2012-06-04 CITY COUNCIL PUBLIC HEARING MEETING MINUTESMINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, HELD ON MONDAY, JUNE 4, 2012, AT 6:00 P.M., IN THE
COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS.
Mayor Reid called the public hearing to order at 6:00 p.m. with the following present:
Mayor
Tom Reid
Mayor Pro -Tem
Scott Sherman
Councilmember
Woody Owens
Councilmember
Susan Sherrouse
Councilmember
Greg Hill
City Manager
Bill Eisen
City Attorney
Darrin Coker
City Secretary
Young Lorfing
Absent: Councilmember Felicia Harris.
Others in attendance: Jon Branson Assistant City Manager; Matt Buchanan President of
Economic Development Corporation; Danny Cameron Public Works Director; Vance
Riley Fire Chief; Trent Epperson Project Director; Mike Hodge Assistant City Manager;
Lata Krishnarao Planning Director; Sparkle Anderson Public Affairs Manager; Harold
Ellis Senior Planner; Skipper Jones Assistant Director Projects Department.
PURPOSE OF HEARING — TO CONSIDER PROPOSED ROAD ASSESSMENTS FOR
PORTIONS OF BUSINESS CENTER DRIVE THE CITY OF PEARLAND PROPOSES
TO IMPROVE BUSINESS CENTER DRIVE FROM WEST BROADWAY TO COUNTY
ROAD 59. THE ESTIMATED COST OF THE PROJECT IS $4,842,544, AND THE CITY
PROPOSES TO ASSESS OWNERS OF PROPERTY ABUTTING THE PROJECT AT A
RATE NOT TO EXCEED $681 (TOTAL ESTIMATED COST MULTIPLIED BY .90
DIVIDED BY 6,868.1 FEET) PER FOOT OF FRONTAGE ON BUSINESS CENTER
DRIVE. Mr. Darrin Coker, City Attorney.
STAFF REVIEW TO CONSIDER PROPOSED ROAD ASSESSMENTS FOR
PORTIONS OF BUSINESS CENTER DRIVE THE CITY OF PEARLAND PROPOSES
TO IMPROVE BUSINESS CENTER DRIVE FROM WEST BROADWAY TO COUNTY
ROAD 59. Mr. Darrin Coker, City Attorney.
City Attorney Darrin Coker gave a Power Point presentation regarding the proposed road
assessments. In 2008 the PEDC funded a Preliminary Engineering Report (PER) that
was conducted by the City to extend a four lane segment of Business Center Drive
Page 1 of 7 — 6/4/2012
(BCD) from CR 59 to just south of Broadway. A four and two lane segment of the
roadway has already been constructed south of Broadway as part of the Pearland Town
Center development. The PER included a drainage study, survey, phase I environment
assessment, signal warranty study and 30% plan and profile drawings. At the same
time, the City worked with Brazoria County to design the intersection of BCD with CR 59
which would require the relocation of the intersection of Southfork Parkway to match the
new intersection of BCD. The County committed to reconstructing County Road 59 from
SH 288 to a four lane segment that would taper to a two lane segment just west of the
new intersection. The CR 59 northern right-of-way line is the southern boundary of the
City limits in this area and the roadway is in the City of Manvel's ETJ. The PEDC
previously budgeted $5.51VI in FY 09-10 to construct Business Center Drive which was
going to be funded through the issuance of debt. To -date the Corporation has spent
$126,972 on the preliminary engineering report. This project was shelved in late 2009 as
a result of the general downturn in the economy, lack of development partners and the
high cost of the needed improvements to the Corporation. Benefit: The benefit of the
project is to provide access to 86 acres of undeveloped property in the immediate area
that is zoned commercial. A secondary benefit is the roadway would provide alternative
access to the interchange of Broadway and 288 allowing traffic to utilize
Magnolia/Southfork to access both the Pearland and Shadow Creek Town Centers
without needing to travel on FM 518. The project will also leverage additional public
infrastructure improvements by private developers and Brazoria County. Parkside
Capital: In early 2011, the PEDC and the City were approached by Parkside Capital who
at the time were in negotiations and eventually purchased the southern 40 acres of the
alignment of BCD from Compass Bank who had recently foreclosed on the property.
