One of the City Council’s top priorities is the preservation and redevelopment of the iconic Imperial Char House. The Imperial Sugar site was the start of what would become Sugar Land and once played a vital role in our City’s economy. Imperial Sugar created jobs and then homes, and as it grew, this economic engine was the cornerstone of our community, our “company town,” for generations. Today, Sugar Land is still a “company town,” serving as a major employment hub in the Houston region with over 70,000 jobs. And although the Imperial Sugar site is no longer in operation, the resolve to preserve and honor the City’s history is as strong as ever. As such, preserving the Char House and redeveloping the Imperial Sugar site is one of the City Council’s top priorities.
 
On December 1, 2022, the City of Sugar Land and PUMA Development jointly announced a proposal to preserve and begin redevelopment of the Imperial Char House. PUMA, a Houston-based boutique development firm specializing in creating experience-driven, mixed-use communities, has requested support from the City of Sugar Land and Sugar Land Development Corporation (SLDC) toward the preservation of the Char House and eventual development of the remainder of the Imperial Historic District.
 
The proposal to redevelop the Char House is in its very early stages, with further due diligence to be completed before PUMA Development proceeds with closing on the property. To bring this project to fruition, the City expects several financial support requests from PUMA. First, the City has approved a $5 million reimbursement agreement for pre-development and construction costs associated with the preservation and redevelopment of the Imperial Char House. Second, to secure financing for the remainder of the Char House project, PUMA has requested the City enter into a 5-year office lease. The lease will allow the City to sublease and may also be terminated or amended by PUMA if other tenants become interested in the Char House building and all or a portion of the square footage is needed.

The lease includes the following terms:

• Premise: 3 floors, approximately 27,000 sqft
• Total estimated annual rent and expenses: $1,188,000
  • Base Rate: $30.00 square foot (sqft) for a total of $810,000/year
  • Operating Expenses: $14 per sqft for a total of $378,000/year
• Term: 60 months (5 years)
• No renewal options
• No security deposit is required
• Permitted uses: general office purposes; several exclusions are explicitly stated in the lease, such as schools, data processing, credit unions, restaurants, and other retail, to name a few, with an exception for a retail space for Visit Sugar Land-related merchandise.
• Tenant Improvements: Tenant improvement allowance of $80 per rentable square foot. Landlord will construct the tenant improvements. The City will reimburse costs exceeding the allowance to the Landlord. A construction management fee of 3% of the tenant improvement costs will be charged for managing the design and construction of the tenant improvements, which can be paid out of the tenant improvement allowance as available.
• Tenancy Commencement Date (tenant improvements complete and ready for Tenant’s installation of fixtures and fittings): no later than May 1, 2027.
• Mutual Termination/Amendment Rights: In the event that the Landlord and the City choose to terminate the lease in its entirety or amend the lease to reduce the area of the Premises prior to the Tenancy Commencement Date, City will pay Landlord 25% of the gross Lease Rent over the five-year term, estimated to be $1,500,000.00 as a form of reimbursement to Landlord for Building construction costs, including the Construction Allowance (“Termination Fee”). This Termination Fee will be prorated to the square footage amount terminated.

To financially support the redevelopment and adaptive reuse of the Imperial Char House, staff recommends the City Council approve a 5-year office lease agreement between PUMA Development, Inc. and the City of Sugar Land for approximately 27,000 square feet of the Char House.