The Balcones Apartments, which will be torn down now that the San Marcos City Council has approved $610,000 of incentives for their replacement. Photo by Andy Sevilla.
By ANDY SEVILLA
Taking a second crack at giving up to $610,000 of incentives for a multi-family apartment complex on the edge of downtown, a split San Marcos city council approved the proposal with a 4-3 vote Tuesday night.
The council deadlocked, 3-3, on the incentives during its Feb. 16 meeting. The difference this time was Councilmember Chris Jones, who abstained in February and voted with the slim majority Tuesday night.
The $28.5 million apartment project will involve tearing down the Balcones Apartments at 401 North Fredericksburg Street and replacing them with The Vistas at San Marcos, a 200,000-square-foot project that will include 593 beds in 257 units.
The Chapter 380 agreement is based on a maximum amount of $610,000 through five years. The apartment complex is scheduled to be completed on or before Aug. 15, 2011. Starting in 2012, the developer is eligible to apply for grant payments amounting to $122,000 per year during a five-year period. The grant money would come from the increased property taxes to the city resulting from the property improvements.
The incentives negotiated would come from the increase over the reported property tax intake in 2009.
During the Feb. 16 vote, Jones said he would have to abstain because of a possible conflict-of-interest, given that the proposed development is within 200-feet of a parking space he owns. But Jones changed his mind Tuesday, pushing the proposal over the top.
“I’m not voting for this so that I have any economic benefit,” Jones said. “This is a great project for San Marcos and for the downtown.”
Jones said he felt comfortable voting Tuesday after discovering that “impropriety” in his vote would result only if the property under discussion were within 200 feet of property he owned, and that would matter only in the case of zoning decisions, as opposed to economic development agreements.
Councilmember Ryan Thomason, who pulled the item from the consent agenda for open discussion on Feb. 16, again pulled the item for open discussion Tuesday night.
“I’m not supportive of incentivizing, with tax dollars, an apartment complex,” Thomason said, adding that moving forward on the deal would “set a precedent” and “create an economic disadvantage” for nearby proposed developments, including Concho Commons. The Concho Commons apartment project near Concho Street and LBJ Drive is receiving no city incentives.
Thomason said the incentives for Vistas at San Marcos would “serve competitive disadvantage” and open floodgates for developers to feed off taxpayers.
“This is a no-brainer,” said Councilmember John Thomaides. “This will be built with or without us (providing $610,000 in tax incentives). I truly believe that this will be built without our dollars.”
Jones, on the counter-attack, said moving forward with the deal is “not setting a precedent” because, he said, he would personally vote up or down for all incoming projects based on merit.
“I’m getting frustrated with this Tea Party notion that has flooded our budget process,” an agitated Jones said.
According to TeaPartyPatriots.org, “The impetus of the Tea Party movement is excessive government spending and taxation. Our mission is to attract, educate, organize, and mobilize our fellow citizens to secure public policy consistent with our three core values of, fiscal responsibility, constitutionally limited government, and free markets.”
Councilmember Gaylord Bose, who voted with Thomaides and Thomason in opposition, agreed with Thomason that the $610,000 tax incentive is setting the wrong precedent.
“As a nation, Texas isn’t there now, but as a nation we’re walking a dangerous track,” Bose said adding that he would like to see the developers “step up.”
Stephen Haug of Skyline Commercial Inc., which is involved in the development, said incentive opponents have legitimate concerns. However, Haug said he was “glad we’ve gotten past it.”
“(Bose, Thomaides, and Thomason) are looking out for the constituents,” Haug said. “They’re doing the job they were elected to do.”
Haug said, though, that council denial of the incentives would have “almost certainly” hindered the project from moving forward.
Asked to specify why a project worth almost $30 million would have stalled without $610,000 in tax incentives, Haug said, “It’s too complicated.” Pressed further for a key reason why the project would have stalled without the incentives, Haug said, “It’s too complicated.”
San Marcos Mayor Susan Narvaiz said the incentive is performance based and will not result in city budget reductions or force the city to issue debt. Councilmember Kim Porterfield, who also voted in support of the incentives, said the proposed project would do away with “blight.”
The agreement between the city and the developer says the project would have to be certified by specifications approved by the city according to Leadership in Energy and Environmental Design (LEED) by Aug. 15, 2013, at the latest.
“Introducing a LEED building in San Marcos is important,” Jones said.
Echoing Jones, Porterfield said, “Hopefully, this will be a model project.”
Jones made an amendment to the proposal, which passed unanimously, stipulating that 20 percent of the project’s construction must be awarded to local businesses. Jones said the project would thereby be “putting people to work.”
The property presently generates $12,194 in annual property tax. City staff said the property would produce $29,107 annually in taxes with improvements and after the rebate. In five years without improvements, the property would generate $60,970 in city property taxes, while it would produce $145,535 in five years with improvements and after the rebate.
The agreement also stipulates that the project will employ five San Marcos residents full-time at an annual payroll of $208,000. The developer also is to spend $775,000 for improvements to redevelop the street block to include parkland, off-site storm drainage, underground SMEU transformers for electrical, phone and cable, bike lane land dedication, new sidewalks to include curb and gutter, new on-street parking improvements, trees, landscaping, irrigation, planters and benches.
Once the project is completed, the land and improvements are expected to attain a Hays County Appraisal District tax assessed value of at least $27 million. Also, the city will not be required to remit the first grant payment to the developers unless the project has received LEED certification.Email | Print