$430 Million Rice Village Bond Approval Raises Questions

A quietly formed Rice University-affiliated management district won approval in November for $430 million in bonds, backed by only four voters, according to the Houston Chronicle.

Only 12 residents were eligible to participate, and at least six had moved out of Texas, leaving a presumed electorate of six. The four ballots cast authorized the Rice Village Management District to issue bonds for water and sewer upgrades, roads and recreational facilities.

One voter opposed all five bond propositions, meaning a single “yes” ballot determined the outcome on each measure.

The district covers about 26 acres between Times and University Boulevard and was created by the Houston City Council in March to support infrastructure aligned with Rice University’s broader redevelopment plans, including the recently announced Gateway Project.

Attorney Sanjay Bapat, representing the district, said:

“We’re creating a small district over the area and then levying a tax on the property within that district… that tax will be used to finance the public infrastructure that’s required to bring the Village up to modern standards.”

Voters authorized a property tax rate of $1.50 per $100 valuation, significantly higher than combined Harris County and City of Houston rates. Although the district holds taxing authority, the Texas Commission on Environmental Quality must determine whether any tax rate adopted is “commercially feasible.”

Rice Real Estate Co., a for-profit Rice subsidiary that owns most of the land in the district, is expected to front the initial costs, then be reimbursed through future bonds and taxes once redevelopment raises property values.

“Rice is essentially going to act as the bank for the redevelopment,” Bapat explained. “If the district is redeveloped and there’s value that’s created there, it will then issue bonds based on that property tax to reimburse Rice for their infrastructure costs.”

The Houston Chronicle reported that the district has no public website and relied on a posting on a physical notice board and required newspaper filings to notify eligible voters.

Rice’s promotional materials for the Gateway Project did not mention the management district or the bond package.

All five board members of the management district are affiliated with Rice University. A Rice official, Kelly Fox, said in a university press release:

“It is a deliberate effort to remove the boundary between the university and Rice Village in ways that are walkable, livable and welcoming.”

Observers noted that while management districts are common tools for localized improvements, the tiny pool of eligible voters often involved can raise concerns about democratic accountability.

“If somebody came to me as a legislator and said: ‘Do you think there should be a minimum number of qualified voters to be able to make a decision here?’ Sure… it just seems to me that on its face it’s somewhat shocking,” Houston tax attorney Beto Cardenas told the Houston Chronicle.

The district expects construction to begin within a year. All funds generated through the authorized taxes and bonds must be spent within the district’s boundaries and will not overlap with university-funded campus projects.

According to the Houston Chronicle, the approved bond package includes: