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Ignoring a developer’s plea that delay could endanger his deal to sell land to H-E-B for a new store on McCarty Lane, the San Marcos City Council on Tuesday voted to table an ordinance that they approved unanimously two weeks ago.

Often, the second vote on amending a planned development district would sail through on the council’s “consent agenda” which allows for a single vote on multiple agenda items. On Tuesday, however, after the H-E-B-related measure was flagged by council member Kim Porterfield for further discussion, council member John Thomaides asked why the document does not require Stratford Land Co. — or whoever owns the property when it is developed — to pay the full cost of building a planned four-lane extension of Texas 21 where it crosses the development.

“I understand that this is about an HEB on the corner and I’m in full support of doing whatever you need to do that. …But things have changed in San Marcos since this property was first discussed and approved by this council and here it is opened up again. And now we have a real need for this section of 21,” Thomaides said.

The council ultimately voted 5-0 to table the amendment. Stratford Land Co. partner Ocie Vest stopped short of saying that H-E-B might back out as a result of the council hand-wringing but said the postponement creates a “hardship” for the developer and the San Antonio-based grocer.

“We’re under contract with a major grocer to close that sale. We’re under a deadline and we have a contractual agreement to perform on our side by a certain date. We’re up against that date,” Vest told council members as it appeared likely they would table the amendment.

“Are you saying that if we don’t approve this tonight, that H-E-Bs not coming to San Marcos” with a third location, Porterfield asked.

“I’m saying we have a contractual agreement with a major grocer,” Vest answered, but the exchange was interrupted before Porterfield could follow-up.

Stratford had asked that the McCarty Commons Planned Development District agreement approved by the council in 2009 be amended to accommodate changes to 17.7 acres of the 259-acre prospective development, property that HEB is under contract to buy at the corner of McCarty Lane and the northbound Interstate 35 access road. But, in doing so, Stratford re-opened negotiations on the entire development agreement, including the extent of the developer’s responsibility for constructing the roadway.

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Under the proposal the council considered last night, Stratford would donate all the right-of-way needed to build the roadway plus the construction cost of two lanes of the road. The city would be responsible for an additional two lanes, if it determined they were needed. Thomaides wanted to know why Stratford wouldn’t be required to pay for all four lanes.

“I most cases, when you have a development and you’re seeking an agreement … you’re required to build your portion of it. …Every other developer if they did this development today, they’d be required to build” the entire four lanes, Thomaides said.

However, both City Attorney Michael Cosentino and Development Services director Matthew Lewis said that is not necessarily true. Under the city’s subdivision rules, the developer is responsible for constructing thoroughfares in proportion to how much the the road’s traffic would be caused by their development, not the entire road segment.

City Manager Jim Nuse asked council members to keep the bigger picture in perspective. The city’s estimated cost for the segment of the Texas 21 extension across McCarty Commons is $1.1 million.

An H-E-B grocery store “would generate about that amount in two years” in sales tax, Nuse said. Plus, he said, “when an HEB goes in, rooftops get created. There will be a good return on the investment.”

The 2013 version of the PDD strengthens the city’s hand in regard to the Texas 21 extension over the earlier agreement, Lewis said. Under the 2009 version of the PDD, Stratford or the future land owner was neither obligated to donate right-of-way sufficient for the four-lane highway nor donate right-of-way for an east-west connector between the Texas 21 extension and the Interstate 35 frontage road. Under the current proposal, they are on the hook for both.

In addition, under the current proposal, the city can take ownership of the right-of-way and build the road with 90 days notice. Typically, the city would not be able to secure the right-of-way until a developer applies to plat adjacent portions of the property. Moreover, if the city constructs all four lanes of the road at its own initial expense, the developer is responsible for reimbursing the cost of two lanes.

“If we pass this tonight, there are triggers that give us the right-of-way. If we pass this, tomorrow if we want to start building a road, we have the right to do that as a city. If we build all four lanes, they have pay us back for half,” council member Shane Scott.

With council members Ryan Thomason and Wayne Becak absent — and with Thomaides and Porterfield voicing dissatisfaction with aspects of the agreement — Scott moved to postpone consideration until a full council was present. He withdrew his motion when Mayor Daniel Guerrero and council member Jude Prather indicated they were ready to vote.

Later, however, Guerrero himself moved to postpone, saying he wanted to wait until the full council was present and that he was uncomfortable with changes to the deal given to council members just before the start of Tuesday’s meeting. Vest said the late-breaking changes were technicalities that did not change the overall shape of the deal between the city and Stratford.

“What you voted on at the last meeting is exactly what you’re voting on today. The business terms are identical as far as whose building what, how dedications are working, whose responsible for what roadways. None of that has changed,” Vest said.

The council moved ahead with tabling the McCarty Commons amendment and, shortly thereafter, did so on two other pending developments they had been scheduled to consider: An amendment to a development agreement with Craddock Avenue Partners to convey part of their Buie tract property to Capstone Collegiate Communities LLCs and a presentation on the proposed Whisper Texas Public Improvement District along the interstate in northern San Marcos.

