Development plan carries $40 million price tag

Planners estimate the city of Jersey Village's proposed plans to fashion a multi-faceted planned development area along the future Jones Road extension corridor carries an estimated $40 million price tag and would take several years to carry out.
City Council has not authorized any funding or action on the Jersey Village Transit-Oriented Development" proposal, but is moving forward with a study and financial analysis that city officials say will give them and city residents the information they need to determine if it a plan worth pursuing.
About the plan
That plan, which was developed by the city's consultant Kimley-Horn and Associates, includes a proposed commuter rail station at Jones Road/U.S. 290; about 1 million square feet of commercial and office space; a proposed 18-acre area for higher-density office space along the U.S. 290 border; mixed-use three-to-five-story buildings (commercial on lower floors and office/residential on upper floors) in the area's core," which is a 23-acre area between the future Jones Road extension and Wright Road; a gradual decrease in building height in the 57-acre area outside of the core; primarily residential development brownstones, condominiums, and townhomes in the combined 81-acre neighborhood transition" and neighborhood" sections; about 38 acres devoted to parks and open space; and a 4.35-acre public area that could one day house a Jersey Village City Hall.
The plan also maps out a 75-acre roadway grid. The primary existing roads in the area are Wright, Charles and Fairview, which would be incorporated into the plan. Currently, there are pockets of industrial development throughout the 300-acre area, and single-family homes and mobile home communities off of Fairview.
Last week, members of the Kimley-Horn-led planning team revealed the big picture" numbers behind the plan. They said the $40 million estimate would include reconstructing existing roads and building new roads, laying water and sewer lines, constructing drainage facilities and erecting a 1,200-space parking garage.
The city could share costs with developers and other governmental agencies, said Jon Hockenyos, whose TXP firm conducted the economic analysis. If the city chose to move forward with the plan, city leaders could determine how much the city would put toward the overall project, over what timeframe, and what other funding sources to pursue, such as public improvement districts, management districts or tax increment reinvestment zones.
For example, Hockenyous said if the city issued $30 million in bonds to finance infrastructure projects, the debt service cost to the city over a 20-year timeframe at an estimated 7.5 percent interest rate would be about $2.1 million a year.
He said that at full development build-out about 18 years down the road when all residential units were constructed, and office and commercial sections in full operation the TOD could generate about $4.3 million in property and sales tax revenues each year. The cost to provide city services to the area at full build-out would be about $1.9 million.
City officials eyed the numbers cautiously.
Jersey Village City Manager Mike Castro said under that scenario, the city would not be able to support the debt service payments with revenues generated in the area for several years.
Castro said the city would have to come up with the debt service payments through a tax rate increase, economizing of the budget or some other method until that tipping point.
We need to be comfortable with the notion that it will be many years down the road before we see positive cash flow," said Jersey Village city manager Mike Castro. If we are not comfortable with that, then we need to do it some other way."
No recommendations yet
Scott Polikov, a planning team member and principal with Gateway Planning Group, said the team was not making any recommendations yet. He said they would work with city staff and the city's legal and financial advisors to determine the level of investment the city was comfortable with, what type of projects the city could invest in and a phased approach to the overall plan.
There is no mounting pressure to move forward with the plan, Polikov said, but city officials should keep an eye on pending development along the Jones Road extension corridor.
City, county partnership
The city and Harris County are partnering in the project, which will run a new four-lane concrete road divided by a median from U.S. 290 south over the Union Pacific Railroad tracks, across a 50-acre tract, to a point on FM 529 midway between Wright Road and Charles Road. Construction work will start on that roadway later in 2010.
Also, the Gulf Coast Rail District will be determining the location of proposed commuter rail stations along the U.S. 290 rail corridor in the next six months or so, said Joe Willhite, a project manager with Kimley-Horn. However, it could be some time before funding is available for a commuter rail project.
If nothing is done, then Jones Road is built and will likely get the same type of development that is there now in the area," Polikov said.
He said if the city initiates a public effort to encourage the planned development, and structures zoning codes to encourage that development, entrepreneurial developers would probably come in and start buying up blocks of land. The key is to structure the city zoning ordinance so that it does not put existing business owners out of business. As their property values rise, they will probably make strategic decisions on their own about what to do with their land.
Councilmember Rod Erskine requested, and the Council approved, that the city's planning and zoning commission look at revising the city's zoning laws to prohibit the opening of small used car lots in the TOD area in the future, and any other ideas that could promote land uses consistent with those proposed in the TOD plan.
Councilmembers said they were willing to continue moving forward with the analysis phase, but had several additional questions they would like answered by the planning team.
Wilhite said the team would come back to City Council in May with additional information about developing a regulatory framework, investigating partnership opportunities, and a discussion about annexation phasing and strategies.
We are setting up the architecture here so we can set up multiple scenarios," Hockenyos said.