Hurricane Harvey is not finished wreaking havoc upon Kingwood. Effects from the most destructive hurricane to ever hit Houston, which flooded more than 3,000 area homes in August, has sidelined the most impactful transportation project ever imagined for Kingwood.
Board members of the Lake Houston Redevelopment Authority/Tax Reinvestment Zone 10 (TIRZ) felt a big blow from Harvey when they were told the Northpark expansion project will be delayed as long as two years or more due to decreased property values.
The Authority receives funding from increments on the value of homes and businesses within the zone. Harvey decimated homes and businesses from the San Jacinto River several miles north to Kingwood Drive.
“Harvey is the problem,” chair Stan Sarman said. The Harris County Appraisal District will not have certified property appraisals out until August or September. The values in Kingwood, and all over Houston, will be much lower than the previous pre-Harvey years.
The Authority has been working for more than two years on the Northpark expansion project, the top mobility improvement project designated by the Kingwood mobility study, completed in 2016. Plans have been carefully made, every contingency estimated, consultants hired for bond financing, engineering, environmental impact, liasioning with federal, state and county transportation entities, lawyers brought on that specialize in obtaining right of way, and meeting upon meeting upon meeting held.
The City of Houston agreed to transfer $15 million in capital improvement funds from a Kingwood Drive project to the Northpark project but the balance of the initial Phase One, $40-50 million, was to come from bonds.
Last month, Ralph Deleon, the Authority manager, shared that the City of Houston had pulled back from original agreements to allow for the Authority to increase revenue through taking in more home and commercial areas into the zone, and to extend the life of the Authority for several decades, giving it an extended “life” which equals time enough to pay back the bond money. This was unsettling news, at best. [ourtribune.com/headlines/changes-by-city-may-frustrate-board.html]
But at the Jan. 11 meeting, Deleon lowered the boom by announcing the city had figured new financials with no new area to be annexed and with a termination date of 2048.
The real crush, however, was when the loss of value, due to Harvey, was calculated.
Deleon explained the city used the 2017 pre-Harvey values, discounted them by 30 percent and figured five years for rebuilding back to the values before Harvey.
“We just can’t do the project. There is not enough money, or debt capacity,” Deleon said.
Sarman explained that a meeting between the city and the Authority will be held in a week or two. At that time, options will be discussed.
Deleon added that by 2018, when the Authority has paid off a significant amount toward the developer agreements it has, the financials should be much clearer and the debt capacity deep enough to obtain bond funding.
Board members seemed stunned and blinked for several moments as the news sunk in.
Deleon said there will still be money in the budget for other, small mobility improvements. Tim Austin, the Authority attorney, said that usually the numbers overperform and the situation improves faster than anticipated.
It was still a forceful wind that took the project and tossed it aside. Even the most cautious and careful planning could not have foreseen the collateral damage caused by the costliest tropical cyclone on record, which inflicted approximately $125 billion in damage, primarily from widespread flooding in the Houston metropolitan area.
The board meets next Feb. 8 at the Kingwood Community Center at 8 a.m.