Posted on Mar 1, 2022 in
FEATURES
Situated on eight acres within The Sugar Creek Triangle as visitors and citizens alike enter the vibrant city of Sugar Land is the future The District at Sugar Creek: a projected five-story project with multi-family units above and first-floor retail and professional offices below with garage parking in a park-like setting.
A result of the four-year analysis of the Sugar Land Citizen’s Group Land Use Study focusing on expanded housing options, mobility and the fiscal impact of land use, Kaplan Multifamily, a proven national developer, created the concept for the future project, which will consist of approximately 400 units in a Regional Activity Center (RAC) – the next generation of suburban city living.
With the introduction of this visionary, forthcoming project to the community, key questions have arisen regarding The District at Sugar Creek. In an effort to provide cogent communication addressing these frequently asked questions, a summary of responses has been developed.
Land Use Plan: Sugar Creek Triangle Regional Activity Center
What is the Land Use Plan (LUP)?
“As a guiding document to the City of Sugar Land’s Comprehensive Plan, the LUP is expected to be the textbook for both Planning and Zoning and City Council when it comes to development and redevelopment,” said former Land Use Advisory Committee Co-Chair Debra Coffman. “The question of whether multi-family is appropriate within a Regional Activity Center (RAC) was already discussed with the public, Planning and Zoning, and Council before adoption in 2018; therefore, it seems ill-advised to disregard the LUP guidelines as long as the applicant has adhered to the adopted Plan.”
How many multi-family units are still be available among all of the five Regional Activity Centers?
The Land Use Plan recommends a total of 2,237 multifamily units of which 619 have been built and 1,618 units are currently available.
How many multi-family units are recommended in the Sugar Creek Triangle Regional Activity Center
per the Land Use Plan?
435 units.
Is the Planned Development required to be a destination center?
There is a misunderstanding that the proposed project by itself is intended to be the destination center. If an office building is built there, it would not be required to meet all of the elements of a mixed-use destination center. The RAC, as a whole, is supposed to be a destination center and mixed-use activity center. The proposed project is only supposed to be a component of it. The RAC calls for office, retail, hotel and residential. Currently, the only missing component of the mix of uses in The Sugar Creek Triangle RAC is residential.
The Land Use Plan states, “Each phase of development should contribute to the ultimate intended mix. For example, the first phase of a development in a Center with primarily office should include other uses, such as retail or residential to help balance the existing office uses.”
“The 8+ acres being submitted by Kaplan Management Company do not in themselves constitute a RAC with all the requirements of a RAC. The parcel is a mere 5% of the developable acres and is supplying the residential that is lacking in the SCT RAC. Therefore, Kaplan is not required to also build office, retail and commercial because these already exist in some form within the RAC.” – Debra Coffman
How is this Planned Development mixed-use? How will it look mixed-use, and what is the connectivity between mix of uses?
District A has 14,671 square feet (2,376 retail and 12,295 live/work) of commercial space on the ground floor. There are no apartment living spaces on the ground floor in the front of the building where the public would circulate (east and south). Any additional commercial space would have located to be in the rear, away from public circulation, or not on the ground level. In either case, any additional commercial space would not be economically viable or desirable from the commercial tenant standpoint. District B has 11,400 square feet of restaurants and/or retail.
In comparison, Sugar Land Town Square’s residential component, City Plaza, looks completely like a standalone apartment project from the street.
The District at Sugar Creek was designed with elements that distinguish the ground floor as commercial and delineates from second floor apartments. The connectivity is established with the private drive between the Districts. Design elements of building materials, hardscape and softscape tie the Districts together as shown in the rendering below. District A is on the left; District B is on the right.
The image below shows the connectivity between City Plaza at Town Square and the commercial space across the street.
Why was the location selected at this time?
The Sugar Creek Triangle is the right location for apartments and restaurants now as indicated by the Land Use Plan. These uses add activity to the otherwise inactive office-centric RAC.
Kaplan Multifamily learned that the site was available in 2019 and has since been working with staff to plan a project that meets the requirements of the Sugar Creek Triangle Regional Activity Center as defined in the 2018 Land Use Plan.
Can the public green space be larger?
Local restauranteurs with three restaurants in Sugar Land Town Square worked with the architect to create the District B site plan. Being successful Sugar Land restaurant veterans, the partners gave parameters that they needed to ensure the viability of the restaurants. Besides ensuring functionality and viability of the restaurants, the goal was to create activity along the private drive between Districts A and B. The restaurants would be wrapped around a shared lawn and have patio seating along the drive. The lawn can be larger; however, there are limiting factors. If the lawn increases in size, the restaurants would need to be smaller.
