What’s inside that special $10 million life-support package for the Regent Square development City Council is considering?
The reimbursements proposed for Regent Square would be administered through the expansion of the Memorial Heights Tax Increment Reinvestment Zone. Under a TIRZ, property tax revenues generated within the boundaries are frozen at a specified level. As development occurs and property values rise, tax revenue above that level, known as the increment, is funneled back into the zone to pay for infrastructure and capital improvements to help attract further development.
Under the plan before council today, part of the increment will be given back to the specific developer rather than the redevelopment authority that operates the TIRZ.
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To be eligible for the money, the development company must begin making public improvements to underground utilities and streetscapes by Oct. 1, begin work on the private aspects of the development by Oct. 1, 2010, and provide 150 free parking spaces, [Public Works & Engineering director Andy] Icken said. GID Urban, which declined comment through a spokeswoman, also agreed to make investments in College Memorial Park Cemetery, a historically African-American cemetery near the adjacent Fourth Ward neighborhood, Icken said.
He added that Mayor Bill White has expressed interest in making similar arrangements with other large developments.
One of those similar arrangements was made a few years ago with Houston Pavilions.
Unnamed “city officials” tell the Chronicle‘s Bradley Olson that GID Urban Development Group was about to put the entire project “on hold indefinitely.”
- Houston lines up stimulus package [Houston Chronicle]
- Regent Square coverage [Swamplot]
Image of Regent Square: GID Urban Development Group
Great news! This is also what is partly funding that pedestrian bridge across Buffalo Bayou.
This funding will only go to public utilities and not to funding the developers project in and of itself.
Houston Pavilions got money to upgrade existing utilities and redo streetscapes. The same thing that the Post apartments did.
This type of funding is also responsible for all the utility upgrades and streetscaping going on in Uptown and Upper Kirby.
The Regent Square will get rid of some of the burden from the City of Houston to upgrade water and sewer facilities (which can get quite costly) up front before construction of the project.
Tax breaks are a great way to encourage development. However, encouraging supply of commercial space and apartments without adequate demand will result in little value to taxpayers. See Houston Pavillions.
Nick,
The problem with your statement is in the demand. There isn’t a demand for retail and apartment space in downtown (no matter how much people want there to be a vibrant downtown).
The area of Regent Square has a much higher demand for residential and even retail. I will agree on office space not having much demand.
A Whole Foods and a retail center is going up right now at Dallas and Waugh which is just a few blocks east of Regent Square. Kroger is and River Oaks shopping center is just down Dunlavy on West Gray.
Amazingly, many restaurants and retail shops aren’t feeling much of the affects of the economic downturn. People are still spending in Houston. It’s just about location. The Houston Pavilions is in a horrible location for residential and shops. As much as I want to see the Pavilions succeed, there is a reality that much be seen.
Demand for residential and retail is pretty strong in certain areas of the city as the previous comment said. The only thing I wanted to add here is that demand is even stronger for the right kind of development. Regent Square will be very pedestrian friendly development. With so many Europeans, East & West coast transplants living in inner loop now and more coming, pedestrian friendly places will be in higher demand even more. I hope developers realize how successful Post Midtown development has been compared to some nearby crap in the area. Hopefully Midtown CVS will sell their building for the betterment of Houston! Success depends on knowing your demographics.
by kjb434: This funding will only go to public utilities and not to funding the developers project in and of itself.
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That’s a big distinction that should have been part of the news story. Thanks for pointing that out.
It’s actually part of the law that set up TIRZ’s in general and in the language for each TIRZ district that is established.
The purpose is to facilitate development or gentrification by allowing the increase in property tax revenues from commercial properties be re-invested within the district by improving existing public infrastructure. Large projects such as Regent Square could test existing infrastructure and put more demands than it can handle. Either the developer has to put up the improvements out there own pockets, or if they are part of a TIRZ district they can have it done with TIRZ funds. This does lessen the burden on the developer and allows localized public money to be spent on local projects.
My guess is either the reporter is inept in this area he/she is reporting or with was left out intentionally to portray tax dollars being given to an “evil developer”.
I have to agree about the lack of demand. I will take it all back if the canyons on Kirby are immediatley filled.
Furthermore, how much “upscale” is there a demand for when Weingartens is hoping to lure in drycleaners to River Oaks? (See story from today on this site)
With all the Dry Cleaning jokes aside, I don’t really pass by a dry cleaner that is not doing lots of business. Usually they are all busy. I’m guessing if you see one that isn’t, it’s because the service isn’t that great.
I’m not advocating more dry cleaning shops, but it seems there is demand for it. To a busy person, having someone else clean work shirts is a big time savings.
