Municipal Management Districts[/caption]Two municipal management districts were created in Missouri City during the 84th Texas Legislature to spur growth in an area that has seen a recent decline in retail and residential developments.
State Rep. Ron Reynolds, D-Missouri City, established MMD No. 1 and MMD No. 2 as part of a legislative package intended to spark construction on undeveloped land in the Lake Olympia community.
“[MMDs] help attract businesses and commercial activity,” he said. “This is another tool for the city’s long-term planning for economic development.”
MMDs are similar to municipal utility districts in that they construct basic utility infrastructure, such as water, sewage and drainage. However, MMDs can also fund additional services—such as providing additional security—public amenities and landscaping.
Reynolds said the creation of the MMDs in Missouri City also allows Cernus Development and FLC Parkway to develop two mixed-use developments in MMD Nos. 1 and. 2, respectively.
“[Residents] want to see more opportunities in the [Lake Olympia] area instead of the Sienna [Plantation] and the Riverstone area where a lot of new construction and development is taking place,” he said.
Steve Robinson, an attorney with Allen Boone Humphries Robinson LLP—the law firm representing Cernus Development and FLC Parkway—said the MMDs were created to prevent the city from using taxpayer money to fund the utilities for the undeveloped tracts.
“New growth should pay for its own infrastructure so the existing residents of the city are not paying for the development of infrastructure for new growth,” Robinson said. “The management district is a vehicle to have those new residents or new businesses pay for their own infrastructure that serves them.”
Defining a MMD
MMDs are a funding mechanism used by developers to spark commercial growth and revitalization within a city’s limits. The creation of an MMD involves the construction of water, drainage and sewage utilities to service new and existing businesses within its boundaries.
Robinson said the creation of MMD Nos. 1 and 2 in Missouri City allows both developers to construct utilities best suited for the future
mixed-use developments.
“The [management] districts are a funding mechanism to allow for the financing of the public infrastructure for the projects,” Robinson said. “These are undeveloped tracts with no utilities and roads on them, and the management districts will allow for the financing of these projects.”
Once utilities are constructed, and MMD Nos. 1 and 2 are built out, Robinson said the management districts can collect taxes and additional fees from new businesses and residents within the district to fund public projects and supplemental security. The management districts’ authority leads to the expansion of public infrastructure, such as the construction of roads and sidewalks.
Reynolds said the management districts also help expand the city’s tax base by generating additional commerce and attracting residents to the area.
Future developments
Cernus Development has plans to develop a 456-acre tract that will include mixed-use and single-family residential options in MMD No. 1, while FLC Parkway has plans to construct a 395-acre business park with residential options in MMD No. 2.
Construction on the two tracts is expected to begin later this year after the city of Missouri City approves the development agreements, Robinson said.
Due to the surge of residential development in Sienna Plantation and Riverstone, Reynolds said Lake Olympia retail options have decreased.
Despite this trend, Reynolds said MMD Nos. 1 and 2 are projected to breathe new life into the Lake Olympia community.
The Missouri City mayor pro tem, Don Smith, said the two mixed-use developments will also help spark future residential development along the Fort Bend Toll Road due to the easy access residents will have to Loop 610 and its proximity to the Texas Medical Center.
“They are going to help entice future developments, not only from a commercial standpoint but also from a residential standpoint,” Smith said. “If we can have a relationship to bring in all of the entities together for the benefit of [commercial and residential] development, I think it’s great.”
