Sugar Land’s much-anticipated Imperial Sugar redevelopment project has been delayed, and may change significantly because some key acreage was found to be owned by Union Pacific Railroad instead of Imperial.
Cherokee Investment Partners of Raleigh, N.C. has been working on a 2-year-old deal in which it has emerged as master developer in a joint venture with the Texas General Land Office, which controls what’s known as Tract 3, 525 acres northwest of Imperial Sugar’s property.
Cherokee also has Imperial’s historic 220-acre property under contract – including an old sugar refinery and char house along U.S. 90A. That portion of the project was to have included a major access point, as University Boulevard was expected to cross the highway and enter the project to provide traffic relief.
However, it now appears University Boulevard won’t extend into the redevelopment project after all.
Officials with the Texas General Land Office and the City of Sugar Land said Thursday that Imperial Sugar Co. had believed it owned a piece of property transversing several long-unused rail lines. However, in conducting due diligence prior to the proposed real estate sale to Cherokee, Imperial learned that the property is actually owned by the railroad.
Officials with Imperial Sugar and with Cherokee weren’t available for comment Thursday morning. But Sugar Land City Manager Allen Bogard said as a result of Imperial’s due diligence, the contract between Imperial and Cherokee has been modified to exclude the land including the rail lines. That land would have provided a key access point to U.S. 90A.
“The project is not moving forward for right now,” said General Land Office Portfolio Manager Scott Carter. “I don’t know what all the total problems and changes are. There’s a number of unanswered items regarding the development.”
But Scott said he’d heard that Cherokee found more of the project’s acreage lies within the Oyster Creek flood plain than the developer had originally hoped.
“They are having to reserve a significant amount of the land for the flood plan of Oyster Creek, and for wetlands,” Bogard said, adding that the most recent development maps he’s seen show “as much as a third of the land is either creek or water features or lakes or…flood mitigation.”
Yet, he indicated Cherokee should have been aware that much of Tract 3 lies within the floodplain, because other developers who’ve looked at the property over the years have expressed “a feeling that there was more flood plain” than the General Land Office has suggested.
While including so-called “green space” in the project has been a goal of the city, Bogard acknowledged that by being forced to set aside more land to mitigate flooding potential, Cherokee may feel pressure to replace the investment value of that land, through higher-density housing.
Therein lies the rub. Higher-density housing could logically create more traffic, and the need for increased access to major highways. But a potential major access point no longer is available because Union Pacific owns the land.
“The devil’s always in the details,” Bogard said.
Both he and Carter say they don’t believe the new challenges will stop the project. But they admitted the pace of the development has slowed.
As originally envisioned, the Imperial redevelopment project would include about 100 acres of commercial development, much of it running along State Highway 6, which bounds the project area on its west side, from U.S. 90A North to Kempner High School. The bulk of the development has been planned as residential housing. Oyster Creek zig-zags through the center of the property.
Imperial and Cherokee officials both had said last year that they hoped the sale of the historic property would occur by the end of 2006. And Kyndel Bennett, Cherokee’s Austin-based vice president, had said last May that ground could break on the project by early 2007, and that a final development plan could be finished within a month.
On Thursday, Bogard said he now expects Cherokee to finish that plan by April. Still, “I did not get the impression there is a hold-up,” he added, noting that Cherokee has planned to meet with neighborhood residents about the project in two weeks.
