City Hall Completes Emergence of Downtown Sugar Land, Texas
by Allen Bogard
While many cities focus resources on revitalizing downtown areas, Sugar Land — located southwest of Houston in Fort Bend County — has successfully created one where none existed before. It’s known as Sugar Land Town Square.
Located in the geographic center of Sugar Land the creation of Town Square accomplished several city goals. It creates a place, or an epicenter, where people gather to shop, eat, attend events and enjoy night life. It builds on a business district through the addition of high-end retail and office space. It includes a new city hall in the heart of downtown Sugar Land. And it places in Sugar Land the county’s first four-star hotel and conference center.
In short, Town Square is a mixed-used development that creates a lifestyle center where community and commerce can come together.
Sugar Land Town Square is the result of a public-private partnership that will have a direct, positive economic impact on the city of approximately $13 million over 25 years. Sugar Land matched its goals with the vision and economic motivations of the private sector to achieve a successful, unique development both for the city and the developer.
Sugar Land was the recipient of an Excellence in Public/Private Partnership Award from the Houston section of the American Planning Association for this project.
An Innovative Approach to Creating Downtown
A product of more than a decade of vision and foresight, Sugar Land Town Square is a 32-acre mixed-use development designed to bring out the best of business, retail, entertainment and living into one central hub. It is carefully planned to accommodate all proportions of business and growth.
It offers:
• a pedestrian-oriented main street and a central business district within walking distance of stores, services, restaurants, entertainment, and a hotel and conference center;
• a 1.2-acre plaza;
• 300,000 square feet of Class A office environment;
• 200,000 square feet of lifestyle retail;
• more than 160 residential condominiums;
• a 300-room, full-service Sugar Land Marriott Hotel and 60,000-square-foot Conference Center; and
• city hall.
The goal was to create downtown Sugar Land and a central business district with amenities that provide benefits to the community.
Sugar Land utilized an innovative approach to apply five different governmental forms controlled by the city to accomplish this public/private project: the city, a 4A Corporation (.25-cent economic development sales tax targeted toward traditional economic development), a 4B Corporation (a .25 cent sales tax targeted toward economic and community development programs), the Tax Increment Reinvestment Zone (TIRZ) and the Sugar Land Development Authority (SLDA, a Texas local government corporation).
Financial analysis guided the decision-making on public incentives, ensuring that the project was self-supporting. The private sector is at risk for the costs of the public improvements until key development targets are hit, triggering incentive reimbursements.
The creation of a Town Square TIRZ captures new value within the geographic boundaries of the TIRZ. The new taxable value from real property improvements is reinvested to pay for TIRZ infrastructure.
Due to the project needs and the funds available from the TIRZ, the city uses the 4A Corporation to underwrite about half of the value of the improvements.
This funding mechanism was crucial as Sugar Land worked with the project developer, Sugarland Properties (now named Planned Community Developers) to make Town Square possible.
Sugar Land City Hall
The most recent achievement of the Town Square project was realized on November 22, 2004, with the opening of Sugar Land’s new city hall. The city’s fourth and final city hall will enable the consolidation of departments and provides expansion for the city’s ultimate population of 200,000.
Sugar Land’s new city hall was designed to complement the Town Square project. City Hall helps transform Sugar Land Town Square into a downtown community center and builds on efforts to transform the adjacent 1.2-acre plaza into a venue ideal for large community events.
Sugar Land City Hall and public plaza received the “Best Community Impact” award from the Houston Business Journal Landmark Awards program earlier this year.
Sugar Land partnered with the private sector in the construction of City Hall, with the developer donating the land and the city funding construction. City Hall is designed for an ultimate building size of approximately 82,000 square feet. The initial build-out of 70,000 square feet accommodates a population of 75,000.
The first floor is designed to welcome the public. It includes a customer service area for permits and payments, a 200-seat city council chamber, the city secretary department, a receptionist area and conference rooms.
The city hall project cost $17.8 million. Funding for city hall was accomplished through a cash payment of $4.7 million. The remaining $13.1 million was funded through the issuance of certificates of obligation.
