Fate approves Project Cactus 380 incentive, amends Lafayette Crossing deal to fund infrastructure

FATE, Texas — The Fate City Council and the Fate Municipal Development District No. 1 on April 14 approved a Chapter 380 economic incentive agreement to help build infrastructure for Project Cactus, an 80-acre commercial development at the northwest corner of Crawford Road and Interstate 30, and amended the Lafayette Crossing development agreement to remove certain impact-fee credits tied to that site.

The Project Cactus plan presented to the council by Matt Wavering, city staff member, calls for about 400,000 square feet of commercial space, anchored by two large-format retailers of at least 100,000 square feet each; staff estimated the development could add roughly $140 million in taxable real property value and about $2.8 million in annual sales tax at full build-out.

Wavering said the site requires extensive public infrastructure — an east–west connector road, relocated water mains, sewer, stormwater detention and a traffic signal — with an estimated total infrastructure cost up to $15 million. The current Lafayette Crossing development agreement provided $9 million in impact-fee credits for part of that work; the council approved an amendment that removes those credits east of Woodcreek Boulevard so the city can instead reimburse actual infrastructure costs under a Chapter 380 agreement.

Why it matters: City leaders said the incentives are meant to close a viability gap and help the developer secure anchor retailers that, in turn, would attract additional shops and restaurants. Under the approved incentive, reimbursements are strictly performance-based: the developer is eligible to receive up to 50% of sales tax generated by the Project Cactus site as an annual reimbursement, limited in total by actual cost not to exceed $15 million and subject to a 10-year “shot clock” beginning Jan. 1, 2028 (with a limited accommodation for sales tax generated late in 2027).

Council and MDD action: The council voted to approve the first amendment to the Lafayette Crossing development agreement (motion by Councilor Ruppin, second by Councilor Harper; motion passed 7–0). The Fate MDD board likewise approved an agreement for economic incentives for Project Cactus. The city council then approved the Chapter 380 agreement for Project Cactus by roll-call vote (7–0).

Details of the incentive and limits

- Reimbursement mechanism: Annual performance reimbursements equal to 50% of sales tax generated at the Project Cactus site, paid only after the infrastructure is complete, all invoices have been reviewed/paid and sales tax production is confirmed. - Cap and timing: Reimbursements limited to actual documented costs or $15 million, whichever is less, over a 10-year reimbursement period starting Jan. 1, 2028. If retailers open in late 2027, those sales may be included in the 2028 calculation to support an initial payment. - Source of funds: The city may use a combination of lawful sources — impact-fee receipts (to the extent they are available and eligible), water capital replacement funds, MDD sales-tax funds and the general fund — with restricted funds used for their intended purposes first. - No double-dipping: The Lafayette Crossing amendment removes the prior impact-fee credits for the eastern 80-acre portion so a developer cannot receive both the impact-fee credit and 380 reimbursements for the same infrastructure. Park development fee credits were not changed and remain unaffected.

City projections and examples presented to council

Wavering and staff presented illustrative numbers showing how reimbursements would work if, as an example, combined city and MDD sales tax from the site equaled $1 million in a calendar year: the developer would be eligible for a $500,000 reimbursement that year after verification of infrastructure completion and sales tax receipts. At full build-out staff estimated $2.8 million in annual sales tax and about $362,000 a year in city property tax revenue from the new improvements.

Concerns and responses

Council members pressed staff on timing and competition for retailers. Several councilors said timing is a factor because anchor retailers are considering nearby cities, and delaying action could risk losing commitments. Council members also emphasized that the reimbursement is performance-based and that if retailers or buildings do not produce sales tax there will be no payout.

Developers and next steps

City staff said Gulf Coast Commercial Group is the proposed developer on the project and representatives of the master developer Lafayette Crossing attended the meeting and were available to answer questions. Staff advised the council that the developer must complete the required infrastructure and secure tenants for reimbursements to begin. The council approved the amendment and the 380 agreement to allow staff and the developer to finalize implementation details and move toward permitting and construction.

Ending note: City staff will return to council and the MDD with the final executed agreements, any implementing administrative procedures and documentation for reimbursements as the project advances; no additional council action was recorded at the meeting on the mechanics of future payments beyond the approved agreements.