“The discussions we've had thus far are to have council provide the direction as to what they would like to see for minimum standards to have consistency of application of the incentives across this area,” said Joe Esch, Missouri City director of economic development.
The city’s incentive program is a financial bonus private developers can apply for and use to enhance the aesthetics of a property and satisfy the city’s longstanding goals of revitalizing Texas Parkway, Esch said.
“This and former councils have had the goal of taking a number of the larger properties, which were built decades ago, and redeveloping those centers,” Esch said.
However, he said there are obstacles to economic development on this major city corridor.
“It comes down to an economic question of, 'How much does it cost to redevelop it? What do the rates command? And how does that work out for return on investment to warrant the redevelopment?'" Esch said.
The costs to develop along Texas Parkway and Hwy. 6 in Missouri City are essentially the same, Esch said. The difference, he said, is the rental rates.
Rental rates on Texas Parkway range from $9-$13 per square foot, Esch said, whereas on Hwy. 6, they can range from $28-$32 per square foot. Multiple factors contribute to this difference, including exposure to traffic, growth in housing and the footprints of some of the available spaces, Esch said.
Esch said because Missouri City does not own any property along Texas Parkway, the city relies on private owners who want to develop or redevelop. To promote this process, Missouri City is utilizing incentives.
“The incentives that are in place recognize that there may be a difference between what the private sector can justify based off of the economics and what the projects cost so the city can accomplish its objectives,” Esch said.
To further meet this goal, Council Member Anthony Maroulis said that, among other qualities, he is looking for the next city manager to have a strong background in economic development.
“The next city manager has to be good at economic development,” Maroulis said. “[Missouri City is] unique: We're a bedroom community, but we have a lot of opportunity to leverage the commercial side.”
Because Missouri City does not have 4A or 4B economic development corporation, which use sales tax, like neighboring Sugar Land does, some of the budget for incentives comes from the city’s tax increment reinvestment zones.
“We're not a part of the 4A/4B,” Maroulis said. “So, how do you get creative and leverage what we currently have to bring in large corporations to bring in new technology?”
Despite the challenges, Esch said development and redevelopment projects are happening along Texas Parkway. These include the HCC campus, which Esch said is the largest single investment on Texas Parkway in decades, and other private developments.
“Good things are happening, and more good things are to come,” Esch said.