Title
Consider Verde Center Partners, LLC’s request to extend compliance deadlines of the Master Developer Agreement effective June 8, 2018, with HQZ Partners, LP, MCG-124, LLC, and the Mesquite Medical Center Management District, as amended, for the Verde Center Project located at 21100 LBJ Freeway and authorize the City Manager to finalize and execute the extension.
Body
In June 2018, the City of Mesquite entered into a Master Developer Agreement for the Verde Center Project, a mixed-use development centered around a healthy living center/medical office development. The Agreement outlines the expectations of the City and the Developer with regards to development standards, infrastructure requirements and reimbursements from the Skyline Tax Increment Reinvestment Zone (TIRZ) No. Seven.
The Agreement allowed time for the Developer to seek contracts with potential users and acquire funding sources for the development. The Developer committed to completion of specific elements of the proposed project by June 8, 2023, including the completion of roadway infrastructure that would connect existing bridge infrastructure to Peachtree Road. The agreement also called for initiation of construction for one of the proposed concepts of the development, evidenced by vertical construction in the form of building framing. To date, the Developer has not submitted plans or applied for permits for either component outlined above.
The complexities of this site have been challenging for the Developer since the initial agreement with the City in 2007. The property is bisected by South Mesquite Creek, a major drainage system through the City and limited access to Gross Road and LBJ Freeway. The Developer has implemented financial structures utilizing a state authorized Medical Management District, which is a separate taxing entity within the city limits. Additionally, the Skyline TIRZ covers the entirety of the property and would redirect property tax revenues back to the project to help offset extraordinary infrastructure costs.
The Developer is requesting this six-month extension to evaluate changes to the concept plan to help attract potential users and evaluate drainage design and access needs. During that time, it is anticipated that the City and the Developer would work out a more substantial amendment to the development agreement to identify a timeframe for infrastructure and building construction.
The Developer was asked to submit a request for an extension in writing and will make a brief presentation to the City Council during the meeting. One item identified in the Developer’s request is the apparent confusion over a variance provided for drainage improvements. The Developer sought and was granted a variance that waived the requirement of a Conditional Letter of Map Revision (CLOMR) from the Federal Emergency Management Agency (FEMA). City staff, during a pre-development meeting and without the benefit of historical knowledge of the project, gave inaccurate information that the CLOMR would now be required. Conditions have not changed at this location, and it is staff’s determination that a CLOMR is not required.
The Developer has also made reference to the need for a service road to provide freeway access to this development. While this service road was always considered essential for this project, the concept plans accounted for the potential of the Texas Department of Transportation (TxDOT) not making improvements at this location for many years to come and includes a “backage road” that provides access from the existing bridge to Gross Road or Peachtree Road through an adjacent property. Neither of these issues created any delay in the submittal of plans that would impact the completion of the required work to meet the deadlines outlined in the agreement.
Financial Implications
The economic benefit of this development would be from the potential job creation and additional development created by activity in this area. The City has committed revenues from the Skyline TIRZ toward this development when improvements are made.
Recommended/Desired Action
Staff is making no recommendation on this item.
Attachment(s)
Letter from Jim Ray, Attorney for Verde Center Partners - Formal Request to Modify and Extend Compliance Deadlines
Drafter
Cliff Keheley
Head of Department
Cliff Keheley