of that revitalization effort should be reason enough to reconsider whether ongoing rebates are justified.
If a hotel is running at 80% occupancy and turning a profit, as Patel noted, it’s hard to argue it still needs a taxpayer-funded boost.
The City Council’s Turn
The TIRZ board’s approval isn’t the final word. The issue now moves to the Amarillo City Council, which will consider the transfer at its October 14 meeting. If approved, Kevin Nelson’s company would assume the remaining value of the rebate — estimated between $800,000 and $900,000 — through the program’s expiration in 2031.
The council’s decision will be closely watched, not just for its outcome, but for what it signals about Amarillo’s broader development philosophy. Will the city continue to offer incentives to projects that are already profitable? Or will it begin redirecting those tools to places where investment truly needs a push?
A Common-Sense Takeaway
Economic incentives should be like training wheels — helpful at the start, but meant to come off once stability and success are achieved. If they remain attached indefinitely, they stop fostering growth and start distorting it.
No one is arguing that downtown Amarillo shouldn’t thrive. It should — and it does. But public policy should evolve with conditions on the ground. If incentives once needed for revitalization are now subsidizing success, it’s time to rethink how those programs are used.
The question Amarillo faces now isn’t just about one hotel or one contract. It’s about whether local government can apply common sense, fairness, and fiscal responsibility to programs designed to serve the public good.
