Tuesday, April 16, 2013
Flower Mound passes resolution to fund stalled River Walk development
Developers hope that special Municipal Management District will fund the ambitious project.
The resolution represents the first of many steps needed to create the district, which would be the River Walk Municipal Management District (MMD) No. 1. The Denton County Commissioners would next need to approve the resolution at Tuesday's meeting. Then, a bill would have to pass the Texas House of Representatives and the Texas Senate before being signed into law by Gov. Rick Perry.
At that point, the MMD item would come back to the council for several other steps, including coming to terms on a development agreement with Centurion American, the developer that recently purchased 107 acres of the River Walk property.
The River Walk, which is located north of FM 1171, west of Morriss Road and east of FM 2499, was approved by the council in 2008 but saw limited progress because the original property owner went bankrupt. Only the hospital, medical office buildings and a small number of apartments have been built.
The MMD would be funded by levy assessment on property within the district. The money could only be used to fund roadways, water, sewer and drainage. The assessment would be in addition to the other taxes residents in the district have to pay, such as school taxes. The district would not be able to levy ad valorem property.
The district would be allowed, per town council approval, to issue tax-exempt debt to reimburse the developer for the infrastructure costs.
Mehrdad Moayedi, president and CEO of Centurion American, told the council the reason he is seeking an MMD is to provide more funding options for various amenities of the project.
By having the River Walk as an MMD, Centurion American would pay for the project's infrastructure, including the river walk amenity, the roads and the utilities, up front to get the project going. Bonds could be sold after more of the project is built. Moayedi said that money could be used for items needed to make the River Walk a destination.
"We feel like more has to be done to attract the high-end restaurants and businesses we want for the River Walk, such as having a chapel, a bell tower and art throughout the project," Moayedi said. "This allows us to get reimbursed and then spend the money on other amenities."
Moayedi said if the River Walk can't become an MMD, it would limit the development's funding, thus reducing the amenities it could have. Moayedi also said the reduction of apartments in favor of townhomes and villas may not happen either without the funding options.
Council members asked several questions to Moayedi and Kirk Wilson of T. Wilson & Associates, which represents investment partnerships and developers. Many of the questions were posed by residents via email regarding the risks of MMDs.
One such question was what would happen if Centurion American goes bankrupt.
Moayedi said the lender would pay the debt if that happens, adding that the debt would belong to the district and not the town. Town attorney Terry Welch said the only way the town would be held responsible for the debt is if the town dissolves the district.
Welch addressed other issues that came up regarding the district's powers. He said the MMD would not be allowed to create or change town ordinances, zone land, approve site plans or impact the master plan or SMARTGrowth. He said the development agreement would be so detailed that it would limit what the MMD can do.
In the end, council members agreed that passing the resolution at least gives the town the option of using the MMD as a funding source to help ignite the River Walk, even though the council could decide not to pursue the special district later.
"I'm prepared to say 'no' before we even get to the development agreement if this isn't the right thing to do," said Councilman Bryan Webb. "But if we don't approve this resolution, we've taken it out of the toolbox."
Earlier this month, Moayedi discussed with the council his plans for the River Walk, many of which are the same as the original plan from 2008. He said he hopes to have an entertainment area that would include a restaurant/arcade facility, a bowling alley and a retail building.
Other components include a variety of residential options, an amphitheater, offices, restaurants, an assisted living center, a memory care facility, offices and various parks.
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