Since 2003, Sugar Land Town Square has served as the mixed-use center for the community.  The 32-acre development contains over 560,000 square feet of office space, 240,000 square feet of retail, a 300-room hotel and conference center, 167 residential units, three parking garages, Sugar Land City Hall and the Sugar Land Town Square Plaza.  The development is a public-private partnership developed by Planned Community Developers with various public involvement from the City of Sugar Land, the Sugar Land 4B Corporation, Sugar Land Development Corporation, the Sugar Land Town Square Development Authority and Tax Increment Reinvestment Zone No. 1 – with contributions made from additional participating entities Fort Bend County and Fort Bend County Levee Improvement District No. 2. 

Since its opening, the focal point for the development has been the 1.1-acre plaza at the center of the development.  The location serves as a communal gathering place that provides a venue for municipal sponsored events like the Christmas Tree Lighting and Halloween Town, as well as events managed by the Sugar Land Town Square Property Owners’ Association, including concerts, talent shows, movies and watch parties, children’s events, exercise classes and much more.  Last year, the Sugar Land Town Square Plaza had more than 150,000 attendees and over 270 events.  Additionally, while the Plaza is publicly owned through the Sugar Land Town Square Development Authority, it is privately maintained and operated - with the Town Square Property Owners’ Association and developer having invested millions of dollars in the maintenance of and improvements to the plaza and other infrastructure within Sugar Land Town Square over the life of the project. 

The Plaza has undoubtedly achieved its desired purpose in drawing visitors to Sugar Land Town Square, and Planned Community Developers has expressed a desire to reinvest in enhancements to the Plaza that will further improve sales with existing retailers, as well as heighten Sugar Land Town Square’s reputation among prospective tenants.  The developer, and project owner, Lionstone Investments, have proposed that the project be developed as a public-private partnership with the following scope for improvements:

• Replacing the grass in Town Square with an expanded turf area.

• Providing wood decking with tables and chairs.

• Adding a canopy structure.

• Increased technology, including a sound system, LED lighting (including multi-colored programmable down lighting from Town Square trees), and LED marquee signage on the Sugar Cane monuments.

• Adding a fountain bridge for pedestrians to walk through the fountain, adjacent to Stephen F. Austin.

Consistent with the City Council's mid-term goal of protecting the strength of current economic generators under the "Strong Local Economy" priority, staff recommends pursuing this public/private partnership project due to the tremendous economic importance of this development to the City of Sugar Land and the desire to maintain a thriving retail and office market.  This project would provide the first substantial capital reinvestment in the Town Square and help ensure the development stays strong as newer developments are planned. 

Staff recommends the Sugar Land 4B Corporation (SL4B) be utilized for the potential public investment for the project.  The SL4B is preferred due to its statutorily authorized ability to fund the development of recreational and community facilities, as well as street improvements,  and the capacity within the SL4B’s reserve for opportunities.  SL4B funds are reserved exclusively for economic developmentand cannot be utilized for general fund projects.  This means that residents will be able to continue enjoying a public plaza for which the City is not responsible for the cost of operations and maintenance, as well as benefit from enhancements made to the public amenity without the use of general property tax dollars.

Even with public participation in this project through the SL4B, the Sugar Land Town Square development is still projected to provide a significantly positive cumulative economic benefit to the City of Sugar Land in total – through property, sales, hotel occupancy and mixed beverage taxes – through the life of the TIRZ, as well as provide a significant long-term annual benefit to the City upon the expiration of the TIRZ in 2025 and when the last bonds are repaid in 2027.

In order to move forward with the overall project, City Council must approve three unique agreements.  First, a Consent Agreement is needed between the City, the Sugar Land Town Square Development Authority (LGC) and the SL4B where the City and LGC agree that the SL4B will undertake the project.   The City agrees that the improvements are contingent upon the City providing budget authorization.  Meanwhile the LGC agrees to the installation, construction, and ultimate ownership of the improvements in the Plaza.

Second, an amendment to the existing Contract for Administration of Sugar Land Town Square Plaza is needed between the City, the Sugar Land Town Square Property Owners' Association (SLTSPOA) and the LGC.  In the Amendment No. 1, the SLTSPOA agrees to operate and maintain the Plaza improvements including the electronic signage in the public ROW.  Additionally, the signs are to be operated based on guidelines established by the City, and the overall improvements must meet the Town Square Development guidelines. 

Lastly, a Donation Agreement between the City and LCFRE Sugar Land Town Square, LLC (Lionstone Investments) is necessary for the conveyance of the interest of Lionstone Investments in the electronic  signage.  The Agreement contemplates that Lionstone will donate its interest in and to the two electronic signs to the City, and the City agrees to their placement.

After concurrence from the City Council Economic Development Committee, a workshop was held with the SL4B on December 20th and with the City Council on January 2nd.  Both entities expressed support for the project. 

On January 17, the SL4B held a public hearing, approved a resolution finding the project to be an eligible expense of the Corporation, and authorized a funding resolution for the project, which also provided the SL4B's approval of the Consent and Development Agreement.  Following the meeting, the City's private sector partner requested a minor change to the Development Agreement's indemnity provisions.  As such, the SL4B will consider a resolution that will result in the change made to the Development Agreement at an upcoming meeting.  The SL4B must execute the Development Agreement and Consent Agreement in order for the project to move forward. 

Additionally, prior to the City Council meeting, the LGC will consider and act on the Consent Agreement and the Plaza Administration Contract Amendment.

Staff recommends approval of the Donation Agreement between the City and LCFRE Sugar Land Town Square, LLC and for the Sugar Land Town Square Plaza improvement project.  Following all approvals, the work is currently planned to start in early February and largely be completed by mid-April 2018.