In what Denison City Manager Robert Hanna called “the third part of a four-part play,” the board of directors of Tax Increment Reimbursement Zone No. Two on Wednesday issued a formal recommendation to the Denison City Council to approve the Schuler property final project plan, bringing the 3,000-acre development on the shores of Lake Texoma one step closer to reality.
“It started with the Council creating a TIRZ District; it was followed by the county agreeing to participate in the district; and now we come upon this third act in this saga, where (the Board) accepts and recommends the Council approve these documents,” said Hanna at the Board’s inaugural meeting at Denison City Hall. The fourth “act,” he said, will occur next Monday night, when the Council is expected to accept the Board’s recommendations — likely a foregone conclusion considering the Council and Board share a three-member overlap.
As part of the meeting, several new details emerged on the Schuler development, known as Preston Harbour. The final plan approved by the Board sketched out a rough outline of what the developer plans to build, and when he plans to build it. According to the plan, nearly 5,000 single-family homes; 1,200 condominium units; a 300-room, $54 million resort hotel; and more than 64,000 square feet of retail space are slated to be included in the project. All told, the “non-project costs” — dollars spent to build all of the above, which are not eligible for reimbursement from the city under the reimbursement zone — will total more than $4 billion.
The development is not expected to be fully completed for more than three decades, but sections of Preston Harbour will be done much sooner, said George Schuler. The hotel near Grand Pappy Marina, for instance, should be built within the first 10 years, with retail to follow a few years later.
If the projections in the report prove true, the economic impact on the city of Denison and the county at large could be massive. The final plan estimates a total increase in property taxes of $5.7 billion over the 50-year life of the reimbursement zone. The plan projects that the Denison Independent School District alone could see revenue from property taxes increase by an average of $52 million per year — a change of more than 300 percent from the district’s 2014 budget. For the city of Denison, the development could quadruple the property tax base.
Preston Harbour homes are expected to be occupied by an even mix of permanent residents and vacationers, with 53-percent in the latter category. But those on a blue-collar salary would be wise to start saving now if they hope to afford a home when the first units are available circa-2020. The plan estimates condos on the property will be worth $492,000 at that point, with single-family homes coming in with a value averaging $377,000.
Development is estimated to proceed at a pace of approximately 40 condos and 163 stand-alone dwellings each year from 2020 to 2049, at which point the developer estimates they will be worth $1.1 million and $888,000 each, respectively.
As part of the incentives the city is providing to Schuler Development, the Tax Increment Reimbursement Zone will allow the company to recoup the costs of building roads, laying pipe, and other infrastructure improvements — improvements that won’t be cheap, according to the approved plan.
The developer anticipates building more than 12 miles of roads and streets at a cost of $138 million, augmenting existing water features with four man-made lakes totaling 138-acres for $22.6 million, and laying nearly 13 miles of water mains (complete with 216 fire hydrants) at a cost of $15.7 million. In all, the final plan estimates that infrastructure improvements at the development will total in excessive of $255 million.
The tax reinvestment zone provides a mechanism whereby Schuler will be repaid those land improvement costs through a portion of the tax revenue his new property generates. Hanna said that makes the project extremely low-risk for the city.
“We’ve created an agreement that provides the developer with the incentives they said they needed and with the certainty they said they needed, all while protecting taxpayers,” he said. “The developer has already spent $7.2 million, and you don’t spend that kind of money unless you have a solid plan. For the city, it’s almost a risk-free venture.”