Work Session Notes - March 3, 2025
It's hard to say that I'd rather stay awake when I'm asleep
It was a honor to act in Good Samaritans 5th Annual Murder Mystery Dinner last Saturday. The event raised a ton of money for such a worth cause. It was really hard work to learn all the lines, but it was very rewarding to perform alongside such talented and dedicated cast members.
I hadn’t been in a play since I was Ben Franklin in my 8th grade play. Jump to 13:30 for some great acting chops.
Now on to the Work Session notes for this week. The main topic will be the Development Agreement regarding 519 State Street. I encourage everyone to come and provide their input during the public comments time before our meeting and stay to listen to the discussion.
As always, my comments are in bold italics.
PUBLIC COMMENTS ON WORK SESSION ITEMS
CONSIDER THE CONSENT AGENDA
WRITTEN BRIEFINGS
Council may ask for discussion, further information, or give direction to staff on an item posted as a written briefing.
Agreement for Real Property Contract of Sale Between The Owl Icehouse Garland LLC and the City of Garland Regarding Property Located at 519 State Street in the Downtown Historic Sub-district.
Council is requested to consider the approval of a Development Agreement and Real Property Contract of Sale between The Owl Icehouse Garland LLC and the City of Garland regarding property located at 519 State Street in the Downtown Historic Sub-district. Unless otherwise directed by Council, this item will be scheduled for formal consideration at the March 4, 2025 Regular Meeting.
I am disappointed that this item was originally scheduled as a written briefing rather than a “full-scale” verbal briefing. However, with the amount of discussion that has occurred online and in person, this item will be thoroughly discussed.
For me, this all comes down to one issue:
What do we want the future of economic development in Garland to look like?
Let’s start with a bit of history.
In the beginning, there was the Square. Then happened a fire on Thanksgiving Day 1899. Soon the Square was rebuilt with brick buildings, and the Jones Hardware Store was born. Fast forward to the 2020s and the Jones Hardware Store, though a pillar of commerce in Garland throughout the first half of the 20th Century, was abandoned by the Jones Family owners and remained empty for 40 years.
In October of 2023, the City Council voted to purchase the property, appraised at only $740,000, from the Jones Family for $1.95 million dollars. You can read my write up from the time here. The vote went 6-3, with Mayor Scott LeMay, and council members Jeff Bass, Ed Moore, Deborah Morris, Margret Lucht, and Chris Ott in favor, and council members Carissa Dutton, BJ Williams, and myself opposed.
With the pending grand opening of the newly renovated Downtown Square later that month, some members of council believed there was a rush to purchase the property and have the storefront boarded to improve the look of the Square for the grand opening.
In the year and a half since, the City of Garland put out a request for qualifications to developers inviting them to provide ideas to renovate and develop the property. The 519 State Street site was one of five downtown properties included in the RFQ. In the end, we received ZERO responses.
Garland’s Cultural Arts Director Amy Rosenthal, through her former career as Director of McKinney Performing Arts Center and McKinney Main Street, got to know Don Day, real estate developer and former McKinney council member. Seeing 519 State Street as an opportunity for Day to redevelop the property, as he has done for over 30 sites in McKinney, Dennison, Fredericksburg, and New Orleans, Rosenthal connected Day with city staff.
That takes us to the Executive Session from two weeks ago.
Day and his team, which included Mike and Rae Luther—operators of several restaurants in North Texas—presented their thoughts on renovating and operating the former Jones Hardware building as an icehouse concept, however not many details of the agreement were provided. In our Tuesday agenda, the project shall be “a family-oriented restaurant, with appeal to young families, and features affordable food with burgers, and Texas County cooking all made onsite.”
(Exterior Rendering of the future Owl Ice House)
Then last Thursday, the details of the development and details of the property sale were released in the City Council Work Session agenda as a written briefing. This was the first time I or the public were able to see specific details of each agreement.
The sale agreement states that the owners will purchase the property for $740,000—well under half of the market value the city paid, but equal to the 18-month old appraisal value from October of 2023.
The development agreement states that the developer intends to invest $2,500,000 in real property improvements and $600,000 in furniture, fixtures and equipment. The City will then make rebate payments to the developer not to exceed $740,000 which was the appraisal price of the property when it was purchased by the City in 2023 for $1.95 million. The first payment of $370,000 will be paid as the Developer incurs costs of completing renovation work and a second payment of $370,000 will be paid once the business is operational for 30 consecutive business days.
By comparison, the development agreement is similar to the agreement reached with Fortunate Son on the renovation of its property at 500 Main Street. However, with Fortunate Son, the developer Thomas deNolf was asked to present his vision at a Work Session meeting January 31, 2022, with a lease agreement for the public ROW which is now the outdoor patio being approved by Council March 1, 2022. The development agreement was later approved by Council April 4, 2023.
However, the big difference is that the City of Garland never owned 500 Main Street. It remained in private hands the entire time with the developer asking for a grant of $500,000 towards the renovation hard costs upon submission of the receipts. That development agreement did include a “Rebate Tracking Sheet Table” with line items detailing items to be built or replaced and construction costs. Notably there were no speakers on these items at the time.
So that takes me back to my original question.
What do we want the future of economic development in Garland to look like?
The answer to that question brings up many more questions.
Do we want the City of Garland playing developer by making land purchases, often at extremely overpriced values to justify some future return on investment? These are risks that private developers are not willing to take as evidenced by the Jones Building sitting vacant for 30 years. Should the city only make economic incentives through development agreements such as the one for Fortunate Son and not buy land outright?
