We've covered a lot of ground since February. Let's try to tighten it up a bit. Below is the basis on which to ponder where our future leads.
Northshore: We have approximately 1000 acres on the north side of Rowlett that is pretty much open land. A brand new 4-6 lane highway cuts right thru it. To a casual observer, this is an area that would be ripe for development, particularly since it is located in the North Texas market area, arguably the best real estate market in the USA. That is true, but it has to be the right real estate. It can't be just any real estate. The market won't absorb 1000 acres of 10-story office buildings.........anywhere, let alone Rowlett. Located on a toll way doesn't help as much as you might think. Our previous consultants recommended, and it was accepted by Rowlett "officialdom" that the 1000 acres should be developed into office and warehouse industrial park. I have seen no hard evidence that supports this assertion. However, I have seen hard evidence that supports residential development of "high dollar" homes in the $300K and up price range. Our City Council has turned down two of these proposals, each of which would have contributed $600,000 per year to tax revenue. That is $1.200,000 that other tax payers would not have to make up. The question is, "WHY?"
Land east of Community Center: This land never made it to a City Council vote, but it almost did. The concern here is the almost complete absence of good real estate analysis. It was some of the worst underwriting I have ever seen. For example, the land was values by "staff" as worth $167K, based on 6 point cap rate. The land is worth $3-$4 million. There was NO escalator language in the lease proposal. For 95 years Rowlett would not receive an increase in rent. The "tenant" could sign a lease with Rowlett based on $10K income for first five years: $20K a year for the next 95 years, and the tenant would be free to sign a sub-lease with another party based on land value of, say, $3,000,000.....or $180,000 per year........and never do a thing. In addition, our then city manager proved she new nothing about real estate loan structure. She didn't know about lien priorities, subordination agreements and assignment agreements. Thank goodness, this deal didn't go thru. How did all this happen? WHY?"
The Villages of Rowlett: This is a project I support, as far as real estate product is concerned. However, I am not delighted with the real estate deal offered to the developer. It costs too much. The product and the deal are two completely different issues. In my opinion, one is good for Rowlett and the other is not. I think the product will be a marketing success and will bring people and additional business to the downtown area. However, the deal is too expensive to the Rowlett taxpayers. I have added up over $11,000,000 in costs, and all the costs are not yet accounted for.
Plano taxpayers are putting up $14 million and getting Toyota, and all that the new jobs and housing needs mean to local merchants. McKinney (I think) is putting up $10 million and getting a firm out of San Diego and getting 1450 jobs and all the economic support that those jobs will need. Rowlett is putting up $11,000,000 and receives no revenue for 15-17 years. There is some modest expectations of additional business downtown.......but nothing in the way of tax relief to the balance of the town in general. Who negotiated this deal? When I ask who negotiated the terms, I get no satisfactory answers. WHY such terrible terms for Rowlett?
Homestead of Liberty Grove and Form Based Codes: The fourth, and perhaps the best underwritten project, is Homestead. This is another project I support........but I'm a little apprehensive. This project has been slow coming out of the starting blocks. I don't think the city has been the cause of the delay. This has been one (perhaps the only) favorite residential son in Rowlett. It would appear that nothing this developer did could be wrong. In fact, the two residential developments turned down by City Council above could have potentially been competition to Homestead. However, I think that would have been good. Success breeds success. Two additional upscale developments nearby would have generated traffic for all of them. The combined advertising would have generated a lot of interest in Rowlett. That would be good for Rowlett from a number of aspects. However, the product is good. I like it. The problem to me seems to be the marketplace. I would guess that there has been some trouble getting builders to commit to the location and the housing style. I am aware of three marketing plans: 1) Five builders to build in the development. 2) One builder to take over everything. 3) Two builders (Weekley and Cambridge) to build out the development. To me, Rowlett's new Form Based Codes might be presenting some marketing obstacles. I'm not sure the builders are completely sold on them. FBC limits a builder's style. This is not always well received, in spite of what the city says. My concern here is that the City Council doesn't really understand FBC. They paint pretty pictures about family and foot traffic, but nothing about limited design features, pour traffic patterns to some visitors to the residents, and high HOA fees. I don't think City Council has paid sufficient attention to Form Based Codes and their limitations. I wish I knew more about the builder's commitment to build. The form based codes were the darling of our previous city manager and her retinue. City Council didn't sufficiently vet these new limitations placed on Rowlett builders. FBC controls the length of overhang of a roof. What does that have to do with foot traffic? What other area towns have, or are starting FBC? Why? Or, Why not?
All the background to the questions above have been provided in detail within posts of the past. Everything leading up to those questions have been wrestled to the ground. If you're read them all, that's good and I appreciate it. A little review might be in order before answering some further questions. If you are a relative new comer, go back and read some of the earlier posts. The quality of your logic will be based on the amount of information you have. In addition, you may have disagreement with some of my conclusions. If so, you need to know why. As I have written many times in this blog site, it is not important that you agree with me. It's only important to know WHY you agree or disagree.
"WHY?" is the most often repeated question in this blog. The answers are most important. Between now and the next post, ask yourself "WHY?" to all the above. Form up some answers. If you believe some mistakes have been made, and you know "WHY?" then you can focus on where we go from here. At least then we have a chance to fix any problems and plan for a better hometown. That's part of your duty as a citizen and resident.