The currently proposed restaurant sizes are based on the guidelines of the restauranteurs for their concepts. The biggest limiting factor is parking. The site was laid out to maximize the parking to meet city requirements, as wells as provide ample parking to ensure the restaurants’ viability. Parking would be shared between Districts A and B. Restaurant/Retail staff would park at District A. Parking at District B would be reserved for customers.
The western Public Park (3,905 square feet) and central Plaza Event Lawn (2,744 square feet) is total 6,649 square feet of public green space, which is 1.9% of the Planned Development. In comparison, CityCentre’s event lawn is roughly 4,645 square feet or 0.2% of the 50-acre development. LaCenterra at Cinco Ranch’s event lawn is roughly 9,263 square feet or 0.6% of the 34-acre development. Sugar Land Town Square’s event lawn is roughly 11,695 square feet or 0.8% of the 32-acre development.
What is the apartment demand?
Yardi Matrix shows that the Sugar Land – west submarket had a 96.6% occupancy and average rent of $1,489 in Q4 2021. It forecasts 96.5% occupancy and an average rent of $2,176 in Q4 2031, a rent growth of 46% over 10 years.
Specifically, the five newest conventional Sugar Land apartments (Marquis at Sugar Land, Telfair Lofts, Imperial Lofts, Retreat at Riverstone and Stella at Riverstone) have occupancies ranging from 94.6% to 97.2%.
There were two apartments built at The Grid in Stafford. 1879 at the Grid was completed in 2019 and is now stabilized. Its rents increased from $1,560 in February 2021 to $1,783 in January 2022, an increase of 14.3% over 11 months. Arc at the Grid was completed in 2021 and is currently leasing up. Its rents increased from $1,683 in February 2021 to $1,764 in January 2022, an increase of 4.8%. It is typical to see rents flat during lease-up. Arc is currently 70% occupied, which equates to an absorption of 20.2 unit per month since receiving its certificate of occupancy in January 2021.
This is very strong demand for apartments. In comparison, the Sugar Land office occupancy is around 83%-84%.
We’ve had a tremendous employment growth in last five years. I believe it was around 20% growth in our employment where population growth was much smaller. Our population growth was low while our employment growth was very high. We had very specific workforce sections around management, technology, finance, that we actually have more of a demand to have those people live and work here at the industries that we have. I would say that from what our workforce study showed, and I’m trying to go of this off of memory, but in general it showed a demand that being able to have more young professionals live here in Sugar Land, that it would be supported by employment growth for the industries that we have here.
– Economic Development Assistant Director Devon Rodriguez
What is the service area for the apartments?
Three to five miles is the typical service area for apartments.
Is the area being overbuilt?
The pipeline of submarket apartment construction is very limited. There are no other apartments under construction or application in Sugar Land. In Stafford, there is one project totaling 346 under construction units, which is already 70% occupied. There are two other projects totaling 200 units proposed. Missouri City has no projects under construction and two projects totaling 639 unit proposed per Yardi. Keep in mind that many projects proposed do not get built. Also, projects typically take three years from when proposed to completion meaning those would be delivered over a few years.
What is the target market for the apartments?
The unit mix was proposed, in part, to accomplish two things:
1
Target residents would catalyze activity in the Sugar Creek Triangle Regional Activity Center as intended in the City of Sugar Land’s Land Use Plan. Young professionals and empty nesters are targeted. These are the groups with the most disposable income.
Young professionals, engineers, nurses, etc. who work at Schlumberger, Fluor, hospitals and similar businesses have significant disposable income but are not yet looking to purchase a house. They earn their income in Sugar Land and spend their disposable income on apartments, restaurants and retailers outside of Sugar Land.
For many empty nesters, a 4,000-square foot house on a 10,000-square foot lot is far too large. For some, living in apartments would make sense. Both Kaplan principals have recently lived in apartments, luxury mid-rise apartments, like the planned project. The stigma of apartments stem from old perceptions of garden-style projects, not the planned high-end mid-rise project.
The intent is to keep professionals who work in Sugar Land to also live in Sugar Land. A luxury apartment such as the one proposed would assist the City with completing the life cycle in which a Sugar Land resident can grow up in a house, go to school, get a job, rent an apartment, buy a house, raise a family and retire in one complete life cycle in Sugar Land.
