Graphic by Mary-Ann Zykin
The City of Katy will pay for nearly $10.5 million of the cost of the planned boardwalk project. The remaining total will be paid for by private developers.
When Katy Mills opened in 1999, city of Katy officials envisioned the mall as an engine for growth for the city. The City of Katy and the Katy Development Authority now have plans to protect that vehicle and promote the city’s future growth.
Plans for a boardwalk and park surrounding a retention pond behind Katy Mills began over a year ago by the Katy Development Authority. Those plans have since ballooned to encompass an estimated $49 million project that will include a two-mile boardwalk and surrounding park as well as a convention center complex complete with hotel and a parking garage.
According to city officials, Katy Mills has lived up to its promise of becoming a powerful economic engine for the city. To ensure that the engine continues chugging, plans to utilize the area surrounding the mall began over a year ago, city administrator Byron Hebert said.
“The first economic engine was the construction of Katy Mills, and then all of the development that was built around it. We’re building the boardwalk as another economic engine that can help develop that property,” Hebert said.
The project does, however, have some homeowners concerned with the possible impact the 80-acre project may have on nearby communities’ such as Falcon Point, Grand Harbor, Woodcreek Reserve and Pin Oak Village.
Pin Oak Village Homeowner’s Association president Bryan Matthey said residents of his community are interested in finding out what effect, if any, the project will have on their neighborhood.
“We haven’t seen a lot of information on what the impact [on surrounding communities] is going to be. We haven’t seen traffic studies or anything. I think that it’s important for us to look at the positive effect of [the project] will have on the surrounding areas,” “We don’t think there’s anything negative with this project, but we just want to be more informed about what’s going to happen.”
The Katy Development Authority, created by the city to oversee the development of Katy Mills, was tasked with developing plans for the new project.
“We thought it would be nice to have a little park and walkway around [the site’s existing retention pond], maybe with a small pavilion and a parking area. It just kind of escalated,” KDA President Skip Conner said. “Next thing you know we’re looking at not only the boardwalk, but a convention center and a hotel looking over the water and restaurants, office buildings and homes. It just fed off of itself, and now we’ve got a big project going.”
In addition to its original intent of revitalizing the city’s investment in Katy Mills, the boardwalk will benefit the city by bringing more attention and tourists to the area, Conner said.
“Anything we can do to draw people into the city of Katy will be a benefit in the long run,” he said. “People will come to the boardwalk and buy things and we will get their sales tax, and maybe they’ll like it so much they’ll move here.”
Paying for the project
To pay for its estimated $10.5 million portion of the project, on Jan. 26 the city of Katy approved an extension of a tax increment reinvestment zone or TIRZ put in place nearly two decades ago during the construction of the mall.
A TIRZ sets a baseline tax rate and in successive years as tax revenues increase, the additional tax funds above the baseline amount are reinvested into specific projects approved by City Council.
A private developer will be on the hook for the remaining $39 million of the project, which will include a retail plaza, an office park and high-density residential zones.
The funding of the project will play out similarly to how funding was handled for the construction of Katy Mills, Katy Development Authority chairman Steve Robinson said.
During the planning stages of the mall, a TIRZ was created. Bonds held within that zone were paid off four years ahead of schedule in 2014, now tax revenues from the TIRZ will fund the city’s estimated $10.5 million portion of the boardwalk project, Robinson said.
During the construction of Katy Mills, developer Simon Property Group, L.P. was responsible for paying for the cost of the mall as well as related infrastructure, and then reimbursed for infrastructure improvements by the city from the property’s tax revenue. Similarly, developer Simpkins Group, the owners of the boardwalk property, will pay for the construction of the project’s planned structures and infrastructure, according to Robinson.
The city’s financial obligation to the project will include nearly $300,000 of the estimated $1.9 million water and sewer infrastructure costs, nearly $4 million of the $6.3 million allotted for roads in and connecting to the site, as well as the total cost of the project’s planned $4.8 million parking garage. The city is also expected to pay nearly $2.2 million in landscaping costs and $500,000 for the repainting of the city’s water tank to fit the look of the planned project, according to Robinson.
“The city is not being asked to go out at risk to build new roads, parks, sewers and drainage by themselves that’s why we can afford to reinvest in the existing mall this way,” Robinson said.
The Simpkins Group will be responsible for the majority of the estimated remaining $39 million of the project, including the $10 million and $1.8 million costs of the project’s planned convention center and boardwalk respectively. A private residential developer will be responsible for the costs of building the project’s residential zone. The KDA has not yet named a residential development partner.
“The developer needs to expend the money upfront, build the roads and the infrastructure,” Robinson said. “If they are successful in building vertical improvements that create a financing capability for the city to pay them back, then they will do that. This is the same way we treated Katy Mills when they came in.”
Plans for the boardwalk project
Although the site for the planned boardwalk project had humble beginnings around the retention pond of the mall, the project is designed to make the area a destination for Katy residents and tourists, according to Kerry Gilbert of Kerry Gilbert and Associates, the firm responsible for preliminary planning for the project.
“We looked at what makes a convention center and hotel successful, and to make those things successful you need an office district, high- and low-density residential districts and some retail,” Gilbert said.
Kacey Reina, tourism director for the city of Katy, said that the inclusion of the convention center will help ensure the boardwalk project’s future success.
“A couple years back we had done a study, and we found that there was a need for a convention center in this area,” Reina said. “This is the perfect location for a mid-size convention center that will be about 55,000 square feet. From a tourism perspective the convention center will be a great draw, [and] to have it attached to the hotel and everything else that is planned for the space, we feel that it will all be very successful.”
The KDA will also ask that the city create overlay districts for the boardwalk project’s surrounding areas to ensure surrounding buildings, streets and medians meet the design criteria of the boardwalk project.
“We are proposing overlay districts on both Katy Fort Bend Road and from Kingsland Boulevard to Pin Oak Road. Those streets are the main access to the complex here, so we want them to look good,” Gilbert said.
Timeline for the project
Since plans began over a year ago, the boardwalk project has moved briskly with development expected to begin in two to three years.
“It’s a ten year project,” Hebert said. “We’ll probably get some good movement in the first phases in the next two to three years. We’ll get the boardwalk up and then the convention center. The plaza, hotel and some of those other areas will follow. Hopefully it will be completed in ten years.”
Article Source: Jordan Gribble via Community Impact
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