STRATEGIC PRIORITY: Economic Development
AGENDA DATE: December 11, 2024
COUNCIL DISTRICT(S): 8, 12
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize amendments to Resolution No. 22-1008 previously approved on June 22, 2022 authorizing a development agreement (“Agreement”) and all other necessary documents, upon approval as to form by the City Attorney, with I-20 Lancaster Development, LLC and/or its affiliates ("Developer"), related to the University Hills Phase I catalyst project (“Project”) on property generally bounded by Interstate Highway 20 (Lyndon B. Johnson Freeway), Lancaster Road, and the DART rail line (“Project site”) to: (1) increase the City Subsidy by $1,750,000.00 from an amount not to exceed $34,210,966.00 to an amount not to exceed $35,960,966.00 by increasing the economic development grant payable from the City’s Public/Private Partnership Fund (“PPP Grant”) by $1,750,000.00 from an amount not to exceed $2,800,000.00 to an amount not to exceed $4,550,000.00 and include the specific requirement for Developer to design, construct, and achieve City acceptance of the specific wastewater infrastructure improvement originally planned to be delivered by Dallas Water Utilities (Project Area 75-4-C in the 2020 Unserved Areas Program); (2) extend various material dates and deadlines; (3) transfer an amount not to exceed $1,750,000.00 from the ARPA Redevelopment Fund to the Public/Private Partnership Fund; (4) make other corresponding modifications, and, in consideration; (5) increase the Developer's minimum investment requirement by $2,000,000.00, from $60,000,000.00 to $62,000,000.00; (6) amend the Minimum Vertical Requirements to require the Developer to prepare and sell an additional 50 residential sites to third-party builders for the construction of single-family homes; and (7) amend the Minimum Vertical Requirements to require the Developer to construct a community amenity center with a pool - Not to exceed $1,750,000.00 - Financing: Public/Private Partnership Fund ($1,750,000.00)
Body
BACKGROUND
On June 22, 2022, the City Council authorized a development agreement with a Hoque Global entity, I-20 Lancaster Development, LLC, for a City Subsidy in an amount not to exceed $34,210,966.00 comprised of (i) an amount not to exceed $2,800,000.00 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 $31,410,966.00 plus an additional grant in lieu of interest payable from future University TIF District funds (“TIF Subsidy”) in consideration of the University Hills Phase I catalyst project (the “Project”) on property generally bounded by Interstate Highway 20 (Lyndon B. 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 Global has not yet executed the development agreement initially authorized by Resolution No. 22-1008 in June 2022 and did not meet the first material deadline of Resolution No. 22-1008, which required Hoque Global to purchase the approximately 279-acre Project site no later than December 31, 2023.
However, since January 2024, Hoque Global has been acting in good faith to make substantive progress with various City departments to address various outstanding issues, including: (i) submitting updated urban design guidelines; (ii) coordinating with home builders regarding improved home designs, coordinating with Dallas Water Utilities Department (DWU) to finalize plans for a specific wastewater infrastructure improvement that will be constructed by Hoque Global (originally planned to be delivered by DWU as Project Area 75-4-C in the 2020 Unserved Areas Program) (iii) submitting on April 18, 2024 and receiving conditional approval by the City Plan Commission on May 16, 2024 of three preliminary plats (S234-108; S234-109; S234-110); (iv) coordinating with the City Arborist regarding tree mitigation requirements; and (v) submitting a floodplain fill permit.
On August 14, 2024, the City Council authorized conditional consent to and permission for the creation and operation of the University Hills Municipal Management District (“MMD”) by Resolution No. 24-1090. Hoque Global has represented that this consent Resolution was necessary for Hoque Global to close on the purchase of the approximately 279-acre Project site.
Since Spring 2024, City staff and Hoque Global have been negotiating amendments to Resolution No. 22-1008. The staff recommended amendments to Resolution No. 22-1008 are shown in the accompanying Resolution. Also attached to the accompanying Resolution are recommended new exhibits to be added (Exhibit E: Wastewater Infrastructure Improvement; Exhibit F: Stormwater Infrastructure Improvement; and Exhibit G: University Hills Design Book).
Of note are the following amended deadlines that Developer has agreed to achieve in the coming months:
1. Deadline to Execute Development Agreement: Developer shall execute the Agreement by: (i) 30 calendar days after City Council approval of the amendments or (ii) 30 calendar days after City delivery of City-signed Agreement to Developer incorporating the amendments, whichever is later.
2. Deadline to Purchase Property: Developer shall purchase the entire Project Site (approximately 279-acre property) from VM Fund I, LLC within 90 calendar days of Developer’s execution of the Agreement.
3. Deadline to Secure Construction Funding: Developer shall secure and provide evidence of construction financing by: (i) June 30, 2025, or (ii) 180 calendar days after Developer’s execution of the Agreement, whichever is later.
If Developer fails to comply with any one of the three amended deadlines described above, the City will rescind all authorizations and funding commitments provided by Resolution No. 22-1008, as amended, and terminate the Agreement (if Agreement has been executed). There is no cure period for any of the three amended deadlines described above.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction July 2025
Complete Construction July 2028
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On December 13, 2017, the City Council held a public hearing and authorized the establishment of Tax Increment Reinvestment Zone Number Twenty One, the University TIF District, by Resolution No. 17-1941; Ordinance No. 30733, as amended.
On December 9, 2020,the City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the University TIF District by Resolution No. 20-1894; Ordinance No. 31713.
On June 14, 2022, the University TIF District Board of Directors reviewed the Project and recommended City Council authorization of a development agreement with I-20 Lancaster Development, LLC and/or its affiliates for a City Subsidy in an amount not to exceed $34,210,966.00.
On June 22, 2022, the City Council authorized a development agreement with I-20 Lancaster Development, LLC and/or its affiliates for a City Subsidy in an amount not to exceed $34,210,966.00 by Resolution No. 22-1008.
Note: The University TIF District Board of Directors does not currently have the minimum five appointed members to convene a meeting; therefore, staff’s recommended amendments to Resolution No. 22-1008 are now being forwarded to City Council without a Board recommendation.
The Economic Development Committee was briefed regarding this matter on December 2, 2024.
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
Public/Private Partnership Fund |
$0.00 |
$1,750,000.00 |
$0.00 |
OWNER/DEVELOPER
I-20 Lancaster Development, LLC
Arthur Santa-Maria, Manager
MAP
Attached