Carma Development, LP, is proposing that the city provide up to $30 million in property tax reimbursements to defray the costs of infrastructure improvements for a 1,338-acre gated community with 3,427 homes in southern San Marcos.
The developer is asking the city to create a Tax Increment Re-investment Zone (TIRZ) for the Paso Robles project to be located west of Interstate-35, near the intersection of Hunter Road and Centerpoint Road. Carma also is developing the Blanco Vista project, a development calling for 2,000 homes on the north end of the city. The development opened right as the local housing market began to slump in 2008.
According to the state comptroller’s office, tax increment financing enables cities to borrow funds for structural and infrastructural improvements in some zone, then use the property taxes gained from the resulting incremental improvements of the property values within that zone to pay off the debt. In this case, Carma Austin General Manager Shaun Cranston said his company would pay the up-front cost. The city would then repay the developer for the improvements.
However, disagreement arose at the Planning and Zoning Commission (P&Z) meeting between Cranston and city staff as to which party is responsible for funding the proposed improvements. Cranston said the city would ordinarily be required to pay for the improvements through its capital improvements program. City of San Marcos Senior Planner Sofia Nelson retorted that infrastructure within a development is the responsibility of the developer.