Frankly, it is in our interest (as a community) to encourage development in prime locations in already-built areas of the city like this. As opposed to flat-out giveaways like building roads to empty land so developers can build there and make a profit thanks to taxpayer subsidized links to the rest of the city.
A big empty lot where Regent Square is planned affects the quality of life of everyone around it and it’s appropriate for the city government (which is, ultimately, answerable to US) to use tools available to it to encourage this kind of of thing.
John said, “A big empty lot where Regent Square is planned affects the quality of life of everyone around it…”
Well, that might be true, if it weren’t for the fact that that big empty lot has been empty for years, and hasn’t seemed to affect the quality of life around here too much.
I don’t see how it’s in the “community’s interest” to build this project more than any other proposed project.
There’s already traffic-a-plenty on Shepard. If we have to go back and have a taxpayer give away to expand the roads so developers can build there and make a profit… how is it any different? It’s ITL so it’s OK? People OTL pay taxes too. Why doesn’t BLVD place get a cut too? What about that half-built developement on Westhiemer? [can’t remember the name]
The problem with ‘stimulating’ is resulting developments that aren’t economically viable without it -by the developers admission in this case. If there is demand, and it is profitable, it will get built without stimulus. No need to waste taxpayer money. If it’s viable a smart developer will take advantage of the opportunity.
Too many times developers and cities get caught in the ‘build it and they will come’ mentality. It’s easy we love our projects. But… development doesn’t drive demand. Reverse that and bad things happen. Houston Pavillions is a great example of development built to fulfill a demand doesn’t (as of yet) exist.
The space would make a nice park.
One of the reasons that public money is used is that there are a lot of beneifts to the surrounding properties and community that the developer does not get any return on. The TIRZ structure is actually quite elegant, in that it taps the future appreciation in surrounding proerty values to chip in today for a project that will create that value (and that wouldn’t happen otherwise). It is a self-fulfilling prophesy, in a good way.
GoogleMaster,
Those lots have not been empty for a long time at all. Maybe a year at most. It’s was the former site of much of the Allen House Apartments. Those Apartment (although old) usually kept fairly full occupancy.
Also, no part of this money is a giveaway to developers. As usual the Chronicle gets the story wrong or leaves out vital information. Good thing that paper is failing.
The money is spent on public infrastructure that yes will allow the development to happen, but it also improves the public infrastructure for all the existing residents and businesses nearby. I don’t hear people complaining about having upgraded water and sewer lines at no cost to them. Thats what the current residents in the area get out of this. The businesses in the TIRZ (including the future Regent Square project) will be paying for it over time.
Actually, outside of the Regent Square property, the rest of the area is not in the TIRZ district, but they will benefit from the improvements. It’s a win-win without taxpayer money going to special interest. And since the money is only from the incremental increase in property value, it is only coming from businesses in the district. Residents don’t pay into the TIRZ fund through incremental property value increases.
I wish people would actually investigate things versus reading one (very crappy) news article to make a valid opinion of what is happening.
My bad, I had this confused with the corner of W. Dallas and Studemontrose, where there is allegedly going to be a Whole Foods someday. Unless the Whole Foods is going into the development planned for the corner of W. Dallas and Wauuuuuggggghhhh!!! which is somewhere near where the Albritton’s used to be.
Allbrittons was on Waugh. Whole Foods is going in on Waugh at Dallas.
One important matter that has not been addressed is these TIRZ Board members are not elected. You can not get rid of them. The Mayor approves the Boards recommendation which are always cronies of the developers. Take for instance our Memorial City TIRZ which was formed in 1999 by the company Metro National who owns that ugly Memorial City Mall. Our taxpayers in Spring Branch School District refused to enter into an agreement with this TIRZ because of overwhelming dislike for Metro National. Mayor Mobility White gave them permission to tear down 200 year old Live Oak Trees, one of which is on the Harris County Tree Registry. These wonderful old trees are from the orginial farmland of our earliest German settlers.
I hope the City government votes to dissolve this TIRZ soon.
Donna,
Local neighborhoods have more sway over TIRZ projects than you think.
Super Neighborhood 22 had an issue with a large commercial developer in the TIRZ this blog post was about. The developer wanted to reclaim some open space that is currently city park land along Studemont at Washington. SN 22 made there voice heard at the Planning Commission which forced the TIRZ to have a member of the SN on the board. Now the SN has much more input in the activities of the TIRZ.
Oh, and the developer can’t have the parkland even though the city was willing to sell it to them.
CBRE is marketing office space for GID on loopnet. The construction is listed as proposed and the dates push the building starts in to 2011. Does anyone else have any news on this property?
Overpriced and overrated, luxury is just another word to describe new. When the new wears off, you won’t be impressed at all.