AUSTIN -- Austin's city limits are expanding south. The 600 acres off I-35 South and Toll Road 45, known as Estancia Hill Country, were just south of the city line. That was until Thursday when the city council voted to annex the property.
"We recently completed the Imagine Austin Comprehensive Plan last year, and this was an area identified as a growth note," said City of Austin Planning and Development Review Manager Jerry Rusthoven.
In fact, the council was ready to claim the land in December but held off to work out a deal with the developer.
"We were going to do a quality development no matter what, but with this new agreement with the City of Austin, we can do it a lot faster," said Steve Sanders, senior vice president of Texas for Stratford Land Company.
Stratford Land Company officials asked the council to hold off on full annexation so it could sell Public Improvement District, or PID, bonds to pay for the construction rather than obtaining a traditional loan. Fees future homeowners pay will be used to pay back the bonds
"Limited purpose annexation allows us to float the bonds, have the taxes pay for the bonds versus asking the City to come put all the roads and water and sewer here, which they really don't have the budget to do," explained Sanders.
The council agreed to limited annexation, meaning it will not collect city property taxes on the land for 15 years.
"What the City receives in return for consenting to the agreement is the city council is actually the board of directors for the PID. So the sell of the bonds is up to us. We have to authorize the sell," explained Rusthoven.
The Austin City Council will also be able to ensure that development on the land follows city code. The City also gets a Planned Unit Development, or PUD, for the property. That means the developer has to set aside city land for fire station, Capital Metro transportation station, parks and trails.
Some Austinites have asked if the City is really getting a good deal by not collecting property taxes over those 15 years. City staff estimates they would have collected about $5.5 million over 15 years in property taxes. The waste water lines would have cost $2 million to construct. The land for the fire station is valued at $300,000. The Cap Metro transportation station would cost $1.5 million, and the parks and trails would have cost the city another $2 million, making the total cost $5.8 million. So city staff says it's actually coming out ahead by $300,000.
Construction on 400 homes in the are is set to begin by the end of 2013.
"We're going to have a significant amount of single-family housing, office buildings, retail, medical office, some multi-family," said Sanders.
The entire development should be complete by 2020.