HOUSTON -- Homebuilder Tom Rench, owner of Northland Builders, says a sluggish real estate market has delayed his efforts to build two upscale subdivisions in the city.

Rench in 2006 partnered with the City of Houston to buy 138 acres of city property in return for $451,000 and development requirements.

Rench on Feb. 27 told the Houston City Council that he still owes the city about $165,000.

Some of that is interest and late fees stemming from a council decision last July to let him postpone payments until January.

The soft real estate market made selling acre-plus properties near Loon Lake more difficult than expected, he said.

City leaders agreed to partner with Rench in 2006. At the time, council members said they wanted Rench's development to be an upscale addition to the city, both to prompt growth and to generate more revenue in property tax.

Rench in 2006 agreed to pay the city $451,000 for land he's since developed into two subdivisions.

In return for the land deal, Rench agreed to rebuild a part of Cheri Lake Road, bring a natural gas line into the city to reach the new subdivisions and make covenants for the new subdivisions aimed at reducing common city problems, such as trash being stored in yards.

Rench said he would create a homeowners' association to enforce the covenants and agreed to preserve a swampy portion of the property near Loon Lake.

Rench said he asked in 2006 whether the city had land for sale because he was looking for a few acres on which his two-man company could build a few houses. The 138-acre land deal was more work than he expected.

"It's been a struggle," he said.

But less than two years since the agreement was signed, much of what the city wanted is done or on the way, he reported.

The road, originally built outside its right of way, is now up to code. The covenants and the homeowners' association are set up.

Natural gas, however, is on hold pending home construction. Rench said he hopes to see at least two homes built there this year, which would be enough to spur the gas line along.

And on Thursday he presented the City Council with the deed to 11 acres of wetland property at the end of Loon Lake.

City Council members said they appreciate the update and hope to hear more from Rench as development progressed.

"It seems like you've come a long way," said Councilman Lee Himes.