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

February 2nd, 2010
Appeals court deals setback to BudaFirst

020210budafirstClockwise from left, Hays County Judge Liz Sumter, BudaFirst’s Stahl Urban, Hays County Precinct 2 Commissioner Jeff Barton and BudaFirst’s David Patterson (back to camera) discuss the US Foodservice matter at a commissioners court meeting. Photo by Sean Batura.

By SEAN BATURA
News Reporter

Buda residents wary of more industrial development than allowed by the city’s master plan and opposed to the construction of a 500,000-square-foot US Foodservice facility suffered a blow dealt by the Texas Third Court of Appeals Monday.

The court denied a rehearing for residents who want to have a city election to decide whether to repeal a city council land use change that allows light industrial uses within 95 acres of Buda extraterritorial jurisdiction (ETJ), a zone originally planned for only commercial, office and retail uses. The land use change makes possible the building of the US Foodservice facility in the Sunfield Municipal Utility District (MUD) located east of Buda.

Following the decision, David Patterson of BudaFirst, which has fought the US Foodservice facility, vowed to take the fight to the ballot box. Patterson said the group will see to it that Hays County Precinct 2 Commissioner Jeff Barton (D-Kyle) fails in his bid to unseat incumbent Hays County Judge Liz Sumter (D-Wimberley) in the March party primary.

Further, said Patterson, all Buda City Councilmembers except Ron Fletcher and Sandra Tenorio can expect hard times on the way to re-election. Tenorio and Fletcher have voted with BudaFirst on the land use issue, while Sumter cast the only vote on the Hays County Commissioners Court against reconstructing CR 118, which US Foodservice wants improved to accommodate the truck traffic to and from the facility.

“BudaFirst — we’re going to deliver an election this year,” Patterson said. “BudaFirst is not going away. We are going to maintain our contacts. We have 600 email addresses, phone numbers, and a lot of those people are pissed off … My sense is that the people are upset because we have rules in place, and we decided in the master plan that the most important thing was to keep the charm and character of Buda as much as possible as growth came. You can’t stop growth, but you can manage it. Kyle still doesn’t even have a master plan. And look at the mess they’re going to be in. Drive the Kyle Parkway sometime between 4 p.m. to 6 p.m. and try to cross that parkway. Buda is putting stuff in place to keep slightly ahead of the growth.”

Funded by the members of the Herman Heep family, which owns land holdings near the site, BudaFirst formed last summer to oppose the land use change. Hoping to put the matter to a city vote, the group gathered 788 signatures, exceeding the city charter’s requirement that 20 percent of the registered voters must sign a petition to trigger a referendum.

However, Buda’s city attorney advised councilmembers that the land use change is not subject to referendum, and the council voted, 6-1, in September to disallow the election. Councilmember Sandra Tenorio cast the lone vote in favor of allowing a referendum.

In October, Former Buda Mayor Jim Hollis and Buda realtor Christopher Juusola filed suit in the Third Court of Appeals to prevent the US Foodservice facility from being built until residents could vote on whether to reverse the land use change.

Neither Hollis, Juusola, nor their attorney, Terrence Irion, were immediately available for comment. Patterson said key individuals from BudaFirst will confer with Irion to decide whether to appeal to the Texas Supreme Court.

On Nov. 19, a three-judge Texas Court of Appeals panel ruled that the council’s land use change was not a referendable action because it was “not legislative in character,” and because the development agreement between Buda and the MUD, amended by the land use change, is “temporary” in nature. A 1976 court ruling established the precedent of legislative actions being permanent in character.

“We don’t believe there is anything temporary about designating a land use modification that will result in the construction of a permanent industrial facility,” Irion said recently.

The land use change constituted the third amendment to a MUD consent agreement, the parties to which are Buda, Sunfield MUD No. 1 and 2428 Partners, LP. An agreement between the city and the MUD allows the city to dictate land use in the MUD. 2428 Partners owns most of the land in the MUD, an entity created by the state legislature years ago to build roads, provide water, wastewater and drainage services.

The third amendment is essentially an update to a land plan created by the second amendment to the MUD consent agreement. The MUD is governed by a four-member elected board. One person voted in each district in the last two elections, though at least 90 people now live in an apartment complex in the MUD and may vote in later elections. The property tax rate within the MUD is 90 cents per $100 of taxable valuation.

Opponents of the council’s land use change said the addition of light industrial uses will lead to more pollution and less tax revenue for the city. But former Buda Planning and Zoning Commission (P&Z) member Rahm McDaniel said commercial uses for the area would entail a great deal more traffic than industrial uses. City staff and US Foodservice officials said additional truck traffic caused by the facility would be negligible. Proponents of the land use change say the city would benefit greatly from the 157 jobs in 10 years US Foodservice said it would create. US Foodservice said it pays its warehouse personnel and truck drivers anywhere from $45,000 to $55,000.

A limited purpose annexation agreement between Sunfield MUD No. 1 and the city allows the city to collect sales taxes within the MUD, though the city cannot collect property taxes there. Sunfield project manager Mike Boswell said Tuesday that it is too early to determine many residents the development will accommodate, though he said “thousands” may live there eventually. The only residents of the 2,800-acre Sunfield development — which includes four MUDs — now live in an apartment complex, in which there are at least 95 occupied multi-family units.

