Item 4O - Memo CITY OF Item 40
SOUTHLAKE
MEMORANDUM
June 10, 2026
To: Alison Ortowski, City Manager
From: Daniel Cortez, Director of Economic Development & Tourism
Subject: Approval of a Master Development Agreement (MDA) with
Trademark Retail Holdings, LLC for an economic development
agreement including infrastructure improvements for the
development located at 1900 N. White Chapel Boulevard.
Action
Requested: Approval of the Master Development Agreement (MDA) with Trademark
Retail Holdings, LLC for an economic development agreement including
infrastructure improvements for the development located at 1900 N.
White Chapel Boulevard.
Background
Information: The Trademark-Shivers mixed-use development located at 1900 N.
White Chapel Boulevard was approved by the City Council on October
21, 2025, under Ordinance No. 480-837 (Planning Case ZA25-0045). In
conjunction with that request, the developer has submitted to the City an
incentive request outlining the requested support to develop the
property. The Master Development Agreement (MDA) with Trademark
Retail Holdings, LLC, establishes the framework for public infrastructure
participation and performance-based economic development incentives
tied to the project. The MDA defines the roles and responsibilities of the
City and the developer for planning, constructing, and funding public
improvements and private development necessary to implement the
project consistent with the City's zoning approvals and comprehensive
plan.
Under the MDA, the developer is responsible for designing and
constructing defined public improvements, including streets, utilities,
drainage, open space, and other public facilities that will serve the
development and the surrounding area, subject to City review,
inspection, and acceptance in accordance with City regulations and
approved plans. Upon completion and written acceptance, the City will
own or hold public easements over the public improvements and
assume ongoing maintenance responsibilities, except where otherwise
specified in the agreement. The agreement establishes a maximum not
to exceed incentive amount of $18,850,000 in reimbursements tied to
the development, with the City's reimbursement obligations limited to
available revenues and never exceeding this cap or a maximum.
The MDA is in alignment with the terms in the Memorandum of
Understanding executed earlier this year and establishes the initial
framework for the creation of the following:
Residential Public Improvement District and Commercial Public
Improvement District: The agreement establishes an understanding of
a future consideration by the City Council for the creation of two Public
Improvement Districts (PID). The PIDs' purpose is to levy assessments
on benefited property to fund eligible public improvement project costs.
PID funds may be used through potential PID bonds to reimburse the
developer for approved public infrastructure costs.
A Tax Increment Reinvestment Zone (TIRZ): The agreement also
provides for City Council consideration of the future creation of a Tax
Increment Reinvestment Zone (TIRZ) on the commercial portion of the
property, to be created with a base year and a term of up to twenty-one
years to support funding for public improvements within the zone. The
maximum incentive amount will apply to any payments reimbursed to
the developer for these public improvement expenditures and the
developer will be eligible for no more than eighteen annual
reimbursement payments subject to the incentive cap. Details of final
eligible costs and reimbursement mechanisms will be established with
the TIRZ Project and Financing Plan, a component of the statutory
requirements for the creation of these types of districts.
Chapter 380 Economic Development Program Reimbursements:
The MDA further establishes a Chapter 380 economic development
program that allows the City, in exchange for the developer's capital
investment and performance, to provide limited-term grants or
reimbursements funded from new sales tax revenues generated by the
development. Specifically, the City may reimburse the developer an
amount equal to fifty percent (50%) of General Fund sales tax revenues
attributable to qualifying construction materials sourced to the Property,
and ninety-five percent (95%) of General Fund sales tax revenues
generated from commercial operations on the property for a two year
period after the first certificate of occupancy is issued for the commercial
portion, with all such grants counting toward and reducing the overall
$18,850,000 maximum incentive amount.
Performance Requirements. To qualify for and maintain eligibility for
incentives, the developer must meet defined construction and
performance obligations, including:
• Achieving a minimum Capital Investment of $127,900,000 by the
time the full development reaches completion of construction.
• The development must also generate and maintain a minimum
taxable value for the 2031 tax year and each year thereafter during
the term of the agreement and for at least twenty-one years after
completion of construction within the TIRZ boundaries, with failure to
maintain this threshold subjecting the developer to default, potential
recapture, and possible reduction or suspension of TIRZ
reimbursements.
• In addition, the developer is obligated to create a minimum amount of
full-time equivalent (FTE)jobs by June 30, 2028, and to maintain that
employment level through the term of the agreement, with annual
certification of FTE counts and related documentation. If FTE
requirements are not met in a given year, the next payment or
reimbursement due to the developer is reduced by $1,000 per FTE
shortfall, and material misrepresentation of FTE data constitutes an
event of default that may trigger termination and repayment of
incentives.
• The MDA establishes specific construction commencement and
completion deadlines.
• The agreement includes annual reporting and certification
requirements, audit and verification rights for the City, and remedies,
such as the reduction, suspension, or termination of incentives, and
the recapture of previously paid Chapter 380 grants and tax
increment reimbursements, if the developer fails to meet its
obligations.
The agreement makes clear that adoption of the MDA does not, by itself,
obligate the City to create the PID or TIRZ, issue any debt, or approve
any future Chapter 380 grant or reimbursement; each mechanism will
require separate City Council consideration and is subject to statutory
requirements and the availability of funds. All incentives contemplated
under the MDA are performance-based, subordinate to the City's
authority and financial policies, and may be modified or discontinued by
the City Council in accordance with the terms of the agreement if project
performance or future conditions warrant adjustment.
Strategic Link: F1 — Safeguarding the public trust through a commitment to thoughtful
planning and responsible, conservative financial management.
F2 — Investing to provide & maintain high quality public assets
B2 — Collaborating with select partners to implement service solutions
Financial
Considerations: The Policy Statement for Public Investment notes as a guiding principle
that it is the City's desire that public investment is performance-based
and considers a reasonable return on investment via direct financial
return and other indirect benefits.
As part of the project evaluation, the City reviews the financial elements
of the project and conducts a return-on-investment calculation. This
calculation considers the amount of public investment that has been
requested and compares that with the anticipated amount of new
revenue the project will generate (based on the developer's
assumptions as to timing and sales per square footage) through both
direct and indirect means.
ESTIMATED RETURN ON INVESTMENT
For this project, the estimated return on DURING INCENTIVE PERIOD
investment varies depending on ultimate
buildout of the project and specific uses Excluding Residential
in place. The two scenarios contemplate
the City taking the residential portion of
the development into account and one With hotel
where it does not. The other
circumstance is if the developer Without hotel
chooses to build the hotel on the
property of if they choose not to. These Including Residential
scenarios and their return are shown in
the exhibit.
With . -
. -
Citizen Input/
Board Review: The Community Enhancement and Development Corporation (CEDC)
reviewed the request for public investment and provided evaluation and
feedback to the City Council per the provisions of the Policy Statement
for Public Investment.
Legal Review: The City Attorney's office prepared and reviewed the agreement for City
Council's consideration.
Alternatives: The City Council can consider the following alternatives for this request:
• Approve the agreement as submitted
• Approve the agreement with amendments
• Deny the public investment request
Supporting
Documents: Master Development Agreement
Staff Contacts: Daniel Cortez (817) 748-8039