The City Council has given a green light to spend up to $29.5 million from city funds to buy roughly 185 acres owned by former Texas Rangers star Rafael Palmeiro.
City Manager Bruno Rumbelow said buying the land near Grapevine Mills mall would give the city a vast amount of real estate that hopefully could be resold at a profit, as well as allow the city to have a greater say in whom the future owners would be, and how it would be developed.
“We would essentially control the fate of this acreage,” he said.
Four council members supported the deal, but council members Darlene Freed and Chris Coy opposed it, saying they were uncomfortable with the city becoming land brokers. Mayor William D. Tate, whose company has done title work for Palmeiro, recused himself from related discussions and votes.
Palmeiro, a resident of Colleyville, bought the tract in 2007 and planned a mixed-use development that was never realized. The property — listed in court documents as The Gardens of Grapevine Development — was destined for foreclosure, but it was stopped when Palmeiro filed for Chapter 11 bankruptcy in 2011.
At the Dec. 17 City Council meeting, the council and the Grapevine 4B Economic Development Corp. held a public hearing on the proposed issuance of up to $19.5 million in revenue bonds in support of the acquisition of the land at the intersection of Texas 121, Grapevine Mills Boulevard and Grapevine Mills Parkway.
A handful of people spoke, mostly in support.
During a short presentation, the City Council was shown the plan that was designed to free up valuable land by taking it out of bankruptcy, spurring development in harmony with Grapevine’s economic development objectives, holding the acreage on a short-term basis and creating a master plan to put the land back into the private sector at market prices.
“This is a short-term hold to make sure it doesn’t continue to languish or be purchased by a developer who only wants multifamily on the tract,” Rumbelow said. “We will master plan it and put it back into the private sector for development that meets the city’s overall strategic development objectives.”
The Grapevine 4B Economic Development Board approved a resolution of the board of directors, authorizing the issuance and sale of $19.5 million in revenue bonds and allocating $10 million cash from the Rail Station reserve.
John McGrane, city administrative services director, in response to a question from Mayor Pro Tem C. Shane Wilbanks, said the acquisition would not result in a tax increase.
The City Council then voted to authorize the city manager to execute a real estate contract to acquire the 185 acres for $29.5 million, or $3.66 per square foot.
An owner appraisal in 2011 showed the property’s worth at $55 million, the council was told. This year, the city had an appraisal done that estimated the value at $43 million.
Rumbelow said they plan to close on the property soon and fully fund the transaction by Feb. 28. They would then engage a land-planning consultant for feasibility and site planning, develop a site marketing plan and consider a land banking policy and 4B fund reimbursement plan.
Freed, a real estate professional, was the most vocal in opposition to the plan, saying it was “OK real estate” that had been for sale for seven years. She questioned whether the city could turn it around.
“I struggle philosophically about cities buying property,” Freed said, adding, “We may be sitting on this property for 10 years, I don’t know.”
Freed said she understood that there were “good people on both sides” who were “doing what they feel is best for the city of Grapevine.”
Councilwoman Sharron Spencer, who voted in favor of the purchase, noted that “the complexity is almost overwhelming.”
She pointed out that “it is the single largest tract of undeveloped land remaining in our city” and supported the deal that she believed was in line with the workings of “a city that most people love.”
“I think it’s a wise decision,” Spencer said.