I will get back with my observations and my answer of "WHY?"
Northshore: We have approximately 1000 acres on the north side of Rowlett that is pretty much open land. A brand new 4-6 lane highway cuts right thru it. To a casual observer, this is an area that would be ripe for development, particularly since it is located in the North Texas market area, arguably the best real estate market in the USA. That is true, but it has to be the right real estate. It can't be just any real estate. The market won't absorb 1000 acres of 10-story office buildings.........anywhere, let alone Rowlett. Located on a toll way doesn't help as much as you might think. Our previous consultants recommended, and it was accepted by Rowlett "officialdom" that the 1000 acres should be developed into office and warehouse industrial park. I have seen no hard evidence that supports this assertion. However, I have seen hard evidence that supports residential development of "high dollar" homes in the $300K and up price range. Our City Council has turned down two of these proposals, each of which would have contributed $600,000 per year to tax revenue. That is $1.200,000 that other tax payers would not have to make up. The question is, "WHY?"
Land east of Community Center: This land never made it to a City Council vote, but it almost did. The concern here is the almost complete absence of good real estate analysis. It was some of the worst underwriting I have ever seen. For example, the land was values by "staff" as worth $167K, based on 6 point cap rate. The land is worth $3-$4 million. There was NO escalator language in the lease proposal. For 95 years Rowlett would not receive an increase in rent. The "tenant" could sign a lease with Rowlett based on $10K income for first five years: $20K a year for the next 95 years, and the tenant would be free to sign a sub-lease with another party based on land value of, say, $3,000,000.....or $180,000 per year........and never do a thing. In addition, our then city manager proved she new nothing about real estate loan structure. She didn't know about lien priorities, subordination agreements and assignment agreements. Thank goodness, this deal didn't go thru. How did all this happen? WHY?"
The Villages of Rowlett: This is a project I support, as far as real estate product is concerned. However, I am not delighted with the real estate deal offered to the developer. It costs too much. The product and the deal are two completely different issues. In my opinion, one is good for Rowlett and the other is not. I think the product will be a marketing success and will bring people and additional business to the downtown area. However, the deal is too expensive to the Rowlett taxpayers. I have added up over $11,000,000 in costs, and all the costs are not yet accounted for.
Plano taxpayers are putting up $14 million and getting Toyota, and all that the new jobs and housing needs mean to local merchants. McKinney (I think) is putting up $10 million and getting a firm out of San Diego and getting 1450 jobs and all the economic support that those jobs will need. Rowlett is putting up $11,000,000 and receives no revenue for 15-17 years. There is some modest expectations of additional business downtown.......but nothing in the way of tax relief to the balance of the town in general. Who negotiated this deal? When I ask who negotiated the terms, I get no satisfactory answers. WHY such terrible terms for Rowlett?
Homestead of Liberty Grove and Form Based Codes: The fourth, and perhaps the best underwritten project, is Homestead. This is another project I support........but I'm a little apprehensive. This project has been slow coming out of the starting blocks. I don't think the city has been the cause of the delay. This has been one (perhaps the only) favorite residential son in Rowlett. It would appear that nothing this developer did could be wrong. In fact, the two residential developments turned down by City Council above could have potentially been competition to Homestead. However, I think that would have been good. Success breeds success. Two additional upscale developments nearby would have generated traffic for all of them. The combined advertising would have generated a lot of interest in Rowlett. That would be good for Rowlett from a number of aspects. However, the product is good. I like it. The problem to me seems to be the marketplace. I would guess that there has been some trouble getting builders to commit to the location and the housing style. I am aware of three marketing plans: 1) Five builders to build in the development. 2) One builder to take over everything. 3) Two builders (Weekley and Cambridge) to build out the development. To me, Rowlett's new Form Based Codes might be presenting some marketing obstacles. I'm not sure the builders are completely sold on them. FBC limits a builder's style. This is not always well received, in spite of what the city says. My concern here is that the City Council doesn't really understand FBC. They paint pretty pictures about family and foot traffic, but nothing about limited design features, pour traffic patterns to some visitors to the residents, and high HOA fees. I don't think City Council has paid sufficient attention to Form Based Codes and their limitations. I wish I knew more about the builder's commitment to build. The form based codes were the darling of our previous city manager and her retinue. City Council didn't sufficiently vet these new limitations placed on Rowlett builders. FBC controls the length of overhang of a roof. What does that have to do with foot traffic? What other area towns have, or are starting FBC? Why? Or, Why not?
All the background to the questions above have been provided in detail within posts of the past. Everything leading up to those questions have been wrestled to the ground. If you're read them all, that's good and I appreciate it. A little review might be in order before answering some further questions. If you are a relative new comer, go back and read some of the earlier posts. The quality of your logic will be based on the amount of information you have. In addition, you may have disagreement with some of my conclusions. If so, you need to know why. As I have written many times in this blog site, it is not important that you agree with me. It's only important to know WHY you agree or disagree.
"WHY?" is the most often repeated question in this blog. The answers are most important. Between now and the next post, ask yourself "WHY?" to all the above. Form up some answers. If you believe some mistakes have been made, and you know "WHY?" then you can focus on where we go from here. At least then we have a chance to fix any problems and plan for a better hometown. That's part of your duty as a citizen and resident.
I will get back with my observations and my answer of "WHY?"
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