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Staff seeks to delay annexation of Estancia tract in south Travis County

Thursday, January 17, 2013 by Michael Kanin

City staff will ask Council members this morning to delay the annexation of 619 acres in southern Travis County near the intersection of I-35 and Onion Creek Parkway. The region, known as the Estancia Hill Country/Wunneberger-Strange area, is the subject of negotiations that could also create a Planned Unit Development and a Public Improvement District for the area.

 

A delay in action in the case would give officials with the city’s Planning and Development Review Department and developers of the mixed-use Estancia Hill Country project roughly six months to work out a deal that would put off annexation for at least 15 years.

 

In exchange, developers would offer a host of development concessions. Even so, Council Member Kathie Tovo wondered whether a deal would be worth it. “I guess I’ll just express concern that (this) doesn’t seem to be a great deal for the city,” she said.

 

As In Fact Daily reported in July 2011, the Estancia Hill Country project could be the largest new development in the southern portion of the Austin I-35 corridor. It was acquired in 2007 from land that used to be part of the Heep Ranch. (See In Fact Daily, July 7, 2011.)

 

According to Planning Manager Jerry Rusthoven, attorney Steve Metcalf asked the city on behalf of development clients to postpone annexation of the region. Instead, Metcalf sought the creation of a PUD.

 

That option would be an alternative development approach – one that would leave the region in Austin’s extra-territorial jurisdiction, but outside of the city. Not bound by traditional development standards, PUDs have frequently caused controversy.

 

In this case, a PUD would be prelude to a Public Improvement District. A PID has bonding power, and could issue revenue bonds to support infrastructure improvements. However, if annexed, residents of the PID would have to pay both fees based on the PID bonds, as well as taxes associated with Austin residency – a none too rosy prospect.

 

Metcalf initially asked for an annexation delay of 30 years. Staff balked at the idea. Since, the annexation has had one reading before City Council. The developers have also submitted an application for the PUD.

 

Though staff is not completely ready to sign off on an agreement that might create the PUD – and delay annexation – Rusthoven said that such a deal could be within sight. A revamped version of an agreement would delay annexation for 15 years – half the time initially requested by the developers.

 

Indeed, Rusthoven is set today to bring forward a development agreement that captures what the city and Estancia developers have already agreed to in negotiations. This includes substantial concessions for affordable housing, watershed and drainage, green building, and parkland, among other features.

 

As part of the agreement, Rusthoven’s team and developers would have until late-June to finalize an agreement. If none can be reached, the city could still proceed with annexation.

 

Rusthoven noted that the request for additional negotiating time was a reflection of the fact that what his department “had heard from Council when we were doing the public hearings was a desire for us to continue to talk.”

 

Still, Tovo was skeptical. She referenced a staff memo that offered Council Members a run-down of the situation. “The memo seemed pretty conclusive that the items that are being offered…are not of significant enough financial value to the city to warrant not annexing this tract,” she said.

 

Rusthoven noted that a change in terms since the publication of the memo – specifically the decrease in an annexation delay and the increase in value of some developer concessions – warranted further negotiation between the parties.

 

Even with staff support, Council members could chose to continue with annexation proceedings today. Both an item that would finalize that approach and one that would enter into the development agreement are on the agenda.

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