DALLAS -- A mere four voters in Houston's sparsely populated Harris County District No. 1 unanimously approved on Saturday the issuance of $125 million of general obligation bonds to fund projects.
The seven-member board that oversees the district will meet today to formally review the 4-to-0 election results -- representing one vote for every $31.25 million in debt. Results are expected to be validated within two months.
Managing Director Eugene B. Shepherd of Legg Mason Wood Walker Inc. in Houston, the district's financial adviser, said an initial $10 million deal could be sold by September or October. No specific plans have been made for the remainder of the debt, he added.
Advisers to the district, 325 acres that encompass the upscale Galleria shopping area, had predicted approval because the zone consists almost entirely of commercial real estate. I addition, none of the voters was a taxpayer who would be affected directly by the debt issue.
Because the district has a $1.4 billion tax base, Mr. Shepherd said, the deal makes a good candidate for bond insurance. An insured deal could be sold in the competitive market, he added.
Noting that the district has never sold bonds since its creation in 1987 by the Texas Legislature, Mr. Shepherd acknowledged, "The uncertainty of a first-time issue may force us to look at a negotiated sale."
The district is the first of three in Texas, all of them in Houston, to win voter approval for improvement bonds. Districts No. 1's plans range from improving traffic flow to ornamental changes such as new lighting, archways, and specialized street signs that reflect the area's swanky image.
The improvement districts are unique in Texas because they represent a hybird of other special district financings. Most districts can pay for only one kind of project, like roads or municipal utilities. But this new district is virtually unlimited in the kinds of improvements it can finance.