San Marcos Mercury | Local News from San Marcos and Hays County, Texas

July 13th, 2009
Tension mounts in US Foodservice bid for Buda

The US Foodervice facility would be located east of Buda in the Sunfield MUD.

By SEAN BATURA
News Reporter

Spurred by fears of reduced sales tax revenue, more traffic congestion, increased air pollution and overuse of water, some Buda residents are trying to derail plans for the construction of a $50 million US Foodservice, Inc. regional headquarters and distribution center in Buda’s extra-territorial jurisdiction (ETJ).

Construction of the facility also hinges on whether Hays County Commissioners decide by Aug. 3 to spend $1.75 million to widen and improve Turnersville Road and County Road 118 to accommodate the 496 additional vehicles per day entailed by the US Foodservice facility.

US Foodservice said the facility should generate $2.7 million annually in property taxes and 157 new jobs during the next decade. The company said the facility would initially employ 254 people, with its jobs paying a mean weighted average of nearly $59,000 per year.

The Buda City Council will decide Tuesday if it will allow a November referendum enabling voters to allow or deny a land use amendment Buda councilmembers recently granted to Sunfield Municipal Utility District (MUD). Supporters of such an election have indicated they will seek a court order to allow the election if the Buda council votes against it.

The land use amendment would allow 95 acres within the MUD’s jurisdiction to be zoned as light industrial to accommodate the US Foodservice facility.

“The 95 acres, were it left in its original usage, would project $700,000 to $900,000 in retail sales taxes going to Buda,” said Buda resident David Patterson, former Buda Economic Development Corporation member. “Buda is going to receive approximately $100,000 in sales taxes … We get the traffic, the pollution and the noise. The county makes out like a bandit, the school system makes out like a bandit. Twenty-eight percent of Hays County students come from Buda — it’s a good thing for the school system. It’s not a good thing for Buda. We’re not going to get much sales tax. If it stayed the way it was, we would.”

US Foodservice would locate its facility on 40 of the 95 acres on the corner of Turnersville Road and CR 118. US Foodservice Representative Howard Falkenberg said the California Public Employees’ Retirement System (CalPERS) controls the land, though county records indicate 2428 Partners LP is the owner.  Records indicate more than $14 million worth of property in Hays County is owned by 2428 Partners. Falkenberg said a provision of the purchase agreement between US Foodservice and 2428 Partners LP requires US Foodservice to secure county support for the road improvements before the land deal can be closed.

In March, two months before the last city council election, Buda councilmembers voted unanimously to deny Sunfield MUD’s request for a land use amendment, which called for a land plan designation of light industrial to replace the retail and commercial use specified by the city’s master plan. The master plan was developed and approved in 2002 based on surveys of Buda residents and input from a consulting firm hired by the city. The land use amendment granted by a 5-2 vote of Buda councilmembers to Sunfield MUD on June 2 preserves the retail and commercial land use designation and adds light industrial, in addition to restricting the first 300 feet of frontage along Main Street to commercial, office and retail uses.

US Foodservice Austin Division President John Fowler said a traffic analyst with whom his company consulted concluded additional traffic caused by the proposed 500,000-square-foot facility would be negligible. Fowler said most heavy trucks would travel to Austin, with less than half heading southbound to Interstate-35 via Main Street.

During last week’s Hays County Commissioners Court meeting, Hays County Judge Liz Sumter asked Fowler why his company did not seek to build its facility in the area already designated for industrial purposes.

“Reasons had to do with the ability of trucks to make turns out of where the building would be located, (and) how the building had to be faced,” Fowler said. “Multi-unit housing is built down there in close proximity. We avoided those opportunities to be close to any type of housing … We looked at not only what was in Buda, we looked at everything in Northern Hays County.”

Patterson said he worries the refrigeration system used at US Foodservice’s prospective facility may require more water than can be spared. Sunfield MUD has not applied for a permit to pump groundwater, though it has contracted with the Guadalupe Blanco River Authority to provide about 4.5 million gallons per day of surface water. Sunfield MUD was created to support a 2,700-acre master-planned community including 348 single-family lots, 180 multi-family units and approximately 63 acres of commercial land.

