Gov. Greg Abbott signed into law a new bill that targets the business structure behind the planned Muslim-centric EPIC City project in northern Dallas-Fort Worth.
Abbott signed House Bill 4211 on Thursday, and the new law takes effect immediately. The bill’s primary author, Rep. Candy Noble, R-Lucas, said the legislation aims to protect investors who purchase ownership interests in a development.
Andrew Mahaleris, a spokesperson for the governor’s office, said Abbott was “proud” to sign the legislation to “defend our communities from any threats posed by EPIC City or other entities seeking to create a discriminatory or illegal compound.”
Community Capital Partners, the for-profit entity established by members of the East Plano Islamic Center to oversee the project, has repeatedly said it will adhere to the Fair Housing Act, as well as all other applicable state and federal guidelines. The community will be open to members of all religions.
D-FW Real Estate News
It’s unclear if or how the bill may change the project. Attempts to contact the development group before publication were not returned.
The new law requires business entities to inform buyers that they are purchasing an interest in the business and not in any residential property itself.
The business may not charge a fee or receive proceeds if an investor sells the share.
EPIC City would also not be allowed to use religious organization exemptions in state law.
Homes on lots within parcels larger than 25 acres aren’t eligible for the exemption, meaning the developer couldn’t limit the sales to members of a certain religion.
Community Capital Partners hopes to build more than 1,000 homes, a K-12 faith-based school, a mosque, elderly and assisted living, apartments, clinics, retail shops, a community college, and sports fields on 402 acres in Collin and Hunt counties.
Additional related neighborhoods, EPIC Ranches One and Two, are planned on 200 acres nearby. A website for the planned EPIC Ranches development is no longer operational.
The sites are about 30 miles northeast of downtown Dallas.
EPIC City investors must be classified as an accredited investor under U.S. Securities and Exchange Commission guidelines — meaning they must have a net worth of over $1 million and an individual income of $300,000 or a household income of $300,000 over a period of time, according to documents published on the group’s website.
The first deadline to deposit funds was April 2024. Shares are still available for purchase.
Lot prices help Community Capital Partners cover the cost of the land purchase and the development of roads and utilities, a mosque, schools, and parks.
If Community Capital Partners doesn‘t develop EPIC City, the land will be sold and investors will be refunded, according to investor documents.
“Is it a timeshare? Is it a co-op? Is it a MUD [municipal utility district], a PID [public improvement district] or an HOA [homeowners association]? The answer is — it seems to be a little bit of all of those, and technically, none of them,” Noble said of Community Capital Partners during a legislative hearing about the bill. “What‘s not clear is whether investors actually own the land or just have access to it to build on it.”
Representatives for the development group previously said the law is not necessary.
Representatives for Community Capital Partners told The Dallas Morning News last month that investors will own the land when the lot is purchased. The firm would not block the sale of a home in its community.
Future residents have five years to build a house once they take possession of the lot. They can use a list of approved builders or seek approval to use a custom builder, according to investor documents.
In a question-and-answer segment published on Community Capital Partners’ YouTube account in April, firm president Imran Chaudhary said investors could transfer their shares but only with the firm’s approval.
However, Community Capital Partners said last month that it needs to monitor any transfers to ensure state and federal rules are followed, but the firm wouldn’t limit private transactions.
“Because the offerings of units in the partnership was an offering of securities in a private transaction, federal and Texas securities laws require issuers to monitor to whom they make sales so that those buyers do not subsequently syndicate the interest they have bought, conduct a public offering, and, therefore, cause CCP to violate the private placement rules,” spokesperson Erin Ragsdale said in a previous statement. “However, CCP has no desire to and will not limit the subsequent transfer of interests to other individuals in truly private transactions.”
The EPIC City project has drawn social media backlash and a series of government probes.
State officials have opened at least five investigations tied to the East Plano Islamic Center or the planned development under Abbott’s direction. The U.S. Department of Justice launched a civil rights investigation into the project last month.
The EPIC City project is not under development. Plans for the development haven‘t been submitted. A traffic impact analysis, flood study and environmental study of the site have been completed.