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

February 25th, 2010
Council to take second look at $610K apartment grant

022510plazaAn image of how The Vistas at San Marcos would look on completion. Image from the City of San Marcos.

STAFF REPORT

An incentive of as much as $610,000 for a downtown apartment complex is back on the San Marcos City Council agenda next week after the council deadlocked on the matter last week.

The applicant, 401 North Fredericksburg Acquisition, LLC, is asking for five years of property tax rebates to demolish an old building and construct the apartment complex in the city’s central business district between Fredericksburg and Comanche Streets and between Lindsey Street and Pat Garrison Street.

The project, called The Vistas at San Marcos, would include about 200,000 square feet with 593 beds in 257 units. The complex would employ five people full-time at an annual payroll of $208,000, according to a city staff memo to the city council.

The matter was neither approved nor denied in a 3-3 vote at last week’s city council meeting. Mayor Susan Narvaiz voted with Councilmembers Kim Porterfield and Fred Terry in favor of the proposal. Councilmembers Gaylord Bose, John Thomaides and Ryan Thomason voted against it. Councilmember Chris Jones abstained.

The item had been on the consent agenda before Thomason asked to have it pulled for discussion in open session. Thomason said future developers in the neighborhood are likely to ask for incentives if the council were to grant incentives in this case.

“I believe it’s moving forward whether we support it or not,” Thomason said, explaining his opposition to the grant. ” … It starts a bad precedent and creates a negative competitive advantage.”

The staff memo to council said the developer would spend $950,000 on the project to obtain Leadership in Energy and Environmental Design (LEED) certification. The developer would spend another $775,000 for street improvements, including underground burial of cable, telephone and electrical lines, new sidewalks and landscaping, among other features.

The staff memo to the council said the development “supports the City Council’s goal of Smart Growth by creating a walkable community near multiple amenities such as Texas State University, Downtown, Entertainment, Shopping and Restaurants. The development would also include elements that support the goal of beautifying San Marcos with landscaping and aesthetics.”

Under the proposal, the city would rebate a portion of the added property tax collection from the property improvements back to the developer for five years.

The staff memo said the city presently collects $12,194.00 in property taxes on the 2.7 acres and would, even with the rebate, collect $29,107.00 per year after the improvements.

The facility would be scheduled for completion on or before Aug. 15, 2011.

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16 thoughts on “Council to take second look at $610K apartment grant

  1. It is good to see that Thomason is living up to his name as a fiscal conservative. Good job Mr. Thomason. Now, just vote against it again and we will all be happy when it fails! The really stupid thing is that I have heard the developer has already applied for and recieved some of his/her permits! Once you get a permit, you are not going to back out just becasue the city does not succumb to your request of tax abatement.

  2. This is really worse than the 2.5 million dollar give away for Spring Town. In my wildest imagination I would never have thought that the City would give six hundred thousand dollars to a developer to help build another apartment complex next to TSU. This project should live or die on it’s own financial viability. This is City government gone wild. An apartment complex only generates two or three jobs and they are not well paying jobs.

    I am leaving town for a week an can not attend the Mayors “Development Meeting” so please, everyone possible needs to go to this and tell the Mayor to stop this kind of nonsense.

  3. LEED Certification should not cost $950,000 for that project. It gets a lot of its LEED points just based on location alone.

  4. There is more to economic development than simply job creation. The City is getting an eyesore removed, and a viable business in its place. Not only that, but it is a business that supports the City’s master downtown plan. Property tax revenues generated by that location would increase 2 1/2 fold.

    If you say “no” to everything that comes along, you’ll soon be left with nothing….

  5. This one doesn’t cause me near the heartburn that Springtown does. Downtown redevelopment is always more difficult–the City of San Antonio has eliminated nearly all development fees for downtown properties for that reason. Downtown residential is still a largely unproven concept in the world of real estate financing, even when it is a sure thing like college housing. With this, the private property owner is getting an incentive to address those difficulties, and the city still gets a net increase in collections even after the rebate (this is an important difference compared to the Draft House proposal).

    I’m not saying this is a good proposal yet (at a minimum, it sounds too high), but I’m willing to listen. Funding this is more of a philosophical issue than a financial issue, given that the city is still getting some opportunity benefit. We should keep in mind that the project already received significant density bonuses, parking concessions, etc. through the PDD. Dano makes a very important point that incentives are not ALL about job creation. A strong residential presence in downtown makes a huge difference for downtown economic development. Every city in Texas that has a growing downtown residential market got the ball rolling using some type of significant incentive.

  6. My impression is that this will be a quality development creating a significant upgrade to the downtown area. I believe it resonates with the intent of the Downtown Master Plan. True, we have limited dollars for economic development. And, we really need more jobs in San Marcos. But, we need more of the right infrastructure improvements. And, density in the downtown area reduces urban sprawl and fits into livable walkable community development.

  7. Incidentally, I’m not sure who it is that says no to everything, Presenting the opposition in that light is just an easy, convenient (and wildly inaccurate) way of dismissing the other side.

    This is a waste of money.

  8. Also, if we are so concerned about creating a compact city, that we need to pay people to build apartments downtown, then why in the world would we possibly entertain requests to rezone properties on the outskirts of town, for MF and Commercial use? Perhaps I would be more readily convinced, if there were some rhyme or reason to these decisions. As it stands, I just see another developer asking for a handout and the city getting ready to write another check.

  9. There are already nearly 100 apartments downtown, and as far as I know they were built without incentives. The apartments there presently are older, but they are hardly an eyesore. This project should live or die on its own merits. This an outrage, and I can not beleive anyone could support this.

  10. Why have we gone so far down this rabbit hole at all levels of government? “Free Market” and “Limited Government” are apparently obsolete ideologies that were immediately attacked before the ink could dry on the Constitution of the United States. The ten planks of the communist manifesto have been fully implemented. At what point do we stop burrowing down the rabbit hole and take a stand?

  11. This project has already filed for a building permit and I heard had already recieved a demolition permit for the old structure. No one is going to pull permits if they don’t intend to build. Incentives should only be used to lure things that we want, not just give a handout.

  12. don’t think some of you have a good understanding of where this apartment will be built. It is not really in the downtown area. It is higher up and to the West of the campus. This is not a blighted area. This is the location of Balcones Apartment complex which was one of the first “Student Apartments” in San Marcos. Yes, it is kind of old but it is still very serviceable. Go to Google map and do the Satellite view and you will have a better understanding of where this project is located. This is above Pat Garrison Street and the campus will be across Fredericksburg. I do not consider this down town. When W.C. Carson proposed a development closer to downtown, the City not only didn’t give an incentive, the City fought him tooth and nail. That project keeps getting put off because it is not economically feasible at this time. If the City is interested in downtown residential and commercial development, let’s give Carson the money. At least he lives here and spends his money here.

    How much tax will we lose when the existing apartment buildings are torn down? The developers and the City never compute these type of figures. They figure the tax increase (which will be a long time coming) as if they current land is vacant and worthless.

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