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Distribution centers planned for Katy area

December 22, 2018

The anticipated development of a distribution center by Costco Wholesale Corp. on 150 acres between Interstate 10 and Highway 90 represents an expanding tax base for the city of Katy.

In a Dec. 17 news release, the real estate firm Hines whose land partner is Katy Partners Ltd., announced the sale of property to an undisclosed user. The user will develop and own a large-format distribution center serving Katy and the surrounding area, which will bring more activity and jobs to Katy and the I-10 corridor, according to the news release.

In a Dec. 20 email, Mark Clegg, of Hines Corporate Communications, said, “Contractually, the buyer is remaining anonymous.”

Katy Partners Ltd. filed a Nov. 26 petition with the city of Katy to annex 150 acres in Waller County between distribution centers for Igloo and Amazon. William R. Sudela of Crady Jewett McCulley & Houren LLP wrote a Nov. 21 letter to the Katy city planner regarding “Proposed platting, annexation and M industrial zoning for Costco Depot Highway 90.”

A Dec. 6 special warranty deed shows Katy Partners Ltd selling the parcel to Costco Wholesale Corp. of Issaquah, Wash.

“The Katy area continues to see an influx of distribution center projects,” said Lance LaCour, president/CEO of the Katy Area Economic Development Council. “This can be attributed to the availability of buildable land with access to the greater Houston region through our strong transportation infrastructure, and particularly to access to Grand Parkway and Port of Houston. We are particularly well-positioned and suited for companies seeking regional distribution opportunities with excellent access to the Grand Parkway and I-10 to San Antonio, Austin and beyond.”

In the Dec. 17 news release, Hines Managing Director Charlie Meyer said, “In the midst of our planning effort for our Pintail Crossing development, we were approached by a user/owner whose interest was to own, rather than to lease the property. We at Hines, together with our land owner and partner, elected to move forward with the sale of the entire property rather than the planned phased development. This is a win for everyone involved including Hines, our land partner, the new owner, as well as the city of Katy.”

Clay Development & Construction also announced plans to develop a 621,920-square-foot distribution center on about 30 acres west of Katy in the 106.6-acre Pederson Distribution Park.

Charlie Christ of Clay Development & Construction said, “We have been in this market since 2008 when we purchased a 49-acre site for Stonegate business park.” They next purchased another 140 acres for the Weatherford facility on Hwy 90 in 2013. They then purchased land for Pederson Distribution Park.

The company is building the center on speculation, but Christ said it’s a good location because of easy access to San Antonio and Austin. “The area serves a population of 16 million within a 200-mile radius. Retailers and distributors are looking for locations in the area to capitalize on the 12-percent population growth since 2010,” he said. “We are meeting that demand with state-of-the-art distribution space in a high-visibility, highly accessible location. In the last 10 years, the average size of new buildings here has been 840,000 square feet. The higher quality employee base in the area has also attracted the larger companies.”

LaCour said, “Distribution centers offer a variety of jobs ranging from warehouse and fulfillment work to management level positions which can meet the needs of the diverse workforce in the Katy area and surrounding communities.

“According to JobsEQ, a workforce research firm, there are approximately 138,000 people employed in wholesale trade and transportation and material moving occupations in the Katy area with an average annual wage of $76,000,” added LaCour.

In the introduction to the 2018-19 budget, then director of finance Becky Wilkins wrote in part that the addition of Buc-ees, Amazon, Pepperl-Fuchs, Bel Furniture, West Ten Business Park and CVS have increased the city’s commercial tax base.

The commercial property in the city of Katy had a real property value of $479,065,396 in fiscal year 2010. In fiscal year 2017, that number had increased to $1,223,851,006, according to the Sept. 30, 2017, city of Katy Comprehensive Annual Financial Report. Officials announced in early 2017 Amazon’s plans for a 1 million-square-foot distribution center west of Katy that eventually would provide 1,000 jobs. In February, Amazon announced it was looking to fill 400 full-time positions at its center.

Sales-tax revenue also has increased due to development that includes Amazon, wrote Wilkins in the 2018-19 budget. Information in the budget document shows sales tax for 2016-17 at $7.5 million. By 2018-19, that number increases to $10 million.

LaCour said, “Looking ahead, we expect to see continued growth in this industry sector as companies see the excellent opportunities the Katy area offers for such projects.”

karen.zurawski@chron.com

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