The City Council on Tuesday adopted resolutions allocating $2.5 million in incentives for NewQuest Properties of Houston to build a new frontage road along Interstate 10 between Highway 46 and Farm Road 464 to serve Seguin Commerce Center, a 545-acre retail and mixed-use development northwest of the intersection of I-10 and Highway 46.
“We’ve been working on this project for the last couple of years,” City Manager Doug Faseler said.
Cost of the new access road has been estimated at $5.49 million, and NewQuest will pay more than half of that amount.
The city and the Seguin Economic Development Corp. will each be responsible for 25 percent of the project cost or no more than $1.25 million each.
The city and SEDC eventually will be reimbursed for their contributions by the Guadalupe County Municipal Utility District No. 3 as the property is developed and MUD taxes are collected.
“I’m asking you to reject this financial incentive,” local resident Mike Barrow told the council. “It just doesn’t make sense to me.”
Barrow cited an article in the Houston Business Journal reporting that NewQuest had sold $197 million in retail assets to Inland American Real Estate Trust Inc., which he described as a mutual fund of real estate properties. The publication also reported that NewQuest sold $442 million worth of shopping centers to Inland in 2005 and that NewQuest still owns $1.1 billion in commercial real estate assets.
“NewQuest has almost as many assets as the entire city of Seguin,” Barrow said.
The council also heard from Lester Jones, director of development and engineering for NewQuest Properties.
“Yes, NewQuest has been a very successful retail developer,” Jones said, adding that the company’s strength makes it possible to undertake large projects like the development in Seguin.
Jones said NewQuest already has spent $300,000 to $400,000 on the Seguin development and much more money will be spent after the access road has been completed.
“In order to get a development like this, we have to compete with other cities,” Councilman Don Keil said. He pointed out that Austin is offering millions in incentives to Apple Inc. even though the company reportedly has available more than $90 million in cash.
Both resolutions, one concerning city participation and the other approving SEDC participation, were approved by unanimous votes of the council.