An approval to accept an economic development agreement between the City of Stafford and the developers of a 192-acre $500 million project designed to attract millennials who want to work and play where they live, could change the future of Stafford.
On March 20 (between deadline and publication of this edition of the paper) the board of directors of the Stafford Economic Development Corporation (SEDC) were to have held a special meeting at City Hall. They were considering a resolution approving the proposed redevelopment of the old Texas Instrument campus as a project of the SEDC.
The property is bounded on the south by the Texas Instruments Ditch, on the west by Kirkwood Road and US 59, on the north by West Airport Boulevard and on the east by FM 1092/Murphy Road.
Stafford Mayor Leonard Scarcella has made no secret of his opposition to the financial proposal because, he says, the financial agreement could lead to the city losing it’s zero property tax attraction because the city won’t be able to afford subsidizing the developer the first five years and still maintain city services.
Stafford is the largest city in Texas that offers zero property tax incentives to homeowners and businesses, making it the key attraction to living in or bringing a business to Stafford.
According to Scarcella, the developers, in addition to wanting the zero property tax incentive, want money up front from Stafford to help pay for infrastructure such as roads and street lighting
“We’ve never given anybody a penny before. And we are talking about $13 million, several million up front, and a rebate of sales tax that could go up to as much as 80 percent. They want $8.4 million with interest. I have a problem with that and a lot of taxpayers and business owners and citizens have problems with that,” Scarcella said.
“What we are doing is funding them in ways others won’t be funded. They say if we don’t give them what they want, they will put down some improvements but it won’t be nearly as much,” he added.
The mayor is referring to articles in the contract which state, in part, that the city and the SEDC will pay nothing if less than $250,000 is generated from Stafford’s 1.5 percent sales and use tax revenue and the SEDC’s share of one-half of one percent of sales tax from the project.
At the same time, with obligations going up incrementally, Stafford and the SEDC could pay the developer up to 80 percent of the city’s 1.5 percent and the SEDC’s one half of one percent share of sales tax if sales tax revenues exceed $2 million.
The city and SEDC obligation is restricted to its sales and use tax collected on the project.
It could be a financial boon for Stafford over the long haul.
Over the next 12 years, the developers plan to bring a mixed-use commercial, retail and residential development to be known as the TI Redevelopment Property (the project)
“The project will contain, at a minimum, the development of residential properties at the project, the operation of a destination hotel on the property, locating a fitness facility on the property, the construction and development of a public common area known as ‘The Green,’ the construction and operation of a parking garage along with commercial buildings and locating retail and restaurants on the property,” according to the resolution the SEDC wants to approve.
The mayor has questions about the planned hotel known as a destination hotel.
“We’ve got 23 hotels in Stafford right now. Even if they don’t have a hotel yet, they want us to give them $500,000 in cash out of our hotel/motel tax to advertise and market,” he said.
He noted that when the NCAA basketball tournament came to Houston, Butler University filled up all of their hotels.
The SEDC says the land, buildings, equipment, facilities, expenditures, targeted infrastructure and improvements provided by the developer “will promote new and expanded business development.”
The developers expect to create up to 2,400 high-end residential units on that property with the possibility of an urban wrap that will have 600 units in the town center section, and 1,800 units of conventional apartments, in four different gated sections, east of the town center between the office/warehouses on the Murphy Road/FM1092 corridor.
The first section of units in a gated community are expected to be completed by the end of the year, said Stafford’s building director and zoning administrator, Chris Riggs.
The initial proposed called for an outlet mall but that has been shelved and it’ s just being described as “retail.”
“Quite a bit of people are in support of this,” said the mayor, “but here is what’s terrible about it. In the first five years the city will pay these amounts. I’m focused on the first five years.
“We will be giving them $3.5 million for Network Street, $2 million for West Airport and another half million of our hotel tax funds. We will be collecting $3.5 million and paying out of pocket $6 million. They say when you get into these latter years you get all this money. My concern is we gotta make it through the six years,” Scarcella said.
If the developers just build the apartments, the jump in population also means a need for more police coverage.
“We’d have two thirds as many apartments in this 60 acres area as we have in the entire seven-square miles of Stafford,” Scarcella said.
“If we subsidize them, in two or three years we will have to have a property tax. We’ll lose the manufacturing companies and businesses who came. What will be the reason to stay in Stafford? It’s one thing to not have property tax in the first place. It’s another thing to have it taken away,” Scarcella said.
The city has no deficit and paid off all its debt three years ago, he said.
There are plans for drainage projects a new fire station and a police annex for a total just under $10 million. The city has a budget of $35 million.
“When you take all your cash reserves and give it to somebody and you get nothing for it ’til down the line, that’s like going to Vegas,” said the mayor. “It’s a crap shoot.”