The $3 million debt about to be issued in support of the pending rail-supported warehouse development has one city councilman asking again for proof the project is viable.
Councilman John Hancock Jr. expressed concern during Monday night’s City Council session on the roughly $500,000 in municipal dollars already spent on the Southwest International Gateway Business Park.
More than a year in development, none of the 540-acres designated for the project have been purchased, nothing has yet to be built and no clients have been announced.
“I’m still skeptical about this project. It’s going on a year and looks like it could be another year and a half,” Hancock said, adding, “I’m skeptical that El Campo continues to spend money on a project that’s doubtful.”
While the land sale remains pending, along with any infrastructure construction, financing efforts have included the creation of a Municipal Management District via a legislative act and a Public Improvement District district via the city.
Annexation procedures, rescinded once to better align with financing, are now moving forward along with zone development.
“The CDC (City Development Corporation of El Campo) is looking forward to working closely with the city in helping this project become a reality,” CDC Executive Director Carolyn Gibson said.
The closing of the land deal is set for after the city approves annexation, rezoning and the bond levy, according to William Markwell, president of Stonemont Financial Group, one of the project developers.
Other efforts will follow.
“We will commence construction immediately after closing on land acquisition. This will include site grading, roadwork, utility work (including the extension of water and sewer utilities to SWIG) and eventually building construction,” he said in an Aug. 21 letter to council released as part of Monday’s meeting. “We have two users/tenants with whom we are negotiating lease terms.”
Markwell did not name the two corporations, but did provide a timeline.
“Assuming construction begins in early December 2019, we would expect to complete the first two buildings by end of 2020,” he said.
The concern, Hancock said, is another roughly $250,000 about to be spent by the city to issue the infrastructure bond.
Those dollars, however, will be repaid by the bond.
“The liability is not with us. The liability is with the landowner,” Mayor Pro Tem Philip Miller said.
Councilman Hancock has repeatedly asked for financials on the development companies, seeking assurance that they can leverage the $125 million needed just for Phase One.
Developers are Stonemont Financial Group, Ridgeline Property Group, Kansas City Southern and NAI Partners.
The rail park or SWIG is a 540-acre development at the intersection of County Road 421 and U.S. 59.
Only a portion of the land, about 130 acres, would be annexed this year if plans proceed.