February 11th, 2008
River property sale not first row in Hays County over state's dappling in real estate investing

By BRAD ROLLINS
Managing Editor

The General Land Office is back in the news with another high-profile sale of property owned by the state’s Permanents School Fund. The land office recently announced that it was selling 2,100 acres it owns on the Blanco River near Kyle for planned development as a residential subdivision.

RELATED
» Target, J.C. Penny’s will anchor development on land formerly owned by state 02/07/07
» Property’s sale will return it to local tax rolls 07/27/06
» City state at odds over retail center plans 06/24/06
» State’s purchase of local land leaves leaders with concerns 06/08/06

Reacting to the sale, former Nature Conservancy Central Texas director Gary Amaon, a member of the parks advisory team, told the Austin American-Statesman: “I have no problem with (the land office) investing in land for the Permanent School Fund. But if the land’s significant environmentally, they need to do it sensitively, and not just go to higher bidder.”

In 2006, local leaders vigorously objected to the agency’s purchase of three tracts along the interstate under the same real estate investment program authorized by the Legislature in 2005. Profits from the transactions go to the $24 billion-plus school fund.

In San Marcos, the foray into real estate investment resulted in the agency buying 113 acres across from the outlet malls and two tracts totaling about 400 acres east of the interstate at Yarrington Road. Mayor Susan Narvaiz objected to the deals because she said the agency was marketing the property for lease which would allow developers to claim the state’s tax exempt status.

Land Commissioner Jerry Patterson dove directly into the fray in defense of the investment program, telling the San Marcos daily at the time, “I can’t understand why they have reservations about a property tax windfall that will result from this development. It clearly indicates to me that someone doesn’t understand how this works and how it will benefit your city and county and school district.”

The land office eventually sold the 113 acres outright, negating the lost tax revenue issue. The property is now under development as Dallas-based Direct Development’s Stone Creek Crossing retail center. The state still owns the two north San Marcos properties.

brad@newstreamz.com