Parkside's intention is to develop the infrastructure improvements, subdivide and sell lots
to various end users. In May of 2011 the City entered into a development agreement
with Parkside where the developer committed to the following: 1- ROW and Easements
— Parkside secured from multiple property owners to the north both the necessary right-
of-way and easements to construct the roadway and utilities to serve the area. 2 -
Sanitary Sewer and Water — Parkside agreed to finance the design and construction of
the sanitary sewer from the intersection of Broadway and Business Center Drive to CR
59 including the installation of a sanitary lift station. They also will extend water from the
southern boundary of the Pearland Town Center site to CR 59. Parkside will be
reimbursed for these expenses from MUD 34. 3- Roadway - Parkside also committed to
pay for the remaining design and engineering for BCD and to pay for the construction of
the four lane segment of BCD up to the northern property line of their east parcel.
Parkside's total investment is estimated at $800,000 for the sewer and water, $357,045
for roadway design and $1.5M for the construction of a portion of BCD. In May the City
also entered into an interlocal agreement with Brazoria County where the County agrees
Page 2 of 7 — 6/4/2012
to complete the improvements to CR 59 at a cost of approximately $1.1M. The last
component of this project is the financing of the roadway north of Parkside Capital's tract
to the current terminus of BCD to the north. The total cost of the roadway is estimated at
$4.8M and for the remainder of the roadway is estimated at $3.3M. Nine separate
owners have frontage along BCD to the north of Parkside's tract making the likelihood of
all of them coming together to finance the remaining segment highly unlikely. Road
Assessment: An option is for the PEDC to finance the remaining $3.3M of cost for the
roadway with a portion to be repaid to the Corporation by the City utilizing a road
assessment. The City and the PEDC would have a financing agreement that would
outline this process. The remaining cost not repaid by the City would be a cost to the
Corporation. In December the PEDC approved funds for the City to conduct the
necessary enhancement study to determine the roadway's benefit to surrounding
property owners. State law allows the City to assess the benefiting property owners no
more than the value of the special benefit conveyed or 90% of the improvement cost,
whichever is less. The study showed that all the property owners, except two, will
benefit by more than the cost of the improvements and as a result can be assessed 90%
of the improvements cost.
BCD Roadway Improvement Items
Estimated LF of
Frontage
Cost
PER Costs
$
126,927
BCD Construction Estimate 90% Plans
$
3,915,000
Construction Contingency 10%
$
391,500
Construction Management 3.5%
$
150,728
Construction Inspection 3.5%
$
150,728
Material Testing 1.5%
$
64,598
Construction Administration 1%
$
43,065
BCD Roadway Total
$
4,842,544
Cost per LF
$
681
Affected Property Owners
Estimated LF of
Frontage
Pro -Rated Share
of Total Costs
Roadway
Assessment
Percentage
Land
Owner's
Assessment
Remainder
Fishman, George
494.48
336,948
90%
303,253
33,695
Varani, Rani
990.95
675,251
90%
607,726
67,525
Parkside - 2 Lane Segment
504.53
343,796
90%
309,416
34,380
Weems, F. Carrington
496.55
338,358
90%
304,522
33,836
Goldstar
247.23
168,467i
90%
151,620
16,847
YLT 288 Partners
247.38
168,569
90%
151,712
16,857
Page 3 of 7 — 6/4/2012
Alfonso 1 1013.42 1 690,563 1 63%
CenterPoint
636.96
221.067 1 21
_L...I I o I 93A A7 I 1R9 49A 1 0% 1 - 1 162,498
Parkside - 4 Lane
Sub -Total Funded Roadway Portion - Parkside
BCD Roadwav Total 1 7106.57
The total upfront outlay of funds for the Corporation will be $3.31VI with $2.21VI to be
repaid to the Corporation from the City through the assessment proceeds over an
undetermined period of time. The remaining $1.1 M would be a cost to the Corporation.
