This is going to be a long blog post, so go to the frig and fix a really good sandwich and get a bottle of your favorite drink. Get comfortable, then come back and read.
The first reference point in this discussion is the Rowlett 2020 presentation that is on the City of Rowlett website: http://www.rowlett.com/index.aspx?NID=1090 You will probably need to return to this link several times, if you are going to do your own research.
In the early years of Rowlett 2020, I didn't have that much of a problem with Rowlett 2020. It was often referred to as "looking at things from the 50,000 foot level." That meant a general overview without a lot of specifics. Certainly, there was a desire for planning our city's growth pattern well in advance of events. We knew the DART station and the GWBT was either here or on it's way. Most knew that good economics influences would be changing for the better in Rowlett because of these events. The question was how? Certainly all believed the tollway and DART were good influences, as far as business development was concerned.
The first sub-areas addressed under Rowlett 2020 were, 1. Woodside,
2. Downtown, 3. Gateway, 4. Healthy Living, and 5. North Shore. The North Shore plan was adopted on April 15, 2014, and stated:
"Intent. It is intended that North Shore be the City of Rowlett’s major employment hub. This is achieved by permitting an integrated mix of uses and building types in order to facilitate and support an employment base." (My emphasis.)
I believe the above premise is the root cause of many mistakes made by City Council in North Shore. Whether intended, or not, the plan fails to recognize that many times there are extenuating circumstances in any plan. How many times have you picked up a manual to learn how to do something, and the very first page says, "This manual is intended to be used as a guide only." Almost any manual I have ever read has started out with the same words. Rowlett's "officialdom" has taken the absence of these words literally. There could be a creation of 40,000 jobs about 15 minutes from North Shore, and there is no provision for modifying the plan to accommodate that event. And, of course, that's exactly what happened.
The discussions of the above areas were still very generalized when adopted. I was on City Council at the time and saw no danger in any discussions to date. I saw great things in store for Rowlett, however because of the complexity of the development business, I began to worry about Rowlett's ability to adapt and make maximum use of the city's potential as events unfolded. Everything seemed to be very "lock step," as one might expect in a controlled society. I was uncomfortable with this. We had no maneuvering room. We didn't have any real estate professionals on board that recognized the potential. In fact, my first exposure to the real estate expertise of Rowlett "officialdom" was horrifying. I've written about it before, but the story is worth repeating as an example of our dismal real estate acumen at the time.
I had just been sworn in as a City Councilman. I attended one of our early meetings and our THEN City Manager was expounding on a new apartment developer she favored to build apartments on the land surrounding the Community Centre. She wanted to lease the land, rather than selling it. In front of witnesses, I ask why she wanted to lease the land instead of selling it. She responded by saying she wanted to keep some control over the land. That was her M.O. Which was control, control, control. Debate was not welcome.
Folks, I'm a former real estate lender. I responded to the former City Manager's "control" answer by saying that no lender was going to lend $20 million on any project in which they didn't have 100% control of the collateral. It was probably okay for the city to lease the land, but they would have to sign a Subordination Agreement and an Assignment Agreement with the lender. The city would have to relinquish all control. That would give the lender control of the project all the while the project remained as collateral, and the ability to sell the project in the case of foreclosure. In my opinion, the City Manager didn't know what the hell I was talking about. That comment stopped her cold. She never responded. Clearly, we didn't get along at anytime after that dialogue. I never heard another peep about leasing the land after that. Our relationship never got better. It was not good, anyway, and it only got worse. The above story exemplified the limit of Rowlett "officialdom's" real estate knowledge. All the rest of our Council expertise came from maybe a book and experience gained from council members buying a house.
Somebody thought it would be a good idea to go get some expertise. I agreed. We interviewed nine consultants. We selected one. I voted for the consulting firm that got the contract. They had the most marketing experience. The first cost was $50K. I didn't see how they could do everything expected for $50K. They couldn't. The last bill I was aware of brought the total up to $1.5 million. But, I was gone by that time. The first Rowlett 2020 review was in 2011, subsequent adoptions were in November, 2013. All the above market areas, and the specs controlling the areas, can be found on the above website.
In my opinion, all market areas but North Shore were worthy of adoption, however I thought North Shore totally missed the mark. When North Shore began to evolve as a market area, I had great expectations. North Shore was a good looking piece of land to any developer or lender. While our "expert consultants" began to gather up pretty pictures to prove that North Shore should be developed as distribution centers and office buildings, (therefore creating employment) I started looking at the land as a lender would, beyond the pretty pictures. There is no doubt the consultants found pretty pictures. Boy!! Did they have pretty pictures. However, they were missing facts. There were some pretty charts, but none were relevant. The charts did not show how much land north of North Shore was being absorbed for commercial development. There were no residential forecasts. No estimates were made regarding when Rowlett could expect to benefit from expanding distribution centers and office buildings. In fact, all I saw from North Shore was dreams......not evidence.
