TIRZ Board Discusses Additional Financing for Northpark Expansion

11/15/24 – The Lake Houston Redevelopment Authority/TIRZ 10 Board met yesterday to discuss Northpark expansion, including:

The progress of the project, designed to create the first all-weather evacuation route from Kingwood
Railroad crossing signal work by Union Pacific
Scope changes for Phase 2
Debt capacity and cash flow
Another $48 million in short- and long-term financing.

Two Meetings in One

On a somewhat funny note, the board covered the first half of the agenda while standing in front of a locked Kingwood Community Center.

*Lake Houston Redevelopment Authority/TIRZ 10 Board Meeting began outside at 8 AM in blinding sunlight.*

After the keymaster finally arrived…

*The meeting concluded indoors, much to the relief of everyone’s dermatologists.*

Here is the agenda. And here is a link to the 342-page board packet (warning 27.5 mb download).

Upcoming Railroad Signal Work Influencing Construction Focus for Next Month

The UnionPacific (UP) Railroad will start installing new crossing signals in the area beginning in January. Their crew will start at Knox Road north of Northpark and work their way south. The exact date for Northpark is unknown because it’s not clear how long the Knox intersection will take.

As trains come down the tracks, they communicate sequentially with signals. All signals must communicate with each other as well as trains. So, it’s a big job. UP has only one crew to handle this type of work in 26 states.

They want to come here once and handle Knox and Northpark at the same time. If they can’t, it could delay Northpark construction for an undetermined amount of time.

So contractors for the TIRZ and utilities are putting on a full-court press to prep work near the railroad. They are racing to finish:

Soil tests and environmental approvals
Boring under both Northpark and Loop 494
Relocation of water mains and other utilities such as gas, electric and telecommunications
Drainage
Dirt work for all surface lanes both north and south of where the bridge will eventually go.

Change Orders for Phase 2

The board also approved two change orders for Phase 2 – the portion of the project that stretches from about a 1000 feet east of Russell Palmer Road to just past Woodland Hills Drive.

The first change order had to do with an expansion of scope to accommodate new TXDoT requirements for sound, air quality, environmental, and archaeological studies.

A second change order dealt with evaluating additional detention pond sites and updating the drainage report for submittal to TXDoT.

The project team is currently planning to build a 90-acre-foot detention basin to reduce flooding on Ben’s Branch downstream from Northpark Drive.

Additional Debt Capacity

The most complicated discussion of the meeting had to do with a cash flow analysis and additional debt capacity.

Ralph De Leon, the TIRZ manager, presented two documents: a 5-year cash flow analysis and a 30-year debt-capacity analysis.

Taken together, they show that when Phase 1 is ramping down and Phase 2 is ramping up, expenses would exceed cash flow, so additional borrowing will be needed. The analyses also showed that there is sufficient debt capacity to do so.

To be clear, this is not an increase in the cost of the project. It’s just an increase in borrowing authority to cover a temporary spike in the cost. The analysis shows that future cash flows after project completion will easily pay back the debt.

It is not clear yet what form the debt will take, i.e., whether its short-term borrowing from a bank or the issuance of longer-term bonds. Those details have yet to be worked out.

Because federal funding is involved in Phase 2, the project must be fully funded before construction starts. A revised cash-flow analysis showing the debt-capacity increase will show the federal government that the TIRZ has what it takes to complete the project.

11/15/24 Pictures of Construction Progress

I took the pictures below this morning.

*Looking NW at Corner of Northpark and Loop 494. Note two new southbound lanes.*

*Same intersection but looking southbound*

*Same intersection again, but looking westbound. Some drainage and dirt work must still be completed before crews can begin paving the north side of Northpark.*

At the board meeting, De Leon also discussed a change in ownership of the Exxon Station at US59. The owner reportedly anticipates rebuilding the station farther back to accommodate road expansion to the south.

*The Exxon station will likely move where the car wash now is in the upper left.*

*Looking E from Loop 494. Note crews working on both sides of Northpark just beyond tracks.*

In the last shot, the crews are burying electrical lines. They will be encased in RED concrete as a warning to anyone excavating near them in the future.