Is the City supposed to serve as a market maker for new development even if it means possibly damaging surrounding businesses? Will this project take business away from existing restaurants on the Square? Or instead of dividing up the pie into smaller pieces, will it make the pie bigger by bringing even more people to Downtown?
What should be the expected payback period for the City to recoup it’s investment in properties such as this? Is that even the right metric to use?
Will parking be an issue? Chapter 7, Section 12 of the Garland Development Code that regulates the Downtown district states:
The construction of any new building or the expansion of the gross leasable square footage of an existing building requires parking for that additional square footage in accordance with other provisions in this GDC.
This means that the Developer of 519 State Street is only required to add parking if they add square footage to the 9,592 existing square feet of the building per Dallas Central Appraisal District.
All of this will lead to an interesting discussion at tomorrow’s council meeting. As you recall, I was against the purchase of the property from the beginning for such an outrageous price, partly in fear that something like this may happen. As it stands, it will be hard for me to support such a lopsided deal.
In the end, I just hope we don’t end up with another Don Day donkey statue in Downtown. Maybe that can be written into the Development Agreement.
VERBAL BRIEFINGS
Council may ask for discussion, further information, or give direction to staff on an item posted as a verbal briefing.
Discuss Updates on the City-Initiated Rezoning Effort for South Garland
Staff will provide updates to Council on the city-initiated rezoning effort for South Garland to encourage revitalization and urban mixed-use developments in the area.
With this item, we will discuss zoning around the Shiloh Road/IH-635 area. Garland has made many strategic purchases of property around this area with the hopes of having it develop into an economic driver for the city. To guide that future development, we will discuss the rezoning that area in to a Planned Development district with specific guidelines regulating the development.
Although I have not yet seen the intended zoning regulations, I imagine that it will allow for a variety of uses with a focus on adding density to the area through the use of mixed-use developments. I would hope that the zoning is centered around a major development anchor that will attract Garland residents and visitors with hotel, retail, residential and restaurant uses surrounding the core area.
School Street Alley Petition Project
Staff will brief Council on the School Street Alley Petition Project process. Unless otherwise directed by Council, the Determination of Necessity item will be scheduled for formal consideration at the March 4, 2025 Regular Meeting and a Public Hearing for Levying of Assessments will be scheduled at the March 18, 2025 Regular Meeting for the School Street Alley Petition Project.
This is the first time I have seen this type of item come up on council during my six years serving. We have three property owners who have petitioned and agreed to pay for a portion of paving their unimproved alley serving their house. As a result, the City will design and construct the alley, paying 67% of the cost with the property owners paying the remaining 33%.
Public Safety Committee Report
Councilmember Carissa Dutton, Chair of the Public Safety Committee, and staff will provide a committee report on the following items: School Traffic in Neighborhoods, Traffic Near Community Gathering Centers, and Public Safety Trends on Forest Lane. School Traffic Neighborhoods was referred by Deputy Mayor Pro Tem Lucht and seconded by Councilmember Dutton at the September 26, 2024 Work Session. Traffic Near Community Gathering Centers was referred by Councilmember Dutton and seconded by Deputy Mayor Pro Tem Lucht at the October 7, 2024 Work Session. Public Safety Trends on Forest Lane was referred by Councilmember Dutton and seconded by Councilmember Hedrick on February 12, 2025.
Council member Dutton will report on three items that the Public Safety Committee has considered recently. School traffic is a constant concern, especially during drop off and pick up. It is a constant complaint that council members receive.
It is especially hard considering the jurisdictional concerns. GISD operates the school facility, but the City of Garland is responsible for the roadways around it. The neighborhood schools, especially the older ones, were not designed to handle the traffic stemming from parents lining up, sometimes hours ahead of school release time, to pick up their kids. The lines often spill out into the neighborhood streets and block residents from getting in and out of their homes. I am interested to hear if there are any new revelations from the Public Safety Committee’s discussion.
CONSIDER APPOINTMENTS TO BOARDS AND COMMISSIONS
Terms are usually staggered whereby at least half of the membership has previous experience. Members are appointed based on qualifications.
Councilmember B.J. Williams
Jordan Cotton -TIF #2 South Board
ANNOUNCE FUTURE AGENDA ITEMS
A Councilmember, with a second by another member or the Mayor alone, may ask that an item be placed on a future agenda of the City Council or of a committee of the City Council. No substantive discussion of that item will take place at this time.
EXECUTIVE SESSION
Deliberate or discuss:
The City Council will adjourn into executive session pursuant to sections 551.071 and 551.087 of the Texas Government Code to deliberate and discuss the following:
1. A potential offer by the City of financial and other incentives to a business prospect and the receipt of commercial or financial information that the City has received from that same business prospect, which the City seeks to have locate within the City in the area of I-H 635 and Shiloh Road, and with which the City is conducting economic development negotiations (551.087); and attorney/client communications related to the same (551.071).
2. A potential offer by the City of financial and other incentives to a business prospect and the receipt of commercial or financial information that the City has received from that same business prospect, which the City seeks to have locate within the City in the area of President George Bush Turnpike and Brand Road, and with which the City is conducting economic development negotiations (551.087); and attorney/client communications related to the same (551.071).
With the future development named the Owl Ice House, here is Owl City with “Fireflies” from 2009. This band sounds so much like the Postal Service that it is uncanny.
Compare and see if you can tell them apart: