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Bill would help Richmond fund hotel, convention center

December 31, 2018

A state representative for Fort Bend County has introduced a bill in the upcoming session of the Texas Legislature that would allow the city of Richmond to capture sales, hotel and mixed-beverage tax revenue to fund a hotel/convention center.

District 85 State Rep. Phil Stephenson, R-Wharton, introduced House Bill 486 on Dec. 7.

Fort Bend County Commissioners Court adopted a Dec. 4 resolution to support the city’s pursuit of “proposed legislation enabling development of a hotel and convention center project.”

“It’s good usage of the hotel occupancy tax for economic development in central Fort Bend County,” said Matt Minor, chief of staff for Stephenson. “It would build basically a hotel/convention center smack dab in the middle of Fort Bend County. It has the potential to have a good positive economic impact on the Richmond/Rosenberg area.”

Minor said he and Stephenson worked with Cameron Goodman, executive director of the Development Corporation of Richmond.

March minutes of the development corporation board refer to approving “economic development incentives, including using public funds to attract and retain high quality, full-time and high-paying primary jobs. Also to attract and retain commercial tax base, including property tax, sales tax and hotel occupancy tax.”

Terri Vela, city administrator, City of Richmond, said, “The legislation is not designated for one specific location or project, which gives Richmond the flexibility to pursue a developer and location that best fits the needs of our community,” she said. She added there are no figures attached to the number of hotel rooms or the size of the conference center at this time. The proposed legislation would require Richmond to sign an agreement with a developer to construct a hotel and convention center project by Sept. 1, 2021.

One possible site is Circle Oak, which is owned by The George Foundation and is within the city of Richmond’s extraterritorial jurisdiction at Interstate 69 and FM 762.

The foundation has worked with the city on aspects of the project, which Roger Adamson, CEO, The George Foundation, described as “asset management” of the real estate.

“A Municipal Utility District (MUD 207) has been created within the boundaries of the property and The George Foundation has also entered into a Strategic Partnership Agreement and a Development Zone Agreement with the City of Richmond to help facilitate high-quality development at some point in the future on the property. The George Foundation will not develop the property, but these steps help enhance the value of our property when the time is right to engage a third-party developer,” said Adamson.

He said the proposed legislation could be another tool to help facilitate development at Circle Oak through state-funded incentives.

Vela said, “The legislation would allow Richmond to receive the same benefits afforded to 37 other Texas cities, including several in the Houston area.”

House Bill 2445, effective in June 2017, relates to the imposition of the hotel occupancy tax by certain cities and counties. Those cities include Sugar Land, Katy, League City and Kemah.

“This legislation would allow the city of Richmond to capture qualified state taxes within a 1,000-foot radius of a hotel and convention center project for a period of 10 years,” explained Vela. “These captured revenues would be used to help pay for infrastructure costs associated with the development.”

The Dec. 17 Richmond City Commission agenda included review and action on a resolution to support HB 486 “as a tool for utilizing state taxes to encourage higher use development in the city’s extraterritorial jurisdiction.”

In part, HB 486 reads, “A municipality that is the county seat of a county that has a population of at least 585,000 and is adjacent to a county with a population of 4 million or more, except that the municipality may also pledge revenue derived from the tax imposed under this chapter from a hotel project that is owned by or located on land owned by a nonprofit corporation or eleemosynary foundation acting on behalf of or in concert with the municipality.”

The bill would become effective after two-thirds of all the members of each house vote for it. If it does not receive the votes necessary for immediate effect, it would become effective Sept. 1, 2019, according to the bill.

Vela refers to forecasts of continued strong growth in Fort Bend County with a predicted 2.1 million residents by 2050.

“Richmond which serves as the county seat of Fort Bend County is positioned at the center of this path of growth,” said Vela. “This fast rate of growth and a current lack of available meeting and event space within Richmond and the central Fort Bend area has helped to generate a healthy demand for this type of project. Additionally, tourism is seen as an important economic development strategy. New visitors to the city would help support local businesses with dollars brought in from outside the local economy and employment from the hotel and convention center would provide quality job options for local residents.”

karen.zurawski@chron.com

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