The purpose of the public hearing is to receive public comment regarding the proposed
improvements and the proposed assessments. If the City Council chooses to proceed
with the assessment process, a couple of issues will need to be determined before
adopting an assessment ordinance to create a lien on the affected properties. The lien is
a first and prior lien on the property and is superior to any other lien other than a lien for
county, school or city taxes. Staff proposes having the lien collected at the time the
property is sold or when the property development permit is issued. The assessment
statute allows the City to impose hard dates for collection of the lien; however, it is the
intent of staff to defer collection until the property is sold or developed to avoid placing an
undue burden on the property owners. Additionally, the Council will need to determine
the interest rate on the lien. State law allows the City to determine the interest rate not to
exceed 8% annually. Included in your packet is a copy of the Bond Buyer Index that
could be used a fair standard for determining the annual interest rate to be applied to the
liens; however, the Council could also use a fixed interest rate if it desires. It should be
noted that staff also proposes not having interest accrue on the liens until January 1,
2014 in order to provide an incentive for the property owners to pay off the liens early to
avoid the added costs associated with the interest. Following the public hearing, the
next step will be for the City Council to adopt the assessment ordinance. If the Council
desires to proceed with the ordinance, it will be scheduled for the June 11th agenda
along with the finance agreement with the PEDC that would allow the PEDC to get
reimbursed as the liens are collected by the City.
CITIZEN COMMENTS:
George Fishman, 3406 Hampshire Street, 3701 Business Center Drive, addressed
Council and stated he is not against it, he is for the road. He stated there are a couple of
issues; one is the 90% valuation and all the benefactors are not in the equation properly.
Page 4 of 7 — 6/4/2012
=oU"n'f_un'dedRoadway Portion
3,318,485
Total
2,484,917
833,568
Parkside - 4 Lane
Sub -Total Funded Roadway Portion - Parkside
BCD Roadwav Total 1 7106.57
The total upfront outlay of funds for the Corporation will be $3.31VI with $2.21VI to be
repaid to the Corporation from the City through the assessment proceeds over an
undetermined period of time. The remaining $1.1 M would be a cost to the Corporation.
The purpose of the public hearing is to receive public comment regarding the proposed
improvements and the proposed assessments. If the City Council chooses to proceed
with the assessment process, a couple of issues will need to be determined before
adopting an assessment ordinance to create a lien on the affected properties. The lien is
a first and prior lien on the property and is superior to any other lien other than a lien for
county, school or city taxes. Staff proposes having the lien collected at the time the
property is sold or when the property development permit is issued. The assessment
statute allows the City to impose hard dates for collection of the lien; however, it is the
intent of staff to defer collection until the property is sold or developed to avoid placing an
undue burden on the property owners. Additionally, the Council will need to determine
the interest rate on the lien. State law allows the City to determine the interest rate not to
exceed 8% annually. Included in your packet is a copy of the Bond Buyer Index that
could be used a fair standard for determining the annual interest rate to be applied to the
liens; however, the Council could also use a fixed interest rate if it desires. It should be
noted that staff also proposes not having interest accrue on the liens until January 1,
2014 in order to provide an incentive for the property owners to pay off the liens early to
avoid the added costs associated with the interest. Following the public hearing, the
next step will be for the City Council to adopt the assessment ordinance. If the Council
desires to proceed with the ordinance, it will be scheduled for the June 11th agenda
along with the finance agreement with the PEDC that would allow the PEDC to get
reimbursed as the liens are collected by the City.
CITIZEN COMMENTS:
George Fishman, 3406 Hampshire Street, 3701 Business Center Drive, addressed
Council and stated he is not against it, he is for the road. He stated there are a couple of
issues; one is the 90% valuation and all the benefactors are not in the equation properly.
Page 4 of 7 — 6/4/2012
Mr. Fishman stated he was going back to 2008-09 where they had agreements with the
City. It was 75% for the City and 25% for the land owners and donating the right-of-way.