Sugar Land City Hall was completed on schedule and on budget due in part to the city being one of the first in Texas to use Senate Bill 510 for the construction of a city hall. The legislation enabled Sugar Land to use alternative construction methods other than the traditional sealed bid method.
The Importance of the Plaza
Town Square and our new city hall are assets owned by everyone in Sugar Land. The plaza plays an important role in Town Square’s success as a place that brings our community together, and so far, that is exactly what has happened with holiday and other events.
The goal is to make the plaza an activity-filled arena that facilitates more traffic for retailers. To this end, many more events are budgeted through Tax Increment Reinvestment Zone (TIRZ) funds, retailer fees, and sponsorships.
These include cornerstone events, retail events, and smaller events important to the community, such as: a concert series, performances in the Plaza by local groups, holiday caroling, Girl Scouts and Boy Scouts events, antique car displays, local artists’ art shows, Blackberry Olympics with office-related events and more.
Four-Diamond, Full-Service Hotel and Conference Center
A key component of the project was the creation of the Sugar Land Marriott Hotel and Conference Center, an anchor for the Town Square development.
The SLDA was the focal point for working through all the contracts on the hotel and conference center. The city partnered with a private sector hotel developer to construct a hotel and conference center.
Because of the design of the project and the need to use one contract for both the public and private development, a public bidding process would not work. The public bidding process guarantees the lowest price and works well for public works projects but not public-private partnerships focusing on innovative new developments like Town Square.
The SLDA allowed Sugar Land to accomplish the project; however, Sugar Land was able to set a guaranteed maximum price through a financing mechanism known as design-build. This enabled the city to identify its financial exposure going into the project.
Other keys to this project included:
• The city issued $10 million in certificates of obligation;
• $1.3 million in cash came from the 4B Corporation;
• The 4B Corporation issued $8 million in debt; and
• The hotel occupancy tax will be used to fund the majority of the debt.
At approximately $54 million from all entities involved, this was — without exception — the most complex public-private endeavor ever undertaken by the city. It was a project filled with hurdles but worth the effort.
History Preserved in Architectural Elements
While Town Square has forever transformed the face of Sugar Land, its history has been commemorated and preserved in unique design elements of Town Square.
The plaza centers around a monument of Stephen F. Austin emerging from the Brazos River, the very river that gave life to Fort Bend and Sugar Land. In fact, the Brazos River brought Stephen F. Austin, who led the settlers that founded Fort on the Bend, later known as Fort Bend. So it’s fitting that Stephen F. Austin overlooks the development of downtown Sugar Land.
Achievements
Even with the factors contributing to past economic downturns, Sugar Land Town Square remained a viable project. Initial projections are starting to come in.
• The city had minimum thresholds for taxable value, and those are being met: $67 million of property value is on the ground, and the city has a four-star hotel and conference center that didn’t exist previously.
• Town Square’s hotel and conference center has hosted conferences and conventions and was fully booked during Super Bowl XXXVIII and the Major League Baseball All Star Game.
• The sales tax revenues are coming in above expected levels.
• Town Square has added a new excitement to the city. It is an entertainment venue and has been packed with people desiring to take advantage of the ambiance and businesses there.
• Nearby Sugar Land Methodist Hospital has begun an expansion that will enable the facility to serve as a regional medical center. Building on current and previous expansions, a $150-million project is scheduled to begin in 2006.
• Fort Bend Memorial Hermann Hospital has announced its relocation near Sugar Land Town Square.
• Other nearby businesses and retail establishments have also experienced new tenants and expansions, including Sugar Land’s shopping mall.
• The developer is accelerating plans for additional parking due to the popularity of Town Square with the public.
• Recent holiday events have attracted thousands, and many more community activities are planned.
• Construction of the first 150,000-square-foot office building has begun.
Allen Bogard is the city manager of Sugar Land, Texas. He is the president of the Sugar Land Town Square Development Authority. He also serves on the board of directors of the Greater Fort Bend Economic Development Council and the Sugar Land Town Square Tax Increment Reinvestment Zone.
Reprinted with permission of Texas Town & City Magazine, a publication of the Texas Municipal League