Sugar Land Permanent School Fund will place the proceeds from the sale into an interest-bearing fund earmarked for Texas schools. About 21 years ago, Newland's predecessor, Genstar Corp., a diversified Canadian-based land owner and developer, helped to write legislation so the owner at the time, the Texas Criminal Justice Department, could sell the land. The acreage finally came to market in 1987, but at a price so high that nobody bid on it, Jim Jenkins, president of Newland Texas, tells GlobeSt.com.

In 1991, the acreage passed to the state transportation department and then to the Sugar Land Permanent School Fund, which conducted a sealed-bid sale Oct. 23, 2002 through the Texas General Land Office. Newland beat out two other bidders for the land mass and had one year to close the deal.

Jenkins says the land will be primarily developed into single-family lots, but about 31% has been set aside for commercial development. The long-term plan calls for the City of Sugar Land to annex the developed acreage, which is located near US Highway 59 and 90-A and Texas 6. The city also holds a 100-acre option as a building site for the Texas Energy Center, a proposed research facility to test and develop "smart" grids for electricity distribution. City officials are now evaluating developers for the project.

Jenkins says Newland's new community, which is as-yet unnamed, will bring 1.5 million sf to two million sf of retail, including a 200,000-sf village center. There are two 10-acre tracts earmarked for multifamily development, with a cap of 200 units for each parcel. Jenkins says every major multifamily developer in the US has expressed an interest in building out the component.

Newland's strategy capitalizes on developing building sites for product with high barriers to entry within the city limits, where developable land is in short supply. The focus will be residential and retail projects with office and industrial development taking a back seat. The plan includes a regional park, three-mile urban waterway and parcels for three or four new schools for the Fort Bend school district.

Jenkins says parcels should be ready to go under contract in mid-2004. Sales should start in second quarter 2005. He says most of the commercial acreage will be resold, but Newland is keeping the door open for some joint ventures. Asking prices will be market rate, which right now ranges from $7 per sf to $22 per sf.

"Newland is already the largest community developer in the Houston region and this purchase reinforces our belief in the long-term, growth potential of this market," Jenkins said in a press release. Newland's current projects are Cinco Ranch, Eagle Springs, Grayson Lakes, Greatwood, Seven Meadows and Summerwood.