Sapphire Bay

Sapphire Bay development rendering 1

Sapphire Bay FAQ 

Sapphire Bay is a $1 billion mixed-use development located on the shores of Lake Ray Hubbard, south of I-30 at Dalrock Road.  Planned features include a lagoon amenity and an island entertainment component with an incredible synchronized water and video show; a Hyatt Destination resort and conference center; and a surf and beach club.  Other unique hotels, restaurants and shopping will round out this destination experience.   A variety of lake-living opportunities will offer apartments, high-rise condos and single-family living with parks and trail systems to enjoy.  Sapphire Bay will become a national destination for conferences, vacationing families, residents looking for a unique place to call home, and businesses who want to locate where their employees can live, work, and play.  Sapphire Bay Marina is a full-service, deep-water marina separately owned and operated located adjacent to the development with over 1000 boat slips, a state-of-the-art ship store, fuel pumps and boat rentals.  

**UPDATE - March 30, 2022**
Construction is underway at the southern end of the peninsula for The View multi-family project developed by Zale Properties, with plans to be open for occupancy later this year.  K Hovnanian is constructing townhomes along the southwestern shore and with plans to close on some of those home in late spring of 2023.  Other approved projects include Bombshells restaurant, Margaritaville resort & additional multi-family to be developed by Floridays. Landscaping plans have been approved that include the installation of a Kite/Surf Park and Community Park as well as a trail along the southern peninsula.  Construction for underground electric and fiber are also underway.  The City will soon begin construction on a public safety facility to house a fire station and police sub-station within the development.    

**UPDATE - February 4, 2022**
Sapphire Bay Marina announces Marina District and Baywalk project. The district includes one of the largest marinas in the state, with 10 new dock houses and seven others remodeled and refurbished, a restaurant complex, and on-the-water boat rental and brokerage centers. The highlight of the district will be a collection of casual waterfront food concepts called Baywalk. The developers describe it as a casual experience unlike anything in the metroplex, creating an escape from the ordinary. Baywalk will hug the lakefront, jutting out over the water at various points, and features a variety of seating for all seasons, entertainment areas, string lights and an assortment of plantings. The District will provide family options, appealing to locals and young adults as well as our local boaters/sailors and water sports enthusiasts who want a fun, lake lakefront experience with a one-of-a-kind boardwalk frontage and waterfront views. Read on...

**UPDATE - MARCH 3, 2021**
Sapphire Bay announced Hyatt will operate the new Sapphire Bay Resort & Conference Center on behalf of a public-private partnership with the City of Rowlett. Expected to open in fall 2023, the resort will join Hyatt’s Destination Hotels brand and showcase more than 500 guestrooms, suites, and villas each with waterfront views overlooking Lake Ray Hubbard and the seven-acre man-made Sapphire Bay Lagoon.

“We are very excited to see Destination Hotels by Hyatt join the Sapphire Bay team,” said Rowlett Mayor Tammy Dana-Bashian. “The resort and conference center are integral components of this development. With the Hyatt brand offering their distinctly well-known and upscale experience, we look forward to the Sapphire Bay Resort becoming a sought-after and unique national destination for business conferences and vacationers alike.”

Sapphire Bay Resort will offer luxurious amenities, a full-service spa, state-of-the-art fitness center, six pools and tropical gardens. The property will feature more than 100,000 square feet of indoor and outdoor event space including two grand ballrooms, multiple-sized breakout boardrooms, pre-function areas, event lawns, and a special event island nestled along the eastern shore of the Sapphire Bay Lagoon.
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Who is the City’s  development partner?
Sapphire Bay Land Development, LLC - comprised of President Marc S. English and local real estate developer Kent Donahue, who bring more than 40 years’ combined development experience to the project. Marc English will spearhead all contractual negotiations, manage the construction of all public improvement district (PID) amenities, including an approximately 6.5-acre Crystal Lagoons water feature and island show fountain, and the eventual award of all construction contracts with the many contractors that will competitively bid on this project. Kent Donahue will design, oversee, and collaborate with the many experiential design consultants and architects to envision, facilitate and design the project, anchored by a 500-room resort hotel, spa, conference center, approximately 1.4 million square feet of commercial lease space, and a surf and beach club featuring not only the Crystal Lagoons amenity, but also a one-of-a-kind, competition-quality surfing venue.