That vanished; it would have helped with their business decisions to donate their right-of-
way. He further stated if they had have meetings with Parkside and it would have helped
knowing they were not considering that at that time. Now, they received the new plan
that has 90% to the property owners. He further stated he wanted to go back to the 75%
/ 25% plan that would be a fair deal for the City and the property owners.
Peter Nguyen, 11706 Summer Brook Court, on behalf of Alfonso Zapata, addressed
Council and stated after he received the information from the City that Mr. Zapata's
assessment was $450,000. He stated that is not fair for him. They agreed with Mr.
Fishman, they should to go back to the 75% / 25% plan. Mr. Zapata feels that is
excessive on what he can pay.
Carrington Weems, 1603 West Clay, addressed Council and stated the City proposes to
build Business Center Drive which means to him the City is going to build it. He stated he
completely endorses what Mr. Fishman says. Mr. Weems referenced a letter from 2008
from Bill Eisen; City Manager that stated the revised proposal is one-quarter of the
amount. The original proposal of 25% is good for him. Mr. Weems gave a brief
overview of the development of Shadow Creek Ranch. He stated all the property owners
agree to go back to the original deal.
COUNCIL/STAFF DISCUSSION
Mayor Pro -Tem Sherman asked for clarification on the 25% / 75% agreement from 2008
and what changed.
City Manager Bill Eisen stated in 2008 early 2009 there were a number of conversations
which at that time included Economic Development Director Fred Welch. Discussions
were had included some type of proposed assessment of 75% / 25%. At that time
several things happened. The economy took a major downturn and due to a lot of
uncertainties it was set aside. What brought it back to the fore front was a property
owner that was willing to fund the utilities, water and sewer for all the properties plus
100% of the associated cost of the main project and pay all deign cost. Mr. Eisen further
stated in 2008-09 there were discussions; however, no formal agreements were done at
that time.
City Attorney Darrin Coker stated the City has done the 90% arrangement before,
however, it was on a much smaller scale in the 1970's for Yost Road, Shadycrest and
Hamm Road.
Page 5 of 7 — 6/4/2012
Mayor Pro -Tem Sherman asked how much the report cost.
Economic Development Corporation President Matt Buchannan stated $24,000 to
$25,000.
Councilmember Owens asked would the money be coming from the Pearland Economic
Development Corporation or the City.
Economic Development Corporation President Matt Buchannan stated it will come totally
from the EDC.
City Attorney Darrin Coker stated as the property is sold the proceeds from the liens will
be paid to the EDC at that time.
Councilmember Hill asked about the disparity of the $833 million and the $1.4 million.
Economic Development Corporation President Matt Buchannan stated CenterPoint will
most likely never be collected.
Discussion ensued between Council, Economic Development Corporation President
Matt Buchannan, City Attorney Darrin Coker and City Manager Bill Eisen.
Joe Moody requested to speak Mayor Reid allowed Mr. Moody to speak.
Joe Moody, 2320 W. Main Street, addressed Council and stated he wanted to clarify
approximately a year and a half ago no property owners had any utilities. He also stated
he wanted to clarify that each landowner has an agreement regarding the utilities. He
stated he does not want anybody to think that Parkside Capital had misrepresented facts
The land owners have been on board with everything they have done.
Economic Development Corporation President Matt Buchannan reported the EDC Board
has met and has gone over the same numbers and feels comfortable with $3.3 million
that will have to be fronted and then the possibility of getting paid over a period of time.
Mr. Buchannan further stated that he feels this is something that EDC can fund. They
have been over the 5 -year capital plan. He would not be proposing the program if they
could not handle.
Additional discussion ensued between Council and City Attorney Darrin Coker and City
Manager Bill Eisen.
Page 6 of 7 — 6/4/2012
ADJOURNMENT
Meeting was adjourned at: 6:53 P.M.
Minutes approved as submitted and/or corrected this the 25th day of June, A.D., 2012.
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Mayor
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