Ever since ExxonMobil announced the development of its 385-acre campus just south of The Woodlands in Spring in 2011, the demand for warehousing and industrial facilities has grown in areas surrounding The Woodlands.

City Manager Vicky Rudy said that because Oak Ridge North is "closer to The Woodlands than parts of The Woodlands," many businesses have populated the Oak Ridge North Commerce Park and the Hanna Business Park, both of which support industrial businesses.

The parks contributed significantly to the economic success of the city in 2014, when Rudy said the city saw a 51 percent increase in sales tax revenue.

"There is no place [companies] can get [industrial facilities] in The Woodlands proper, and the price of things right around ExxonMobil is just out of sight," Rudy said. "[Businesses] want to be near The Woodlands and we are right here. It is actually a perfect storm."

ORN Economic Development Director Susan Cates said that because many ancillary businesses to the oil and gas industry use the facilities—thus increasing the property tax base and producing additional sales tax—the city has been able to lower property taxes for residents without losing revenue.

In 2014, the city generated $182,000 from the Hanna Business Park and $140,000 in sales tax revenue from the Oak Ridge North Commerce Park, Cates said. Combined the parks accounted for about 13 percent of the city's $2.44 million total sales tax revenue.

"The property tax differential has really helped our property tax base in the city, but that increase on our sales tax revenue is like icing on the cake," Cates said. "It makes us more competitive and attractive in the market because for five consecutive years we have dropped our property taxes, and one of the reasons is because our sales tax keeps going up."

Oak Ridge North aims to strategically encourage development of similar business parks within developable land to the east of the railroad tracks with the city's recent implementation of a tax increment reinvestment zone, Rudy said.

The TIRZ effect

The TIRZ is a taxing district that was created in December by the ORN City Council to attract new investment in the city and its extraterritorial jurisdiction. Rudy said that through the use of TIRZ funding mechanisms, the city could target development in key areas.

"We can get beyond a single business park to the rest of the area that is trying to redevelop right now in the same manner and bring more value to the city and the county and the region," Rudy said.

Cates said the strategic planning would diversify the city's sales tax portfolio, which has historically been tethered to businesses found along the I-45 frontage road.

"At one point all of our sales tax was tied to our I-45 frontage road [businesses]," Cates said. "Our frontage road is thriving, but fortunately we are thriving toward the back of our city too. We have something to balance us."

Business park demand

There is similar demand for warehousing and light to medium industrial facilities in other areas surrounding The Woodlands as well, said Aradio Zambrano, real estate agent with Woodlands Realty Professionals.

Zambrano has promoted the development of office condominiums throughout the area, but said he has turned his attention to the development of office parks in areas near The Woodlands to capitalize on the growing demand.

"You can't build anything inside of The Woodlands, so we are trying to get investors to buy property and start building warehouse parks in the surrounding arteries like FM 1488, FM 2978 and FM 2920," Zambrano said. "I saw the need for office condominiums, and I am actively seeking to develop between four and eight different properties over the next two years."

Zambrano said he believes the demand was fueled by the announcement of the ExxonMobil campus, which he said also created demand from ancillary businesses operating in The Woodlands area.

"If ExxonMobil, one of the biggest corporations in the world, wants to set up shop in The Woodlands [area], then there must be something good about it," Zambrano said. "That is prompting companies from all over the world to follow suit. Then you have all of the little sucker fish coming behind, which are all of the small supporting companies."

High demand at the Hanna Business Park, which features retail, office and warehouse space, has led to the construction of new buildings, said Katheryn Roberts, real estate agent with Greater Houston Commercial Real Estate.

"There has been a pretty large demand," Roberts said. "Not just for oil and gas but for a variety of industries."

The park features four buildings with 16,000 square feet of space, along with two stand-alone buildings. The park is developing Phase 2 at the same location, and has also cleared space for build-to-suit use at a new location on Robinson Road, directly across the Oak Ridge North Commerce Park, Roberts said.