District Background

The Imperial Redevelopment District was created to support the development of the Imperial Sugar Company and adjacent property, which is an important part of the City’s history.  Successful redevelopment of this area is dependent on an implementation development plan that preserves iconic structures and promotes a sense of place for them.  The development is structured as a mixed-use, integrated development with regional draws for entertainment and business.  Neighborhoods include low-maintenance, luxury patio homes, single and three-story Brownstones, and luxury single-family homes.

While the District was created by the Texas Legislature, the District has agreed to comply with Chapter 5 of the City’s Code of Ordinances through the Redevelopment Agreement.  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 special district bond issues, even if the special district won’t be dissolved.  The resolution provides terms for approval of special district bonds such as maturity dates & structure, capitalized interest and TCEQ approval.  These guidelines are in place to protect residents in the district and ensure the total tax burden on residents is appropriate. 

The District contains 746 acres and 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 the historic refinery site, which is planned to be redeveloped as a mixed-use lifestyle center utilizing historic structures, and Constellation Field, a minor league baseball stadium which is the home of the Atlantic League Sugar Land Skeeters.

Development of Imperial began in 2010.  The District currently includes approximately 151 developed acres of single-family residential development (573 lots).  As of December 1, 2018, the District contained 295 single-family homes completed and occupied, 19 single-family homes completed and not occupied, 67 single-family homes in various stages of construction, and 192 vacant developed lots.  Homes within the District range in price from $420,000 to $1,500,000+.

The District contains approximately 14 acres of multi-family development including Imperial Lofts; the Overture at Imperial, an age restricted residential development; the Children’s Discovery Center, Sugar Land Heritage Museum and Visitor Center are on approximately 1 acre; and a Raceway gas station/convenience store is located upon 2 acres within the District.  In addition, a portion of the Nalco Champion corporate offices and parking area upon approximately 18 acres are located within the District.

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 No. 3) issued by the District.

To date, the District has been in compliance with the terms of the third amendment and the allocation of funds has been consistent with the flow defined in the amendment.  The proposed issue puts the District approximately halfway through the $34 million authorized to be reimbursed before the City receives its $12.6 million reimbursement for infrastructure.

Bond History and Proposed Issue

Based on voter authorization in an election on November 8, 2011, the District has authorization for $480,667,000 in bonds for the following purposes, including refunding bonds.  To date, the District has issued $30,335,000 including the proposed bonds, and $30,045,000 will be outstanding after the proposed issue.  These bonds are payable from District property taxes.

* Includes proposed issue (series 2019)

The District has also previously issued one series of contract revenue bonds, which have principal amount of $4,845,000 outstanding as of December 1, 2018.  These bonds are payable from the TIRZ Increment Fund and not District property taxes.

Previous District bond issues funded the District’s share of University Blvd N. / S. Stadium Drive and the bridge over Oyster Creek.  The City fronted the cost of the initial extension north of US90A, and the District is responsible for the second phase over Oyster Creek to the prior termination of Stadium Drive.  The District will reimburse the City for a portion of its share of the initial extension by 2020, as well as provide for additional costs associated with Phase II.  Ultimately, the District is responsible for approximately 75% of the roadway project costs, with the City’s share limited to approximately 20%; the remaining funding came from Fort Bend County.

Proceeds from the sale of the Bonds will be used for construction cost of $3,884,626 and non-construction costs of $1,760,374 (including developer interest) for a total of $5,645,000.

Proceeds from the bonds will be used for clearing and grubbing of the South Bend Area, Phase I detention ponds/drainage facilities, water, sewer and drainage items associated with Collector roads 1A, 1B, 2 and 3 contracts, water & sewer improvements along the Imperial Bridge at Oyster Creek, SH6 clearing and grubbing and drainage improvements, Imperial Lift Station 3 with fees, Tract 2 Imperial Sugar drainage and mitigation report, land costs, engineering, testing and geotechnical survey and storm water pollution prevention. 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 2020 through 2044. The maturity structure pays down 40% of principal in the first half of the maturity schedule, consistent with Resolution No. 11-07.  Average annual debt service requirement is estimated at $1,781,194 after this issuance.  This issue does not extend the final maturity date of the debt.  This District will exist in perpetuity; the City will never dissolve the District nor will it be responsible for its debt.

Summary and Recommendation

The proposed bond issue was discussed with the Intergovernmental Relations Committee on January 15, 2019, and City staff attended the Imperial Redevelopment District board meeting on January 17, 2019. At the board meeting, the District's attorney led a review and discussion of the Redevelopment Agreement along with the timeline for district bond issuance, including application and approval by TCEQ.  The purpose of this discussion was to ensure that all parties agreed that the District is meeting its obligations under the Redevelopment Agreement as it relates to bond issuance. 

Based on that discussion and the completed analysis, staff believes this issuance complies with the Redevelopment Agreement and City policies.  With that, the next step is for City Council to approve Resolution No. 19-02 authorizing the proposed bond issue: Imperial Redevelopment District Series 2019 Unlimited Tax Bonds in the amount of $5,645,000.  The District plans to sell the bonds on February 21, 2019.

Please note that the proposed bond issue by the Imperial Redevelopment District is not the City’s bond issue, and the City will not assume the debt as the District will exist into perpetuity.