Facing the inability to pay $9 million owed for development of Plum Creek’s second phase, Kyle leaders approved an agreement that could take the city off the hook.
The measure, approved by a 6-0 vote Oct. 17, was done as part of an addendum to a development agreement between the city of Kyle, Mountain Plum, Ltd and Plum Creek Development Partners, Ltd.
Under the agreement, roughly $7 million Kyle was to reimburse developers for building future water and wastewater infrastructure in what’s being called the Uptown development in Plum Creek would be waived. The city would only be responsible for roughly $2 million in other infrastructure related costs and fees.
Scott Sellers, Kyle city manager, said when phase one of Plum Creek was developed in 1997, infrastructure was placed on the ground that Kyle couldn’t pay for at the time.
According to Kyle City Manager Scott Sellers, an addendum added to the development agreement between Momark and the City of Kyle would effectively waive $7 million of the money the city was obligated to pay.
He said Plum Creek’s developers installed infrastructure, which was then to be reimbursed by the city via impact fees over time as part of the development agreement.
Sellers said over time, the credit became close to 2 million dollars.
The city has since shown interest in developing what’s been called the Uptown area, which encompasses roughly 24 acres near the Hays CISD Performing Arts Center.
City staff first showed a concept plan of a governmental facility on 1.75 acres of land in the area two years ago.
Since that time, Plum Creek’s development has broken into two parts, with its residential areas being bought by Lennar, while the original owners retained the commercial portions and subsequently hired Momark for development purposes.
Sellers said now that Plum Creek is finalizing the second phase, impact fees from Phase One are due.
However, the city is currently unable to pay those back, Sellers said.
Additionally, future impact fees from Phase 2 would remain as an obligation, combining the total amount to $9 million the city would owe in order to fully develop Plum Creek.
According to Sellers, an addendum added to the development agreement between Momark and the City of Kyle would effectively waive $7 million of the money the city was obligated to pay.
Sellers said the terms within the agreement also stipulate that if the city does not develop on land dedicated to government property for a number of years, then it would go back to the family’s portfolio. In that case, the remaining $1.9 million the city owes would be waived.
“When the original agreement was drafted the city retained 24 acres of land within the Phase 2 development area that could be used for any city municipal purpose,” said Sellers.
While the city does not have a definite plan for building at this time, Sellers said if Kyle does happen to develop on the property within the allotted time, the $1.9 million would be credited back to the city for infrastructure use.