2
Minimize the impact to Fort Bend ISD schools. Of the 402 total units, 329 are studio or 1-bedrooms. Practically speaking, these studio and 1 bedroom units would produce no Fort Bend ISD students. The balance of the 78 units would be 2 bedrooms. Many of these units would be leased by individuals or couples who work from home and want to use a second bedroom as a home office. Other units would likely be occupied by roommates. The likelihood of the 2-bedroom occupied by families with school-aged children is low. Additionally, there are no 3-bedroom units, which would produce a greater rate of students.
What is driving demand for live-work units?
A shift in the way people live and work has been happening for many years, although COVID has accelerated it. People have become more minimalist, opting for convenience and efficiency. Instead of driving 45 minutes during rush hour from Sugar Land to downtown Houston, some have the convenience of telecommuting rather than spending two hours each workday for the round trip drive and getting ready.
Polling properties like this showed that 50% to 60% of residents work from home. It’s not necessarily because of COVID, but because we create an environment featuring amenities, such as large gyms, conference space, WeWork-style work space, etc., residents do not have to commute to what is often a shared office situation. We also plan to provide Wi-Fi in the common areas and units and 1 GB speed internet, which is faster than many offices provide.
A live-work unit can be very appealing for many start-up entrepreneurs and sole proprietors. For example, a photographer can have the convenience of going downstairs to work in his or her studio. A lawyer can work and meet with clients without having to rent separate office space elsewhere. These hypothetical professionals can be replaced with many other sole proprietors who would benefit from having a small office or retail space for clients while having the convenience and cost-efficiency of living in the same unit.
What happens if a business in a live-work unit fails?
The intent is to always have live-work units full and businesses operating in them to contribute to a lively public experience. Should a business operating in a live-work unit no longer operate as intended, the tenant shall be promptly replaced in accordance to applicable laws.
Why should the apartments be built before commercial?
There’s a real estate adage “retail follows rooftops.” Having 600 new residents and potential customers next door would help the viability of the restaurants. If the restaurants in District B opened before District A is complete, the construction would be very disruptive to the customer service-based restaurants. This would be detrimental to the restaurants in their first year, which is the most vulnerable time.
Were the apartments at The Grid built before commercial?
According to the manager at 1879 at the Grid who has worked at the property since lease-up, the apartments opened six to nine months prior to the restaurants opening.
The Google Earth desktop program has a tool that shows satellite images back in time. In October 2017, there was nothing developed where 1879 and the restaurants would be located. The exterior buildings of 1879 and the restaurants appear to be complete in December 2018.
Fort Bend County Appraisal District shows improvements on their tax rolls for 1879 starting in 2019 and for Whiskey Cake in 2020.
How would drainage be impacted?
Districts A and B would comply with all City drainage requirements. The Districts will detain stormwater on-site, and there will be no downstream impact.
Would there be cell phone towers on top of the buildings?
There will be no cell phone towers on top of the buildings. The Planned Development has strict material guidelines that were recommended by City staff. Additionally, the applicant would not want to include anything aesthetically displeasing.
How much new traffic would be generated at the intersection of US 59 and Sugar Creek Blvd?
It’s projected to have an icrease of 90 vehicles per day (3.75/hour) going southbound and 180 vehicles per day (7.5/hour) going northbound.
How was the traffic impact analysis commissioned?
Kaplan Multifamily engaged LJA Engineering, a firm with significant expericence with the City of Sugar Land. The City and LJA had a scoping meeting in which the City defined specific requirements of the study. The study was conducted in full compliance with the City of Sugar Land standards and specific requirements from the scoping meeting.
What would be the impact to schools?
A school impact analysis was completed by a firm with more than a decade of experience as Fort Bend ISD’s demographic consultant and a leading demographic consultant for most high-growth school districts in Texas. Kaplan Multifamily provided the unit mix and had little communication with the consultant. The applicant gave no direction to the consultant. The analysis projected an impact of 15 elementary, 6 middle school and 8 high school students.
Can the number of units increase or unit mix change such that it would have a greater impact on schools?
The Planned Development caps the number of total units to 402 and 2-bedroom units to 78.
How would the Planned Development impact property values?
There have been three class B garden-style apartment projects totaling 668 units built on Dulles Ave between 1996 and 2002. Home sales prices per square foot in Sugar Creek increased from $58.76/SF in 1997 to $142.56/ SF in 2021, a 142% increase per HAR.com, https://www.har.com/pricetrends/6610_sugar-land.
Sugar Creek has not seen a negative impact on property values from the 668 class B garden-style apartments units directly adjacent to it. In comparison, the Planned Development is a class A mid-rise and would be located across a 10-lane interstate highway and six lanes of service roads.
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