The property, owned by Jones Road Holding Ltd., is located in an area where city officials are looking to spur mixed-use, high-density development, also known as Jersey Crossing. Each of the four council members who voted in favor of the purchase, as well as Mayor Justin Ray, expressed optimism that the city taking ownership of the property will help that development come to fruition.
Ray said city officials have had numerous meetings with local developers over the past year regarding the "CityCentre" vision for Jersey Crossing, referring to a mixed-use development at Beltway 8 and I-10 featuring high-end retail, dining and office space.
"The conversations were all positive, and it was universally agreed that our area needs and can support this type of mixed-use development," he said. "Over the last several months, negotiations with developers have been gathering momentum. Developers with means and with expertise have confirmed their desires to move forward with the shared, mixed-use vision for Jersey Crossing.”
Plans do not entail the city maintaining ownership of the land for the long term, Ray said.
"I see the city as simply holding the property and preserving it temporarily in order to transfer over to interested developer parties in the very near future," he said.
Council Member Greg Holden was the only member to vote against the measure. He said although he supports the Jersey Crossing vision, he does not believe the city should be taking it upon itself to buy the land at this point in the process.
"I think we should facilitate the process, not be the process," he said. "We do have people interested but, as far as I'm concerned, they are not far enough in the process for us to justify the purchase."
Council Member Bobby Warren said the use of city reserves will not put the city in any financial jeopardy because general fund reserves are healthy. A draft budget before the purchase was authorized projected the city would have roughly $10.2 million in general fund reserves at the end of fiscal year 2017-18.
"We will be able to continue to do all the things we need to in terms of making needed capital investments, ensuring we have police and fire services and providing all the services people expect us to provide," he said.
Plans for Jersey Crossing call for a mix of residential units, retail, restaurants, entertainment options, office space, a hotel and open green space. The city created a tax increment reinvestment zone to spur economic development in the area last year.
Ray said the tract of land represents one of the few pieces left in the city that can be used to bring the Jersey Crossing vision to life. The city is about 92 percent built out, he said.
"We are inundated with car lots, warehouses and industrial complexes," he said at the Aug. 6 meeting. "While they are valuable commercial neighbors, they leave our community lacking in the type of retail, entertainment and restaurant options that other communities, both old and new, have."
Ray said the resolution also settles an ongoing legal dispute with the landowner related to the city's zoning ordinances in the area.
The city and landowners were at an impasse for several years, with the city enforcing its zoning codes that called for mixed-use development and the landowner proposing development plans that went in a different direction. The landowner filed a lawsuit with a Harris County civil court in 2015 claiming the city's zoning ordinances represented a government taking and reduced the property value to zero.
In a settlement reached earlier this year, the city agreed to a six-month option to purchase the property for $5.2 million. Ray said the city brought on an independent appraiser who determined the city would not be overpaying for the property.
However, part of the settlement stated that, if the city did not purchase the property during the six-month option period, it agreed to abandon the zoning codes in the area and begin a rezoning process to allow for the developers' original plans. With the option period set to expire, and with the landowner refusing the city's request to extend the option period, the city had to act, Ray said.
"I don’t want to buy this property, and I wish there was another way to preserve this property," he said. "However, time is unfortunately not on the city’s side. Either we buy this property or we lose it."
Council members Gary Wubbenhorst, Andrew Mitcham and Bobby Warren, in explanations for why they supported the purchase, said they feel the city has an obligation to compete with neighboring communities and help the city continue to grow.
"All of us knocked on doors when we campaigned … Is this the will of the citizens? Absolutely," Mitcham said. "To me, it’s a dereliction of duty just to give up right now. We either do this and we continue down the path that the majority of citizens ... want to see, or we give up."
The map below roughly depicts the location of the property purchased by the city at the Aug. 6 meeting.