US Foodservice is proposing the county set up a tax increment finance (TIF) zone for 15 years to finance the road improvements, meaning increases in county tax revenue caused by the presence of the Foodservice facility would be used to cover road costs. US Foodservice has agreed to pick up the difference if the 15-year TIF is not sufficient to cover the costs of improving the roads.

US Foodservice has been cleared to receive $750,000 in Texas Capital Fund grant money from the US Department of Agriculture, provided the company can insure that 51 percent of its new hires qualify as low and moderate income persons three years after construction.  If it cannot meet that requirement, US Foodservice will have to pay some of the grant back.

“There seem to be some legitimate local community concerns and also some private interests as well (troubled about the prospective US Foodservice facility),” said Hays County Precinct 3 Commissioner Will Conley (R-San Marcos) at the Tuesday commissioners court meeting. “From where I’m sitting in my capacity as commissioner of Precinct 3, it looks like a very good deal and something that I would be supportive of, and I’d like to see more of these types of companies in Hays County.”

Fowler said US Foodservice would make its facility Leadership in Energy and Environmental Design (LEED) certified and would take measures to reduce carbon emissions and maximize fuel economy. US Foodservice was certified by the EPA Star Seal program in 2009, requiring it to construct buildings that score within the top 25 percent of its industry on energy conservation. Fowler said his company would institute recycling and other sustainability-related measures at its proposed Buda facility. In his presentation before the commissioners court last week, Fowler revealed that his company donated $11,000 to local causes and donated more than $4 million in food and financial support to Feeding America, the nation’s largest food bank network. Conley said US Foodservice expressed interested in donating resources to the Hays County Food Bank.

Conley said a limited amount of time exists in which Hays County can make itself attractive to new businesses.

“If we miss that window, I’m not sure that Hays County will get another real good opportunity for decades to come,” Conley said. “So, I caution my colleagues. Think of the bigger picture.”

Hays County Precinct 2 Commissioner Jeff Barton (D-Kyle) said the commissioners court will decide in the next few weeks whether to improve Turnersville Road and County Road 118. In addition to a favorable legal opinion from the City of Buda, opponents of the land use change need 670 signatures before a November referendum on the issue can be held. Falkenberg declined to indicate whether his company would seek another site for its facility if the referendum were granted.

“Out of respect for the city and its processes and respect for the county and its deliberation, we want to give this situation time to develop further and for everybody to reach their own conclusions before we would do anything that might add to the pressure of the situation,” Falkenberg said.

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0 thoughts on “Tension mounts in US Foodservice bid for Buda

  1. Pingback: Tension mounts in US Foodservice bid for Buda : Newstreamz San Marcos | Distressed Marketplace

  2. Sean, thanks for the coverage. For everyone’s information, that “496 additional vehicles per day entailed by the US Foodservice facility” would be AT FULL BUILD-OUT IN 10 YEARS, by which time many roadway improvements in the area will have been completed.

  3. “The company said the facility would initially employ 254 people, with its jobs paying a mean weighted average of nearly $59,000 per year.”

    I’d sure like to see something like that a little further south, in San Marcos. $1.7 million to widen a road and bring in those kinds of jobs sounds a lot more appealing than $5 million (or any number), to bring in a few hundred jobs at an average of $17,000 or so.

    I’d be interested to hear more about the water usage and what options are available to limit it.

  4. Has this deal required a “local opportunities” clause for the construction of the facility, or will US Foods bring in their Contractors from up north that typically design and build their facilities. With the given economy and how local contractors are being affected, I would hope the county and city would try to employ as many locals throughout the process (to include construction).

  5. This all sounds “good”, but most of the residents of Buda do not want this zoning change. The truck traffic would be trenmendous, and this is the gateway into Buda. There is already land zoned for this use in South Buda, with a truck bypass already built. The City of Buda will be sued by its residents if this goes through.

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