What is the purchase price and who is funding it?
Funding for the $37,013,000 acquisition price, including the $150,000 in earnest money, has been provided by Sapphire Bay Land Holdings. This land is now owned by Sapphire Bay Land Holdings I, LLC and the marina is now owned by Sapphire Bay Marina, LLC.

What is included in the purchase?
The 117-acre tract of land south of IH-30; the Crystal Lagoon license previously purchased by Bayside; and the existing operating marina including rights to 1,005 boat slips.

What is the project timeline for Sapphire Bay?
The first phase of Sapphire Bay is anticipated to be completed by December 31, 2023.  That phase includes mass grading of the site to elevate out of the flood restriction easement, the lagoon and island entertainment feature, all the on-site and off-site public infrastructure (streets, water, wastewater, storm sewer, etc.) a portion of the extensive hike and bike trail, community parks and the entertainment and dining promenade surrounding a significant portion of the lagoon. 

In addition, the City and our new development partner are working to determine a funding plan for a Hotel Resort and Convention Center by December 31, 2019. Once that funding plan is agreed to by both parties, the Hotel Resort and Convention Center along with the Surf and Beach Club components will be included in the first phase with an anticipated completion by December 31, 2023.

The timing of the first phase opening for Sapphire Bay was in large part determined by the public infrastructure, including the TXDOT IH-30 Improvements, to be constructed between now and December 2023.

The City and Sapphire Bay Land Holdings I, LLC will be working on future phases and look forward to announcing a significant number of projects in the near future.  At full build out, which is anticipated over a 10-year period, Sapphire Bay will have nearly 1.4 million square feet of combined commercial facilities including retail, office, hospitality, entertainment and restaurants and an estimated 1600 residential units consisting of condominiums, townhomes and apartments.

What is included in the Surf and Beach Club and the lagoon amenity? 
This one-of-a-kind out-of-ocean surf venue will deliver a world-class, competitive-quality surfing experience to be enjoyed by all ages and skill levels. In tandem with the lagoon amenity, the exciting Sapphire Bay water activities will include not only surfing, but kayaking, stand-up paddle boarding, waterpark features with a lazy river, and private dining cabanas.  With an entertainment island featuring synchronized water and video displays, the lagoon amenity is envisioned to be one of the key attractions and differentiators to establish Sapphire Bay as a world class destination. The Surf and Beach Club will serve as the anchor for the overall public immersive experience. Consulting and management firm VenuBlue, which specializes in innovative beach life style destination attractions, will operate this component of Sapphire Bay.

Will the Crystal Lagoons amenity be open to the public?
Yes, the general public will have access to the 6.5-acre lagoon water feature.

Is Sapphire Bay a public-private partnership?
Sapphire Bay is a true public-private partnership. In a traditional development, the City’s involvement is limited to zoning the property, providing utility services, and making inspections. In this project, however, the City of Rowlett and Sapphire Bay Land Holdings I, LLC have committed to a vision and are obligated to executing that vision and realizing the parameters established in the development agreements. The City facilitated the original purchase of the property from the City of Dallas, annexed the property into the municipal boundary, rezoned the property with Form Based Code, created Tax Increment Reinvestment Zone Number Two (TIRZ#2), approved a public improvement district, drove a change in state law to qualify Rowlett for a ten-year tax rebate from the State of Texas for a new conference center, and championed improvements to  IH-30 to support the region’s growth and this project.

How does the funding for the Hotel Resort and Convention Center work?
The Hotel Resort and Convention Center is an integral part of Sapphire Bay.  Planned is a minimum 450- room full-service destination hotel resort and a minimum 70,000 square foot convention center containing conference, meeting and event space that is of the same resort quality as the planned hotel.

The City and Sapphire Bay Land Holdings I, LLC are working to determine the funding plan for the Hotel Resort and Convention Center by December 31, 2019. Once that funding plan is agreed to by both parties, the Hotel Resort and Convention Center, along with the Surf and Beach Club components, will be included in the first phase with an anticipated completion by December 31, 2023.

The funding plan as outlined in the Development Agreement between the parties indicates that the City will issue special revenue bonds for the cost of construction of the Convention Center facility and Sapphire Bay Land Holdings I, LLC will make the private investment to fund the Hotel Resort and the Surf and Beach Club.  It is anticipated that the Convention Center cost of construction would not exceed $50 million and the Hotel Resort and Surf and Beach Club private investment would be approximately $215 million.

