by BRAD ROLLINS

San Marcos officials are in the early stages of negotiating an agreement with a Canadian development company that wants to build a major subdivision in Caldwell County near Texas 130.

A subsidiary of Calgary, Alberta-based Walton Development & Management is exploring the possibility of building 2,673 large lot homes on nearly 1,800 acres at Texas 80 and Texas 142. About 1,206 acres of the subdivision — currently being called Cotton Center — falls within San Marcos’ extraterritorial jurisdiction while 573 acres lies within the city of Martindale’s reach.

The San Marcos Planning & Zoning Commission on Tuesday gave city staff approval to negotiate with Walton toward a development agreement. Walton will need the approval of both the San Marcos and Martindale city councils to create a municipal utility district, a quasi-governmental entity empowered with the right to levy property taxes within its area. Developers often use MUDs in Texas to build projects outside the reach of existing transportation, water and wastewater infrastructure.

Under the first draft of a development agreement submitted to the city by Walton’s representative, San Marcos would agree not to annex the subdivision into the city limits for 45 years unless it first agrees to assume most of the MUD’s debt. The draft — Walton’s starting point for negotiations — would allow the city council to approve a basic land use plan for the portion of the property currently included in Walton’s proposed MUD.

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