Buda, MileStone still at stalemate over proposed Persimmon development

BUDA — Several citizens came forward to voice their concerns regarding the proposed Persimmon development at the regular Buda City Council meeting on Tuesday, Aug. 1 prior to a workshop and deliberation in an effort to establish terms for a development agreement (DA) with MileStone Community Builders.

“They’re living up to their moniker by bullying a city into a DA,” said local resident David Patterson.

“Don’t let them get away with it. Hold their feet to the fire on [the issues] … It’s going to cost all the citizens of Buda. It’s all about the bottom line. The builders and their agents aren’t going to live here and won’t have to suffer the change for years to come,” said resident Gerald Haschke to a roar of applause.

The meeting stretched on into the night, with dozens of citizens commenting against the development. After reconvening from executive session, no action was taken, prolonging the stalemate between MileStone and the city of Buda.

Terms of the DA

Council adopted a term sheet on Sept. 20, 2022, regarding the Persimmon development and tabled discussions about a DA on Oct. 18, 2022. Since then, the city has been in conversations with MileStone to negotiate the terms and the adopted term sheet was amended in March 2023.

Per the adopted term sheet, MileStone has declined the following terms of the agreement presented by the city:

• The project shall include a mix of residential lot sizes with the following: 30% of the project (Armbruster and Bailey) to be 55-foot-wide lots; 20% of the project (Armbruster and Bailey) to be 65-foot-wide lots; and 10% of the project (Armbruster and Bailey) to be 80-foot-wide lots. This term was amended in March 2023.

• The project will fully comply with the city’s tree mitigation requirements and the developer will reimburse the city for a city arborist to verify the tree survey as complete and accurate. Further, the city will consider approval of tree removal permits with the DA, provided that the developer submits the tree preservation plan for the project with the information listed in subsection 04.04.01.F.3.

• The city requests the second half of Garlic Creek Parkway be completed prior to the construction of 650 homes instead of 1,500 homes as indicated in MileStone exhibits.

• If Hays CISD does not purchase the 15 acres allocated as a school site within 10 years, that property must then be parceled into residential lot sizes of 80-feet at minimum.

• The city requests a 550 LUE reduction by reducing Residential LUE from the initial 2,800 units to 2,250 units for Buda and Austin extraterritorial jurisdiction (ETJ).

In exchange for agreeing to the above-mentioned terms, the city, in return, will:

• Consent to the creation of a public inmprovement district (PID).

• Consent to the creation of a tax increment reinvestment zone (TIRZ).

• Provide water and wastewater services to the entire project.

MileStone has accepted the city’s terms regarding other issues, such as eminent domain, roadway developments and more.

Workshop

Jeffrey Howard, a representative of MileStone, presented the development to city council at its regular meeting Tuesday, stressing that the project would bring 300 acres of the Austin ETJ property to Buda's jurisdiction. An updated site plan was also presented to council, addressing density and the amount of parkland allocated to the project. In addition, he outlined other issues, such as tree preservation, commercial and civic zoning, water supply and transportation. Howard then touched on the city terms that MileStone did agree to, such as eminent domain, roadway developments, annexation and more.

The proposed project timeline is as follows:

• Roundabout

• Phase 1 of subdivision     - 2024

• Phase 2 of subdivision

- 2025

• Garlic Creek Parkway (two lanes)

• East/West Connector

• 325 Homes

• Phase 3 of subdivision

- 2026-27

• Phase 4 of subdivision

- 2028

• Garlic Creek Parkway (four lanes) - 2028

“We hope after long and thoughtful consideration by everyone involved that we’re close. We think the benefits of a DA are so good for the city compared to the other alternatives. We hope we can close the gap for an agreement — and soon — because we’re needing to make some progress. The project needs to get going from our perspective,” Howard said. “There’s $60 million in transportation improvements, $40 million in city revenue over the course of construction and 100 acres of high-amenity parks.”

Following his presentation, council members were given the opportunity to ask questions.

Council members Lavonia Horne-Williams and Terry Cummings inquired about the tree preservation aspect of the development. A tree survey, which according to Howard’s estimate would take nine months and approximately $1 million, was a point of contention in the possible DA.

Council member Monica Davidson asked about the timeline of the transportation improvements, to which Howard said the roundabout would be built first, then two lanes of the Garlic Creek Parkway would be built in late 2025 or early 2026, “depending on construction time schedules, and then after that, we will begin to come back down on the Armbruster side, and what we’re showing for that is in the 2028 range when the remainder of Garlic Creek Parkway would happen,” he said.