The City’s issuance of special revenue bonds would be supported by the project tax revenues including State Hotel Occupancy Tax, State Sales Tax, State mixed beverage tax, Tax increment Reinvestment Zone (TIRZ) funds, and City Hotel Occupancy Tax.  Additional details will be provided once the City and Sapphire Bay Land Holdings I, LLC determine a funding plan by December 31, 2019.

What are the incentives provided by the City? 
Incentives include the creation of Tax-increment Reinvestment Zone Number Two (TIRZ#2) to help mitigate extraordinary development challenges and remove barriers to development. These include the costs associated with improvements to the future Dalrock Road overpass at IH-30, earthwork to elevate the site out of the flood restriction easement and construction of sea walls on the south side, offsite utility improvements, and parks, trails, public art and monuments. TIRZ#2 provides a contribution rate of 50 percent of all property taxes collected for a period of twenty years (through 2036) with the amount capped at $40.7 million plus interest. During this same twenty-year time period, the City of Rowlett expects to generate nearly $165 million in property taxes, sales taxes and hotel occupancy taxes. Upon full build-out (about 10 years), City taxes are expected to be approximately $6.4 million annually, net of the TIRZ#2 contribution, or equivalent to 12 cents on the tax rate.

How was Tax Increment Reinvestment Zone Number Two (TIRZ#2) bifurcated?
Tax Increment Reinvestment Zone Number Two (TIRZ#2) was bifurcated, or split between the north and the south parcels as part of the settlement agreement with Bayside Land Partners. As a result, 50 percent of all property taxes collected from the north parcel will be used to reimburse projects attributable to the north parcel and 50 percent of all property taxes collected from the south parcel will be used to reimburse projects attributable to the south parcel. The reimbursements are capped for each parcel.

How will the City be reimbursed for offsite utility costs?
The City, as outlined in the Development Agreement between the parties, will contribute an amount not to exceed $13.4 million for off-site public infrastructure improvements for five sanitary sewer projects and one water project.  The City is utilizing several sources to fund these projects, including water and sewer impact fee funds and water and sewer revenue bonds.  The City will be fully reimbursed for these costs from several sources including 1) state taxes (i.e. hotel occupancy tax, sales tax and mixed beverage tax) from the ten-year grant, 2) the Tax Increment Reinvestment Number Two (TIRZ#2) - South subaccount over the remaining life of  TIRZ#2 (through 2036) and, 3) City’s hotel occupancy taxes collected from the project.

Who did the City use to help evaluate the engineering, legal, economics and financial sustainability of this project?
Rowlett assembled a great team to help evaluate a myriad of issues including the legal documents and negotiations of the land transaction; the underlying market research and economic assumptions utilized by the new developer for the proposed land uses; and financial considerations of any potential financing for a new convention center. Our team included the following:

  • Hilltop Securities, Inc., municipal financial advisors
  • Stifel, investment banking company
  • MuniCap, Inc., public finance consulting
  • McCall, Parkhurst & Horton LLP, bond counsel
  • Catalyst Commercial, market research and analysis
  • Freese and Nichols, Inc., civil engineering firm
  • Grantham & Associates, Inc., civil engineering firm
  • Nichols, Jackson, Dillard, Hager and Smith, LLP, law firm
  • Locke Lord, LLP, law firm

How does Sapphire Bay benefit Rowlett citizens? 
Sapphire Bay is projected to add nearly $1 billion in new taxable value, resulting in nearly $165 million in revenue from property, sales and hotel occupancy taxes over a period of twenty years (through 2036).

Sapphire Bay will also offer residents an entertainment mecca without ever leaving their hometown! With amenities such as a lagoon feature housing an entertainment island and incredible synchronized water and video show; a hotel resort and convention center; a world class marina; and the Surf and Beach Club, Sapphire Bay will become a national destination for conferences, vacationing families, residents looking for a unique place to call home, and businesses who want to locate where their employees can live, work, and play - as well as for professional and amateur surfers who come to train at the only wave park of its kind in the world.

Sapphire Bay will help grow the City’s economy through diversification of jobs, housing, tourism and business opportunities, making Rowlett a community attractive to people in all stages of their life. Sapphire Bay will optimize Lake Ray Hubbard and Rowlett’s natural assets to create a distinctive identity and offer the quality of life long-desired by Rowlett residents.

Sapphire Bay Land Development News Release
August, 2019 Mayor’s Spotlight - Sapphire Bay

Sapphire Bay development rendering 1

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