Montgomery council and H‑E‑B negotiate language, remedies in draft development agreement

The City of Montgomery City Council met with H‑E‑B representatives on a draft development agreement that council members said requires softer language so the city retains meaningful input on the location and design of a proposed memorial and on remedies if the developer fails to meet obligations. The item was discussed June 2025 and no formal action was taken.

The discussion matters because the agreement touches public utilities, variances that could affect adjacent single‑family property, and legal language that council members said may limit the city's enforcement options. Council members pressed H‑E‑B on language that currently gives the city sole discretion to determine a monument site and on a provision (Section 3.2.d in the packet) they said appears to limit the city's remedies to utility disconnection in some enforcement scenarios.

Mayor said, "I think we'd like to have a say," when asking what language would allow the city input without dictating aesthetic details. H‑E‑B real estate representative Sean Smith introduced himself and the company’s team and answered council questions: "Mayor, City Council. So I'm Sean Smith with real estate team here in Houston," he said.

Council members identified several technical items they want clarified before any vote: two variances pending before planning and zoning (including a request to place a public water line in the SH‑105 right of way rather than within a 16‑foot easement, and a request to reduce a landscape setback from 25 feet to 20 feet where the site abuts a single‑family property in the extraterritorial jurisdiction); a requested adjustment of parking‑lot tree placement (the packet noted trees moved to "150 feet from the door" for sanitation reasons); and a question about a proposed 60‑foot easement connected to a retaining wall. Council members asked city staff and H‑E‑B to provide clearer engineering rationale for the easement and retaining‑wall placement.

Council members also raised concerns about a legal clause flagged in the packet. A city speaker noted the provision appears to limit the city's remedies to utilities: "If code enforcement goes out there and says this is not at all what was agreed upon, the only thing that we can do is turn the water," the speaker said during discussion of enforcement options. Council asked staff to check how commonly similar clauses appear in other Texas development agreements and to clarify what bonds or other financial assurances will be required if H‑E‑B leaves a project incomplete.

Participants agreed to continue negotiating specific language rather than remove requirements outright. Several council members advocated for "softening" the clause that currently reads as giving the city sole discretion over location, suggesting alternative phrasing such as "a location acceptable to both the city and H‑E‑B." H‑E‑B indicated willingness to work with the city on mutually acceptable language but said it did not want provisions that would unreasonably restrict project feasibility.

Council members and H‑E‑B representatives also discussed how public improvements would be bonded and who would bear costs if utilities end up under future pavement, with city staff noting the utility owner would be responsible for relocation or repair if a state agency or TxDOT improvement affected the line. No vote or final agreement language was adopted; council directed staff to continue negotiations and to return the item once revised language and clarifications (engineering rationale for easement/retaining wall, specifics on the dedication/monument commitments, and the draft remedy/bond language) are supplied.

The item will return for future consideration after city staff and H‑E‑B refine the draft and the planning and zoning variances are processed.