The city’s and county’s transportation plans call for extending Texas 21 past its present dead-end at Texas 80 all the way south to Posey Road. A segment of the road between McCarty Lane and Centerpoint Road would cross the McCarty Commons Planned Development District and join up with a segment of the road planned to cross the Walton Development’s proposed Gas Lamp District, which is currently being negotiated between the city and Walton under as a funding model called a public utility district.

The McCarty-to-Centerpoint segment of the Texas 21 extension is particularly important, Nuse said, to feed traffic to and from the eastern San Marcos loop to Centerpoint Road where the Premium and Tanger outlet centers consistently churn out more than 40 percent of the city’s sales tax revenue — more than $11 million in 2011, for example.

The extension “is very important for that segment of town. Right now [the outlet malls] generate more than 40 percent of the sales tax in the community. Getting traffic circulation in that area is really, really critical,” Nuse said.

Read more

» McCarty Commons Concept Plan by San Marcos Mercury


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15 thoughts on “Weeks after unanimous OK, council tables H-E-B proposal

  1. I’m a fan of fiscal responsibility in government, but it sounds like the City is willing to cut off its nose to spite its face in this case. It’s a public road we’re talking about here, not a parking lot or something.

    Plus, Nuse is right – the long-term benefit from sales tax alone makes the $1.1 million that they’re dickering over seem paltry by comparison.

  2. I understand why they have to give up the land, but why should they have to pay for the public road? That is a big government brand of fiscal conservatism; using the power of zoning to extort from a private individual the cost of a public work. If it costs the upper south side their grocery store, maybe the outrage will shake up the council.

  3. One correction I have asked Brad Rollins to make was in reference to the second paragraph of this story claiming I was asking Strattford to pay the full cost of the 4 lane planned roadway. This is incorrect and I have sent Brad the video from the city’s website. Our ordinances require them to build 2 lanes and we are responsible for the other two. This is the same plan we are using for the southern portion of this road through the Gaslamp development. I serve on that subcommitte and I am very familiar with the scenario of shared proportionality when building roads that are identified on our thorughfare master plan. My questions and concerns referred to when the 2 lanes they are responsible for would be built since I didn’t want to incentivize Gaslamp to build a road to nowhere. The staff recommendation is to have the city build our two lanes first.

  4. I did indeed speak with Mr Thomaides earlier today and agreed to review the video again (my third time to watch this discussion) and see if I was mistaken about Mr Thomaides’ position.

  5. Kudos on tabling the Craddock Ave Partners transfer of development district to Campus Collegiate. It makes no sense to me why buyers there would want to use a 2009 agreement, when that area was rezoned to MUCH looser zoning in 2011. Something is fishy there, but I cant’ figure it out and can’t get a hold of the right person at the planning department.

  6. By the way John PLEASE don’t mess up my chance to have an HEB closer to my house and further away from traffic, k thanks!

  7. Oh and one more thing I never said Brad: …Every other developer if they did this development today, they’d be required to build” the entire four lanes, Thomaides said.
    Understand Mellisa. You would think that was the case from reading the headline of this story.

  8. John,

    I think there may be some Morning After revisionism going on but, like, I said, I will check it out. If I’m wrong, I’m wrong. The whole thing’s on tape so it will be easy enough to check out. Just haven’t had the opportunity to do so yet. And I’m confident enough in the story that I don’t consider it an emergency.

  9. ACK we say things in the Charter review commission that we really didn’t intend…brain fart…whatever…let it go Brad. If he had a tongue slip it still doesn’t change his intent ya know….and yes John I agree that’s how it came across entirely but I know you didn’t meant it that way.

  10. John, thanks for coming on here to clarify your positions.

    So if it wasn’t a disagreement over the development of the roads, what was the justification for delaying (and potentially killing) this deal?

  11. Dano, The question of whether they build their 2 lanes of the road first or we build our two lanes was my line of questioning. In the end it was my sense that we all understood the logic of the staff recommendation that we build ours first and I have asked that we hear an explanation of how we could accomplish that at the next meeting. The situation of receiving 2 pages of changes to the agreement after 5 pm on the day of the meeting which no council member had a chance to read and that 2 of our colleagues were out of town made it difficult to vote that night. I think after the questions we asked we all felt that the deal would not be “killed”. Just speaking for myself of course.

  12. Fair enough John. A little extra data goes a long way toward helping us all understand what’s going on. I just hope you’re right in your feeling that the deal will persevere. If it dies because of this, it’ll go down in the record books as a HUGE mistake on Council’s part – but I’m sure you were all aware of that fact and acted accordingly.

    Thanks again.

  13. Conversely, if it doesn’t die, it will go down in the record books as evidence that sometimes it is ok to slow down a little, to make sure everything is as it should be. We have a history of being coerced into hasty decisions over deals that might die. Some of those have still not been built, years later. Some others turned out poorly, and make me (and maybe others) wish we had taken a little more time.

  14. I couldn’t have said it better myself Ted! Personally I think all this coercion to rush, rush, rush and approve on the first reading or else lacks basic professionalism of the party seeking approval. If our CC caves into it that it sets a precedence for others to follow.

  15. Good to see city council showing such concern about responsible development. Who knew they had it them?

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