City leaders approved a multi-step financing plan to make dreams of a $350 million downtown Texas A&M University campus a reality for Fort Worth on Tuesday night.
“I think it’s going to bring such a huge impact to an area of downtown that we’re trying to really revitalize,” District 9 council member Elizabeth Beck said. “I think not just for downtown and District 9 but the city of Fort Worth it’s going to be a step in the right direction”
Texas A&M, which currently owns the land downtown, will enter into a ground lease with the city. The city will then develop property on the land alongside a third-party developer, divide it into condominium units, and sublease a portion of those units back to the university until its debts to the city are repaid.
The agreement allows the city to finance the capital project without a general obligation bond, which would require approval from voters before it’s issued. At the end of the lease term, when the debt is fully repaid, the condominium units owned by the city will be transferred to the university.
A&M will also have a purchase option and right of first refusal for the non-academic units owned by the third-party developer.
Under the terms of the agreement, the city will establish a local government corporation, which will have a board of directors made up of council members, to accelerate development of two buildings: the research and innovation building and the gateway conference center building. A third, the law and education building, will be designed and constructed by A&M exclusively.
Establishing a local government corporation allows the city to issue debt and fund the purchase of the condominium ownership interest for A&M’s future units. It also erases the need for a bond election, like the $560 million bond package approved by voters in 2022. City and university officials previously told the Report that Texas A&M will guarantee any bonds issued by the city for the project, meaning taxpayers won’t be impacted.
What powers does the local government corporation have?
The local government corporation may:
- Acquire and hold title to real property and interests in real property.
- Accept funds and property appropriated by the city.
- Accept donations of funds, services, and things of value.
- Issue bonds, notes, and other debt obligations as necessary for the accomplishment of the governmental purpose stated above, provided that the corporation shall not incur debt without approval by City Council
A request for proposals has been issued to find a suitable developer to lead the design, construction and financing of the buildings and an accompanying campus plaza. That developer will control the non-academic units of the buildings. The city anticipates selecting a developer by February, according to a report to council members.
The city will lease its portions of the buildings to A&M for academic and university purposes. The lease payments will cover all debt service and other pre-approved expenses associated with the development of the parts of campus used exclusively by A&M, according to the report presented to council.
Texas A&M officials anticipate the partnership will shorten the timetable on design and construction of the campus from over 10 years to five to six years. The university previously outlined its intentions to partner with several major corporations, including Alcon, AT&T and Lockheed Martin, as well as Tarleton State University, at the new campus.
The next step for the city and A&M is signing a master development agreement and ground leases, after the two entities have negotiated and agreed upon more specific lease terms. Those leases will have to be approved by the system’s Board of Regents.
Fort Worth City Council boasts two A&M alums in Beck and District 3’s Michael Crain, and both shared their personal excitement about the project.
“As a Texas A&M School of Law alum, it’s got even more excitement for me, because of my connection to the school,” Beck said.
“Gig Em’,” Crain said with a grin as the final vote was taken.
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Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at email@example.com or via Twitter.