While our consultants were pasting pretty pictures and multi-colored graphs on presentations to City Council, I was looking at boring "stuff." I was talking to warehouse people about the suitability of North Shore for their needs. I also talked to office park developers. They both said the same thing: They would have to pay their workers $1 per hour more for tolls getting to work. There was no substantial cost-free way to get to work. Rowlett had no major free cross streets. We have Merritt Road and Liberty Grove, but they don't go anywhere, and they are primarily residential access streets. Furthermore, the warehouse people said they would have to pay tolls for all their rolling stock entering and leaving their facility. One even estimated that it would cost his profit center $250K a year more to locate in North Shore, if all other comparable costs were equal. Another additional cost was the building of a service road along the tollway. There isn't any.
Well, how long has GWBT been there? Four years? 5 years? And how many inquiries have been made from the distribution center and office building users? Zero. Do we have anything from what our consultants said we were going to get? Nada. I would suggest the consultants missed the market.
During all the above, I was already hearing stories about the new major office construction of State Farm, 15 minutes up the tollway from Rowlett. Then, it seemed like every day another major office complex was announcing new offices from Legacy and the North Tollway to the State Farm complex. There was to be job creation of approximately 40,000 new positions taking place anywhere from 15 minutes to 30 minutes from Rowlett. That was incredible good fortune.
Now, just where did you think many of those people were going to live? There are not many tracts of land between the above office development and Rowlett that is big enough to provide a good residential housing development. Smaller tracts were available, but they were too expensive for popular priced houses. So, what's now being built on these smaller tracts between Rowlett and the new jobs? Apartments and more apartments.
I wasn't the only one to notice that Rowlett had the first major pieces of land suitable for residential development. This was new evidence noticed by many. Developers noticed. However, every time they tried to get approval to develop a subdivision in the North Shore area, they were squashed like a bug. Reasons for denial ranged from "holding land for a credit card company" to "it doesn't fit Rowlett 2020." I attempted to find out who the credit card company was from the then City Manager and one other Councilman that seemed to have knowledge about it. No answer was forth coming. One might think it was not a true story. However, we all know we wouldn't be lied to, don't we? That was about three years ago. I have no knowledge of any credit card company making application to build a 50 acre complex on Liberty Grove Road. However, that same piece of dirt had been denied three times as residential development. Each time the residential developer produced a proposed subdivision plan, the proposed home to be sold were priced at about $3ooK and up. About 250 homes were proposed. The proven absorption rate at the time was about one house per week, or 52 units per year. The project was denied about three years ago. Therefore, if it had been approved at the time, the subdivision by this time would have produced about 150 homes valued at about $45 million and added to our tax base, with another $30 million to be added over the next two years. Our tax base was denied these revenues for no documented reason, except Rowlett 2020 had decreed that the land was to be used for commercial development. FAT CHANCE. Interestingly, when City Council was sitting at the dais to discuss the pros and cons of the development in front of the camera, there were only six votes present. One council seat was vacant. Of the six voters, one talked "for" approval of the subdivision, one "against" the subdivision, and one "neutral" for the subdivision. The other three council persons didn't say a word.
Folks, the Council had an $75-$80 million dollar deal in front of them and three council persons had no observations or questions? Give me a break!! The citizens never knew what the real discussion was. In fact, I know one council member that changed his vote from his previous comments made in my presence. Who talked him into changing his vote? I know the then City Manager didn't want the development. She already had her favorite developer selected, who wanted to build 1/4 mile up Liberty Grove to the east. But, that is a story that I will comment on later in this blog post.
If the above wasn't reason enough for angst, about a quarter mile to the west, on the west side of the tollway and serviced by the last remaining segment of Liberty Grove road, another subdivision was presented and denied. This denial was a few months after the above project. Apparently, the credit card company excuse had been already used, therefore another reason was needed to deny by the City Council.
Did you ever hear of a "Super Majority" required to pass anything by City Council? Me neither. The mayor subsequently told me he hadn't heard of it, as well. However, when we went to City Council that night expecting to get the project approved, we learned what a "super majority" was. It was a scene right out of the first Frankenstein movie I ever saw. The citizens of the Toler Road and Larkin Road area marched on City Hall. It was dark. The voices were loud. I fully expected to walk outside and see ox pulled carts with wooden wheels, hungry and skinny underfed wives and small kids with dirty clothes, and all of them carrying straw torches. They were fighting to get room to sit in City Hall. it was a rebellion.
One thing they all knew in common, and that was what a "super majority" was. Apparently, if 90% of the citizens living within 200 feet of a zoning request object to the zoning, it takes a super majority to pass, or 6 of the 7 total votes. Nobody I knew in city government knew, or admitted to knowing what a "super majority" was. We were advised by Rowlett Planning that night. Who else would know? Do you think someone on Staff knew (including the then City Manager)? If so, how did that information get to the citizens on Toler and Larkin Roads." How did they know about "super majority?" Why wasn't the developer told before investing $100K in the project?