Buda has a population of about 6,900 people. No residential lots have yet been sold in the development, and the MUD is unlikely to pay off its bond debt before 2037. Fletcher recently estimated that the 95 acres of land to which the council added “light industrial” zoning could have accommodated “two or more” big box stores. Boswell said Tuesday that 348 lots in the Sunfield development have been prepared but not sold.

Buda’s annual sales tax income increased from $774,000 to $1.4 million immediately after Cabela’s opened in 2005. The city’s sales tax revenue increased to $2.3 million after Wal-Mart opened near Cabela’s a year later. In August, Buda City Manager Kenneth Williams said the US Foodservice facility would bring $100,000 in sales taxes annually to the city. US Foodservice Austin division President John Fowler said on Aug. 4 that the facility would generate $2.7 million annually in ad valorem and sales taxes within two years.

US Foodservice spokesman Howard Falkenberg said property tax revenue generated from the US Foodservice facility will depend on the “timing of construction completion, fluctuation in tax rates year-to-year, and changes in property assessments.”

Patterson said the Heeps’ plans for the area would be better for the region than more light industrial uses.

“Sometime, look at the plans that they were going to do,” Patterson said. “It was going to be two amphitheaters, world-class restaurant, small luxury hotel and spa, multi-million dollar homes overlooking Onion Creek, small subdivision, and all of that property tax and sales tax — you know where that would have gone? Right here, right to Buda.”

Patterson said the developers of the Heep plans would likely want to create a Tax Increment Refinvestment (TIRZ) to pay for infrastructure improvements — similar to that put in place for Cabela’s — with the condition that the Heeps allow the city to annex their development, so the city would get the property taxes.

Heep Ranch Properties is owned by Kathleen Adkins. Adkins and Betsy Urban are granddaughters of the late rancher Herman Heep, who established a large spread straddling the line between Hays and Travis Counties lying mostly on the east side of Interstate-35 near the Sunfield MUD.

Heep Properties controls more than $7.7 million in Buda-area property, some of which is located near the proposed US Foodservice facility. Carl and Betsy Urban possess more than $700,000 in Buda property, some of which is located near the proposed facility.

Patterson said that if the US Foodservice facility is building, the prospective financiers of the Heeps’ plans will shy away from funding a development close to an industrial zone.

Patterson said Adkins spent possibly $1 million to pay land developers to do a master plan of her property that would feature a highly walkable environment, similar to Mueller Airport, he said.

“This industrial park designation is directly across the street from her property, and if it goes in, she will have wasted that (money),” Patterson said. “People want to point out that it is just two big property owners. Dammit, she spent possibly over $1 million when the rules were this: there could only be retail, residential retail/commercial. That was all there could be in that MUD, and they had agreed to it. So here is somebody, in good faith, preparing a development that would make Hays County proud, and if the (US Foodservice facility) goes in, they’re probably going to drop that plan.”

Hays County commissioners court members voted 4-1 on Aug. 4 to draft a TIRZ agreement whereby the county could fund $1.8 million in road improvements using ad valorem taxes collected within a specified boundary encompassing at least the proposed US Foodservice facility.

US Foodservice offered to pay the difference if the property taxes generated within the zone over a certain period of time are not sufficient to pay for the debt on the roads. No TIRZ agreement has yet appeared on the commissioners court’s agenda. CR 118 is to be renamed Firecracker Drive.

“(US Foodservice) will not purchase the land until all entitlements are in place and I don’t have a schedule for that,” Falkenberg said Tuesday.

The US Foodservice regional headquarters and distribution center is proposed for construction on about 40 acres near the intersection of Turnersville Road and CR 118.

“US Foodservice is continuing to prepare for the project and awaits completion of the traffic impact analysis (TIA) process that has been undertaken by Sunfield MUD and the City of Buda,” Falkenberg said. “Once the TIA is completed and accepted by the city, the company (as well as other users and developers in the MUD) will be able to take next steps toward permitting their construction project.”

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4 thoughts on “Appeals court deals setback to BudaFirst

  1. Without comment of the merits of BudaFirst’s argument, I will say that a man with a list of voters and the will to use it is a dangerous enemy to any elected official.

  2. Shame on the city “leaders”

    So when are the Buda City Council elections? Who is running? Where do I vote?

  3. Pingback: QUOTE CORNER - San Marcos Local News

  4. This is typical of other articles by Sean Batura–well researched and informative. This is the role that the media is supposed to play under democratic theory, which is to inform the people so they can make wise decisions based on all the facts. This is the first account that I have read spelling out the “opportunity costs” associated with US Foodservice’s relocation to the Sunfield MUD.

    My votes were not anti-US Foodservice, instead they were pro-Buda’s comprehensive plan. Comprehensive plans are like presidents–not all of us like the one we’ve got, but we all have the same one, and just one at a time. I voted against attempts by a newly hired set of out-of-town developers to create a new industrial park in an area not scheduled for industrial uses under Buda’s comprehensive plan. They won, and it may just cost Buda some highly desirable future development that would have been consistent with our comprehensive plan.

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