Developer pitches a Fulshear Town Square with a hotel, conference center and sports complex on FM 1093

A developer wants to build a Fulshear Town Square on FM 1093 with a hotel, a conference center, a sports complex and parking garages, plus offices, restaurants and shops. The City Council will discuss a draft agreement on the project Tuesday, Oct. 20. City staff, though, is telling the council it isn't ready to sign.

The item is a memorandum of understanding, or MOU, between the city and 1093 FTS LLC. Mayor Don McCoy asked to have it placed on the agenda. The draft is in the council's agenda packet, which the city posted Oct. 14.

What the developer wants to build

The MOU says the developer owns or controls about 18.7 acres in the city for the town center. The concept plan in the packet shows a hotel with a pool, a sports and conventions center, a ballroom and meeting rooms, a public market, restaurants, medical and retail space, and garages. The MOU says the property sits next to land owned by H-E-B, and the site plan labels that parcel "Future HEB."

The developer also wants a second, 4.7-acre property included, with shops on the ground floor and market-rate loft apartments above. The staff memo places that site roughly at Huggins Drive and FM 359 and says staff has asked to review it separately.

How it would be paid for

The hotel, shops, restaurants and offices would be private. The conference center, the sports complex, their parking and the project's water, sewer, drainage and street work would be "public facilities." The draft lists three ways to pay for them:

• A municipal management district. The city already approved the Fulshear Town Center Management District, but it was never activated. The MOU would appoint its board, add the loft property to it, and allow district bonds for up to 30 years. It expects the district tax to be no more than $1.41. That tax is paid on property inside the district, and other landowners already in the district would get a chance to opt out.
• A tax increment reinvestment zone (TIRZ). The city would consider creating one and ask Fort Bend County to join. Under the draft, the city's property taxes from the project above $500,000 a year, plus all of the county's taxes from it, would be available to pay for the public facilities or their debt. A developer reimbursement agreement could run up to 40 years.
• Chapter 380 agreements. These would return city sales tax collected inside the project, other than at the hotel, to pay for public facilities. A separate agreement would give the hotel owner some or all of the city's hotel occupancy tax and sales tax from the hotel.

The MOU says it doesn't obligate the city or the county to levy a tax, issue general debt or pledge their credit. Each of these pieces would need its own council vote, and the county would have to approve joining the TIRZ.

The draft also commits the city to send TxDOT a letter supporting two driveways onto the FM 1093 access road. Any future extension of McKinnon Road behind the site would have to give the property access.

Why staff says not yet

The staff memo says the developer has paid the incentive application fee, but economic development staff hadn't finished reviewing the application when the packet was put together. Staff flagged several open issues:

• A battery storage component on the site plan isn't allowed under zoning.
• There aren't yet enough details on the Huggins and FM 359 project to decide its zoning.
• Questions remain about how to set up the district, who would own and pay for the public facilities, what long-term operating and maintenance costs would be, and what financial or liability risk the city could take on.
• The legal review of the MOU isn't finished.

Most of the MOU wouldn't be binding, but some parts would take effect as soon as it's signed. One would require the city to negotiate only with this developer on the project for 180 days. Staff says those parts need to be clarified first.

Staff says it wants the council's input on the big ideas, especially whether the conference center and sports complex should be public facilities and whether to use the district for financing. It does not recommend approving the MOU at this time.

The timeline on paper

An exhibit to the MOU lays out a schedule that it calls illustrative only. Chapter 380 agreements would come four to five months after kickoff, and a TIRZ would be created in months seven to eight. The hotel, conference center, sports complex, offices, shops and lofts would be built in phases between months 14 and 36.

The meeting starts at 6 p.m. Oct. 20 in council chambers at the Fulshear Municipal Complex, 6611 W. Cross Creek Bend Lane. The MOU and the concept plans are on pages 357 to 381 of the city's Oct. 20 agenda packet.