Let me tell you something, folks. I will die convinced that someone on Rowlett's "officialdom" roster sabotaged the developer's request. I think someone from City Hall visited, or caused to have someone else, visit the citizens to tell them about the "super majority." I believe someone from Rowlett "officialdom" incited a riot. I have never seen such resistance to a project that, on the average, the homes being proposed were worth more, on the average, than the homes already there. One resident even said he wished they would build a commercial building in his back yard. The movie Forrest Gump quickly came to mind. Also, the old saying of, "You can't fix stupid" flashed. The denied development would have been the best thing to happen to the area residents. It would have improved the real estate values of all in the neighborhood. Yes, some pasture next to the protesters would have been lost, but the subsequent development would have been the best the current residents could have asked for. Not only that, but I think the land owner suffered unwarranted deprivation of his right to sell his property. What a terrible, terrible mistake of our City Council. What did it cost you?
This subdivision would be running slightly behind the first subdivision mentioned above. By this time, it would probably have added $30 million to the tax base. Both subdivisions would now be adding $600K per week, or better, to the tax base. Instead, both sites are languishing as pastures for a couple of horses and goats, and taxed at hardly anything because the land is listed as agricultural. What a waste of assets. However, it is true that the subdivisions did not fit the Rowlett 2020 forecast. I estimate the total loss to our tax base at this time to be in the neighborhood of $75 million. The Rowlett taxpayers are making up the loss of this revenue.
Three or four month ago, a developer requested that he would like to build a subdivision that very closely followed Form Base Code requirements. I was interested in the project. I drove out and looked at the site. Clearly, the highest and best use was residential development. This subdivision was in the far west part of North Shore. The developer asked for some concessions from Form Base Codes. The concessions were minor. In fact, Rowlett Planning spoke in favor of the concessions. One issue that remained in my mind was the spacing of trees. The developer requested that trees be spaced 30 feet apart, instead of the FBC requirement of 20 feet apart. I presume everyone on Council thought the developer was trying to save some money and "cheat" the system out of trees. Folks, I was watching this on Live Feed. The lots for the houses were proposed in accordance with FBC. That meant the houses were quite close together. If you space the trees 20 feet apart, most certainly there will be many driveways with trees in the middle of their garage drive on front entry houses. Thirty feet spacing allows some leeway. This issue and some others were the best presentation I have ever seen in attempting to meld the marketplace with the Form Base Code. The developer was really trying to comply.
The project was turned down. The loudest reason given was, "that it didn't comply with Rowlett 2020, and we don't have any idea what will develop in the future." Folks, that reason was given rather loudly. The council person saying it was citing exactly what's wrong with having no flexibility. Please note the words, "we have no idea." That council person is still on council.
Now, lets talk about the residential development that DID get approved up near the North Shore area.......the one the then City Manager wanted. It was announced with a lot of fanfare, with bugles playing, parties thrown at the site, newspaper articles, photo ops for everybody, etc., etc., etc. If you want detail about this subdivision, just read the blog a few pages back from this one. I have concerns about this subdivision. Please be advised......I don't want it to fail. It would be bad for Rowlett. However, the ground breaking was June of 2014. Even with the horrible wet weather we had the following Spring, the subdivision should have completed within 12 months. This is part of what I do for a living. I know how much time it takes, unless there is government interference or incompetence. The land development took a year longer than it should have. I told the mayor several times that he was being lied to. I even bet him $20 one time than a certain promise the developer made wouldn't happen. The mayor didn't take the bet. I would have been $20 richer if he did. The subdivision in question is Homestead at Liberty Grove. It was highly touted as Rowlett's first Form Base Code subdivision. It was to be the grandest thing to ever come to Rowlett and would preview the future of Rowlett development. The grins from Rowlett "officialdom" were stretching from ear to ear.
But, alas. The subdivision, with two of the best residential marketers in the D/FW area selling, and a far superior housing market to sell in, can't keep up with the Lennar subdivision across the street. Absorption rates of the subdivisions are discussed a couple of blogs back. One can not blame the builders. They're good builders. I don't think their product fits well on these lots. Also, I think the street design is awful, and cars won't fit in the rear garage drives, and it's against HOA policy to park in front, and you can practically lean against any house to rest while walking. The sidewalks are so close to the front of the houses. In any event, this is what your previous City Manager wanted. It's my belief that she did what she could to torpedo the two denied subdivisions to protect Homestead. Once again, a demonstration of her incompetence as a real estate analyst. Sadly, she still has disciples with Rowlett. Her influences are probably still with Rowlett.
Folks, there is nothing wrong with a plan of action. In fact, its desirable. However, its wrong in any business to fail to change the plan in the presence of evidence that says the plan is inaccurate or wrong. It's just common sense. Shouting out that, "It doesn't fit the plan" is simply a poor excuse, if you can't prove the plan is accurate.
We need real estate development experience, or know how to get it. Please note, the operative word is "development." There's more to real estate than selling houses. A good developer may not have $30K in dental work. That's because a good developer is focusing on numbers, not selling houses.
This post has become far too long. However, I felt all had to be said. The other Rowlett market areas and the Form Base Codes deserve some discussion, but they will have to wait. Most are not as "off base" as North Shore.