STRATEGIC PRIORITY: Economic Development
AGENDA DATE: August 14, 2024
COUNCIL DISTRICT(S): 8
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
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SUBJECT
Title
Authorize the consent to and permission for the creation of the University Hills Municipal Management District (the “District”) by special act of the 85th Texas Legislature, codified in the Act, and the inclusion of property in the District, which property is within the City’s corporate limits and is described more fully in the field notes attached to the Petition and the Mayor and City Secretary are hereby authorized to execute any documents necessary to effectuate this Resolution - Financing: No cost consideration to the City
Body
BACKGROUND
The University Hills Municipal Management District (“District”) was created in 2017 under the terms and provisions of Article XVI, Section 59, and Article III, Sections 52 and 52-a of the Constitution of Texas; Chapters 372 and 375, Texas Local Government Code; and Chapter 3947, Texas Special District Local Laws Code. Centurion American Development Group (CADG) initially secured the 2017 legislation.
CADG, through an affiliated entity VM Fund I, LLC, is in the process of selling property within the District to Hoque Global (Hoque) as necessary for Hoque’s planned development of University Hills, 270-acre master-planned development in southern Dallas.
City Council consent is necessary so that the temporary board of directors of the District can hold a confirmation and directors election on November 5, 2024. Pursuant to the terms and provisions of Section 3947.007 of the Act and Section 49.102 of the Texas Water Code, as amended, and the applicable provisions of the Texas Election Code, as amended, the temporary board of directors of the District is scheduled to meet and adopt an order on August 15, 2024, determining that it is appropriate to conduct a confirmation election for the District on November 5, 2024 in conjunction with an election of a permanent board of directors for the District.
The consent will also include the removal of approximately 8.266 acres of property from the District boundary located in the City of Lancaster.
On June 22, 2022, the City Council authorized a development agreement with a Hoque entity, I-20 Lancaster Development, LLC, for a City Subsidy in an amount not to exceed $34,210,966 comprised of (i) an amount not to exceed $2,800,00 in the form of an economic development grant payable from the City’s Public/Private Partnership Fund (PPP Grant) and (ii) an amount not to exceed $31,410,966 plus an additional grant in lieu of interest payable from future University TIF District funds in consideration of the University Hills Phase I catalyst project (the “Project”) on property general bounded by Interstate Highway 20 (Lyndon Baines Johnson Freeway), Lancaster Road, and the DART rail line in Tax Increment Finance Reinvestment Zone Number Twenty One (University TIF District), by Resolution No. 22-1008.
Hoque has not yet executed the development agreement that was authorized in June 2022 and did not meet the first material deadline of Resolution No. 22-1008 which required Hoque to purchase the approximately 279-acre Project site no later than December 31, 2023.
However, since January 2024, Hoque has been acting in good faith to make substantive progress with various City departments to address various outstanding issues including submitting updated urban design guidelines; coordinating with home builders regarding improved home designs; coordinating with Dallas Water Utilities (DWU) to finalize plans for a wastewater trunk line; submitting on April 18, 2024, and receiving conditional approval by the City Plan Commission on May 16, 2024, of three (3) preliminary plats (S234-108; S234-109; S234-110); and submitting a floodplain fill permit.
As a result, City staff and Hoque are currently negotiating an amendment to the development agreement previously authorized in June 2022. City staff will be requiring that Hoque purchase the approximately 279-acre Project site by December 31, 2024, as part of an amendment that is anticipated to come before City Council in late September 2024. Hoque has represented that this consent Resolution is necessary for Hoque to be able to close on the purchase of the approximately 279-acre Project site.
This agenda item authorizing conditional consent to and permission for the creation and operation of the District within the City of Dallas corporate limits will be subject to: (i) Hoque’s acquisition of the property including the Project site (approximately 279 acres) from VM Fund I, LLC no later than December 31, 2024; (ii) Hoque’s providing evidence of such land purchase to the Director; (iii) the execution of a Development Agreement to be negotiated by and between the City and Hoque (“Development Agreement”) conditioned upon future City Council authorization of an amendment to Resolution No. 22-1008, as contemplated by the Act; and (iv) the terms of the Development Agreement.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Economic Development Committee was briefed by memorandum regarding this matter on August 5, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13204848&GUID=EE2F12EA-16ED-40C7-B54C-375EDC67EA5A>
FISCAL INFORMATION
No cost consideration to the City.