By Andy Sevilla.

Developers of the Plum Creek neighborhood in Kyle are ready to advance with the second phase of development, which would include 2,000 multi-family residential units and more than 1,500 single-family homes.

First, though, the landowner is seeking Kyle City Council approval for the implementation of a Public Improvement District (PID) over the area to finance the construction, according to a presentation by the developers at last Tuesday’s regular council meeting.

A PID is an economic development tool created by the state of Texas that allows developers to sell bonds to finance public improvements on their property, secured by a Special Assessment Lien on the land within the district, according to the developer’s presentation.

The debt incurred through PID bonds would be paid for through an assessment charged annually to homeowners within the district. The developers estimate the estimated PID Bond annual assessment payment per home would total between $504 and $743 annually for the life of the PID.

That amount is on top of any city, county and school taxes. The developer has the obligation to pay the debt service until the land is sold, the presentation stated. 

The PID bonds would be city of Kyle bonds, though city tax revenues would not secure them. The bonds would only be secured through the land within the PID and would not reduce the city’s bonding capacity, according to the presentation.

“It really doesn’t cost the city anything,” said Steven Metcalfe, legal counsel to Plum Creek Development Partners, Ltd. “It does take some administration by the city, but it doesn’t affect the city in any kind of financial way.”

“It doesn’t affect your tax base,” Metcalfe told council members. “All the city taxes will still come to the city. All the sales taxes will still come to the city. It doesn’t affect any of that, really it’s just a funding mechanism that allows infrastructure to get on the ground quicker and doesn’t burden the city.”

The minimum total debt of the Phase 2 expansion is estimated at $90 million, with the maximum total debt at $150 million, according to the presentation. That funding would be acquired through PID bonds to finance several projects including, regional, arterial and internal roads; storm sewer, wastewater and water distribution systems; FM 1626 and Kohler’s Crossing roundabout and pedestrian underpasses; and a Lone Star Rail Station, among other things, the presentation stated. 

“We want to continue and accelerate the vision that is Plum Creek,” said Peter French of Plum Creek Development Partners. “I’m just going to cut to the chase ... at build out, Plum Creek’s total projected tax base will exceed $2 billion. We’d like to get to that number sooner rather than later, and we think you guys would too.”

According to the developers, the estimated PID Bond annual assessment payments will be structured to pay 100 percent of the annual debt service on the bonds. Only the landowner will be responsible for the annual assessment payment and that obligation will be made known and certain at the time of purchase, according to the presentation. Existing Plum Creek homeowners will not be responsible for the debt service payments. 

The second phase of the Plum Creek development spans over 1,180 acres and in addition to the residential homes mentioned earlier, will include up to 3.4 million square feet of office and industrial space; up to 750,000 square feet of retail space; multiple parks, miles of trails and other community amenities; a Hays CISD elementary school; a fire station and a police substation; and a LSTAR commuter rail station, according to the presentation. 

The project is set for development in multiple phases with final construction expected in 2037. 

The project’s developers estimate the 30-year total gross fiscal impact to the city at $310.5 million, in property and sales taxes and in recurring and non-recurring fee revenues. 

At the Oct. 18 meeting, council members directed staff to consult with the city’s bond counsel to seek advice on potential approval of the proposed PID. 

 “Since costs associated with consultants and similar professional fees are typically charged to PID bonds, it is extremely difficult to determine this early in the process if the PID will be approved for the Plum Creek planned development,” City Manager Lanny Lambert wrote to the developers in an Oct. 24 letter. 

“Accordingly, the City is hereby requesting the Plum Creek Development Partner forward a check made payable to the City of Kyle in the amount of $10,000 to be applied toward costs associated with bond counsel, financial advisor, and any other experts that might be necessary to advise the City Council,” he said.