Several members expressed apprehension regarding a development agreement with so many “uncertainties.”

“I have a couple of sticking points. I heard words like, ‘I’m not sure’ and ‘hope,’ so we can perhaps find a middle ground to find out what this looks like in a DA,” said council member Matt Smith. “I don’t like agreeing to uncertainty … But we are many steps from where we were last time.”

“We’re bringing in all this water and this development is going to use a lot of it. If we’re going to give you water, we’re going to have a say so and get closer to our wants and our needs to get this thing done,” said council member Paul Daugereau. “It may sound cliché that every time a developer comes up, you hear about water, but it’s real. We’re giving y’all everything we got, so we expect y’all to give us everything you got. We just need to pull closer together.”

“We’re down to looking at, ‘What is the dollar amount of benefits per home?’ to understand the TIRZ and the PID … I go back to what y’all are asking. Barton Springs Edwards Aquifer is going into drought stage IV. And we’re about a week away from that. BSEACD is 50% of our water supply. In all these slides, it shows things you agreed to, but what’s not discussed is what you’re asking. There’s a lot that’s being asked for and we’ve compromised on a lot,” said council member Evan Ture. “A huge one for us is this total number of homes. On that one, we also moved the line … But that’s all we can give. That’s what we’ve come to … I go back to each of these things we’ve asked for, which is much lower than the development revenues and that’s before we talk about the PID and TIRZ financing; I can’t imagine that this is not doable.”

“I’m not standing up here today under some false misunderstanding that y’all want 80-foot lots, but we looked at this and we analyzed it and we can’t do that. We also understand about the additional lanes, and I’m not standing here ignorant of how important this is,” Howard said. “We’ve looked at it and we’ve run the financial models. We need to sell some homes to help pay for this.”

“We thought long and hard about it. We put pencil to paper and we can’t get there. We understand what we’re asking for. Maybe we’re not neighbors, but we’re in your ETJ. We naturally look to you all to serve us, and if you can, we’re ready to come into the city and offer what we have,” he added. “We want to be full members of the city and we think that comes with some expectation of utility services. Our hope and our expectation are that you all will come back with a DA to put on the agenda in the very near future, understanding the feedback we just gave you.”

Finally, Mayor Lee Urbanovsky agreed, saying, “It’s a big ask,” referring to the transportation improvements, water demand and the tree ordinance. “From a term sheet standpoint, I don’t anticipate an agreement tonight,” he added.

After convening in executive session, Buda City Council returned to regular session and ultimately took no action on the item.

Moving Forward

MileStone CEO Garrett Martin said he was not expecting city council to take any action that night; however, the request is that they do take action as soon as possible, he said.

“I think they felt like they needed to verbalize some additional concerns and questions. Frankly, it’s a complicated project that’s been going on for a long time; it’s a lot of history,” Martin said. “The city staff has done a great job and has a clear understanding of everything that’s going on. I think the council just wanted to hear from us to an extent. So, we weren’t really expecting any action to be taken, but we are ready for them to take a vote and either vote up or vote down.”

MileStone, however, does not require a DA with the city of Buda to build Persimmon.

Following the passage of Senate Bill 2038, some landowners may be released from a city’s ETJ after filing a written petition. The city received such a letter on June 20, 2023, and the petition has been executed to be effective as of Sept. 1, 2023.

On June 5, MileStone also delivered a copy of a planned Municipal Utility District (MUD) — a financing tool that will enable MileStone to levy an additional tax on properties within the project to finance infrastructure improvements including utilities and roadway — petition to the Texas Commission on Environmental Quality for the creation of a MUD for the 459 acres in Hays County.

“We’ve been operating on a different path in tandem with trying to figure out things with Buda. And unfortunately, we’ve gotten to the point where we’re kind of at the end of our ability to run both paths at the same time,” Martin said. “How this plays out from this point forward is a function of what the council decides to do.”

The CEO said that the company’s engagement with the city of Buda speaks to its level of commitment in negotiating the terms of a DA.

“We’ve literally made hundreds and hundreds of changes to the project to get it as close as we can, while still making the project work to what the city’s asking for,” Martin added. “It sounds like the council recognized a lot of that effort. There were a number of positive comments that were made toward the efforts that have been made. And so hopefully, that, combined with all the recent changes to the legislature, is enough to get us to the point where we can move the project forward with the city of Buda.”