Despite recent concern about Epicenter League City, a $450 million project touted as a major development opportunity, the firm behind it insist it’s moving forward, just a little differently than initially laid out.
But the reassurance is doing little to stem rising concern among several members of city council, some who question the development firm’s ability to raise capital and at least one who argues the project should be put out for bids.
Representatives for Epicenter of League City LLC, the development firm, announced work would soon begin on a Gilley’s Hotel and Convention Center complex, near the original Epicenter site. But some members of the city council argue city officials should, instead, consider all their options moving forward.
And the newest project bears striking resemblance to one envisioned for La Porte, which fell through when city leaders there declined to contribute financially to the venture.
“I think that the project has great potential,” Councilman Nick Long said. “I’m not saying that they can’t do it, but I think we need to find someone that has the capital and experience necessary to make this a success, and not go in with some sort of half-baked plan.”
The city council in October signed a pre-development agreement with Epicenter of League City LLC for a project that could one day bring four hotels, a convention center, arenas for a hockey and a baseball team, restaurants, shops and other businesses to land near Interstate 45 and state Highway 96, saying at the time it hoped to have a final agreement by the end of January.
But months have passed and the original pre-development agreement has lapsed. That doesn’t mean the development firm isn’t advancing on the project, however, said Linda Merritt, spokeswoman for Epicenter of League City LLC.
“We are actually in development on Epicenter Phase 1,” Merritt said. “That’s the 16 acres at Link Road and Calder Road, and that’s in the final stages of having an agreement. Then we are having separate discussions on Phase 2, which is the larger plot of land. And those conversations will continue, but separate from Phase 1.”
The group plans to use development on the 16-acre tract to drum up interest among investors about the larger plot of land, Merritt said.
TOO LITTLE, TOO LATE?
The shift is too late for some members of council, however. And others are homing in on the developers’ background in similar projects.
As part of the agreement, the city would give the developers 50 acres of land that the Chester L. Davis Sportsplex currently sits on, once crews constructed a new sports facility for the city on the west side of League City. Mayor Pat Hallisey has estimated the land is valued at about $50 million.
“Show me, don’t tell me,” Councilman Andy Mann said. “I thought by now the Sportsplex would be moved and we’d be tearing up the joint like TxDOT on 45. To my knowledge, the shovels of dirt moved thus far is zero.”
Epicenter of League City LLC, the group the council reached a pre-development agreement with, is a newly formed company, but the company behind it, Western Spherical Developers LLC, is a Friendswood company that formed in 2016, according to records from the Texas Secretary of State’s office.
But the principal of the firm, David Miles, has spent more than 30 years in the commercial and mixed-use development business, according to his resume. Before starting Western Spherical, Miles spent 22 years with the Card Group, working on several major projects, including a 150-acre mixed-use development in Lufkin called the Garden District.
Yet, after the announcement that crews would soon start work on the Gilley’s project, Long and other council members were concerned about Miles’ previous failed effort to bring a Gilley’s concept to La Porte.
“As far as I can tell, it’s nearly identical to what didn’t work in La Porte,” Long said. “That’s the part that has really given me pause. My thought is, I don’t think this should go anywhere until we are 100 percent sure they have the capital and expertise necessary to make this happen, and I’m not convinced they do yet.”
NEARING A DEAL
Gilley’s is the famous Pasadena honky-tonk founded in 1971 by country singer Mickey Gilley. The bar served as a central location in the 1980 movie “Urban Cowboy.”
Developers are in final development agreement negotiations to start work on the Gilley’s Hotel and Convention Center complex, Merritt said. The development would re-purpose an existing building on a 16-acre site at the intersection of Link and Calder roads to create an entertainment center reminiscent of the original Gilley’s Club in Pasadena, but more family friendly, they said.
Developers are still working out many of the final details of the project, and don’t yet have an estimate of the cost, Merritt said.
The plan is to open the center in the first quarter of 2020, Merritt said.
LA PORTE PLAN
But Western Spherical Developers in 2016 had announced similar plans for a Gilley’s Family Entertainment Center in La Porte’s 96-acre town center. The development was to have featured a 125-room full service resort-style hotel, spa and conference center.
Those plans were canceled in 2018. Developers shifted plans from La Porte to League City because the opportunity and location near Interstate 45 make it a better location, Merritt said.
But La Porte City Manager Corby Alexander gives a different reason for the change — a lack of funding.
“The whole community was disappointed,” Alexander said. “I think David Miles is an exceptional guy, he just had a lot not go his way. Unfortunately, this sort of development doesn’t happen without deep pockets. It’s not for lack of vision, just a lack of money that it went this way.”
Merritt conceded that shifting the project from La Porte to League City came down to a multitude of factors, boiling down to opportunity and timing, she said.
The city of La Porte offered few incentives, which investors look for, and the developers had an investor lined up that turned out not to be a good source, while at the same time League City started expressing interest, Merritt said.
“La Porte had great people there, there was nothing about that, it was just the total financial package and opportunities were a little more challenging there,” Merritt said.
The city of La Porte was particularly disinclined to offer financial incentives, Alexander said.
Before the League City council approved the pre-development agreement, the city in May 2018 hired Washington D.C.-based Brailsford & Dunlavey for an initial $49,600 to study the feasibility of the project, city spokeswoman Sarah Greer Osborne said.
That study confirmed the feasibility of such a project in League City, but said little about the developers themselves, according to the documents released to the public.
“A project including some or all of the elements outlined by the private development partner was deemed viable due to League City’s favorable demographics and a lack of competitive development in the area,” according to the report.
That remains true, both about the city and the piece of property, Long said.
“It’s a good idea,” he said. “But I don’t know if these are the guys to pull it off.”
SEEK A BID
Instead, the city should consider sketching out exactly what it wants and putting it out to bid to give other developers the chance to get in on the project, Long said.
“I don’t know why it has to be them just because they were the first in the door,” Long said. “I’d rather see us slow down and do robust due diligence.”
As initially envisioned, the developer would fund the design and construction of a new, larger sportsplex for the city on the growing western side of town on about 100 acres near the Bay Colony subdivision, replacing the Chester L. Davis Sportsplex, 1251 state Highway 96.
Once the sportsplex was moved, crews could begin work on the $450 million development.
The cost of doing that, however, is about $35 million, a major stumbling block for any group looking to make money, Hallisey said.
But Hallisey, who has previously been somewhat critical of the project’s progress, this week took more of a moderate position moving forward.
“The truth is, developers are a dime a dozen, but we’ve gotten in and done a pre-development agreement with this group,” he said. “They had the right ideas, and we still think they have the right ideas. An entertainment venue like Gilley’s would be nothing but sales tax revenue.”
The city has not offered the developers any financial incentives and remains determined not to contribute anything more than the 50 acres the sportsplex sits on once it’s moved, Hallisey said.
Rather, city officials are hopeful House Bill 2445 will provide some benefits for the project. The bill allows League City to pledge the state’s share of hotel occupancy taxes collected in the city to pay for tourism-related improvements, such as a convention center, entertainment-related convention center facilities or hotel infrastructure.
The news that Gilley’s might soon rise is great as it shows the developers are making progress, but city leaders are ultimately most interested in the convention center, Hallisey said.