District Background
The Imperial Redevelopment District was created under Article XVI, Section 59 of the Texas Constitution by House Bill 3554, as passed by the 79th Texas Legislature on June 18, 2005, and operates in accordance with Chapter 8150 of the Special District Local Laws Code, and Chapters 49 and 54 of the Texas Water Code, as amended. The District also has the purposes of Article III, Sections 52 and 52a, and Article VIII, Section I-g of the Texas Constitution.
The proposed bond issue is not the City’s bond issue, and the City will never assume the debt as the district will exist into perpetuity. The district’s bond issue falls under City guidance via Resolution No. 11-07, which governs special districts within the City and its extraterritorial jurisdiction. This resolution provides for City review and approval of all in-city special district bond issues in an effort to protect residents in the districts and ensure the total tax burden on residents is not inappropriate.
The District contains approximately 746 acres of land, and is located in eastern Fort Bend County approximately 30 miles southwest of downtown Houston, Texas. Access to the District is provided via the State Highway 6 and US Highway 90A. Generally, the District is bordered on the south by US Highway 90A, on the west by State Highway 6 and on the north by Voss Road. Oyster Creek winds through the District. The District lies entirely within the corporate boundaries of the City of Sugar Land, Texas (the “City”).
The District is being developed as Imperial, a mixed use community, which includes single-family and multi-family residential, retail office and commercial development. The District includes Imperial Market, which is planned as a mixed use lifestyle center located at the former Imperial Sugar Company refinery site and utilizing historic structures, and an Atlantic League Basketball stadium known as Constellation Field, which is the home of the Sugar Land Skeeters.
Development of Imperial began in 2010. The District currently includes approximately 129 developed acres of single-family residential development (464 lots). As of January 1, 2018 the District contained 212 single-family homes completed and occupied, 6 single-family homes completed and not occupied, 60 single-family homes in various stages of construction and 186 vacant developed lots. An additional 109 lots are under construction on approximately 24 acres of land in the District and are expected to be available for home construction in spring 2018.
Redevelopment Agreement
On May 3, 2016 the third amendment to the Redevelopment Agreement was approved by City Council. This amendment defined the flow of funds for reimbursement from proceeds of bonds issued based on taxable value in the district for both Unlimited Tax Bonds and Contract Revenue Bonds (from TIRZ #3) issued by the district.
To date, the district has been compliant with the terms of the third amendment and the allocation of funds has been consistent with the flow defined in the amendment.
Bond History
On November 8, 2011, the voters of the District authorized the issuance of a total of $185,600,000 principal amount of unlimited tax bonds authorized by the District’s voters for the purpose of acquiring or constructing water, sanitary sewer and drainage facilities and refunding of water, sanitary sewer and drainage facilities bonds. The Bonds are the second issuance from such authorization and will be repaid from Imperial Redevelopment District property tax revenues.
The District has previously issued one series of unlimited tax bonds in the principal amount of $2,500,000, all of which is outstanding as of March 15, 2018 and one series of unlimited tax road bonds in the principal amount of $12,135,000, all of which is outstanding as of March 15, 2018. The District also has previously issued one series of contract revenue bonds in the principal amount of $4,980,000, all of which is outstanding as of March 15, 2018.
As a note, the previous district road and contract revenue bond issues provided funding for the second phase of the University Blvd North / S. Stadium Drive extension, including the bridge over Oyster Creek. With approximately 80% of the funding for this entire project – which accomplishes the long-planned “Burney Road Bypass – coming through previous and future payments from the district and Fort Bend County, the City will ultimately be responsible for only approximately $4 million of the total cost.
Proposed Issue
Proceeds from the sale of the Bonds will be used to pay for constructions cost of $4,854,274 and non-construction costs of $1,200,726 for a total of $6,055,000.
Proceeds from the bonds will be used for the construction of Imperial Lift Station 2 & 3, geotechnical, survey, stormwater protection plan fees, energy fees, and land costs. Additionally, a portion of the proceeds will be used to pay certain non-construction costs associated with the sale of the bonds.
The bond issue is structured with principal beginning in 2019 through 2043. Average annual debt service requirement is estimated at $1,201,971 after this issuance. This issue extends the final maturity date by one year, but since the district will exist in perpetuity, the City will never dissolve the district nor assume their debt. As such, staff recommended in 2017 that the City allow extension of the final maturity in 1 to 2 year extensions, as the development builds out.
Staff recommends Council approval of Resolution No. 18-15 authorizing the issuance of Imperial Redevelopment District Unlimited Tax Bonds, Series 2018 in the amount of $6,055,000. The district plans to sell the bonds in April 2018.