San Marcos Mercury | Local News from San Marcos and Hays County, Texas

August 26th, 2008
Kyle says new boom coming – in a year

Editor at Large

KYLE – As the local economy hiccups along while the city pushes for a large tax increase, Kyle City Manager Tom Mattis told the Kyle Area Chamber of Commerce (KACC) Tuesday that a boom could be coming.

But it’s probably going to take another year. In other words, Mattis told local business owners, hang in there.

Mattis and Kyle Mayor Miguel Gonzalez both addressed the KACC Tuesday afternoon in their third annual “State of the City” address.

The city administration is banking on the opening of the Seton Hospital in early 2010 and adjacent retail a few months before then to start repaying the city for its significant capital investment in Kyle Parkway and its intersection with Interstate-35.

The city has borrowed $60 million in the last five years, with 42 percent of its debt service payments on the next year’s budget going towards that intersection, Mattis said. The city borrowed $14 million just to build Kyle Parkway, which opened two years ago as a business thoroughfare through the north end of town from IH-35 to Jack C. Hays Trail. Another $22 million is funding infrastructure improvements to facilitate the Seton Hospital project, which involves a total of $438 million in public and private capital investment.

By early 2010, the intersection will be home to a 210-bed hospital with services going all the way out to open heart surgery, as well as two million square feet of retail. Along with the retail right next to the hospital property to be developed in partnership with the hospital, David Berndt Interests expects to open a Target, a Kohl’s and a City Lights Theater to highlight a major retail development across IH-35.

“In 12-14 months, figure that last part of 2009, the hospital and retail will open,” Mattis said. “We think our housing market will follow as well … It will change us forever. We will be a different Kyle just by having the hospital. We think that after 12-14 months, there may be a whole new wave of potential development we haven’t even thought about yet.”

At that point, an influx of sales taxes and an enhanced commercial property tax base should ease Kyle’s financial picture, according to city projections. Until then, Mattis said, the ride could be bumpy.

The Northern Hays County housing market, which held pretty steady through the first half of the year, has slowed perceptibly during the last couple months. Meanwhile, the city is considering a 10-cent property tax rate hike to help pay down debt, largely for projects designed to stimulate Kyle’s next boom.

Of the proposed property tax rate, 37.31 cents per $100 of assessed value, a full 20 cents is designated for debt service, an increase of almost a full nickel from last year’s debt service levy of 15.07 cents. In total, the property tax rate would increase 10.24 cents from last year’s rate of 27.07 cents.

Mattis gave the KACC membership his usual stock of arguments in favor of the tax increase: the borrowed funds are invested directly into the city for needed improvements and economic development infrastructure while still leaving the city’s property tax rate much lower than in comparable Central Texas cities.

“As you all know, the tax rate is creeping up,” Kyle Mayor Miguel Gonzales told the chamber, “but we run a very lean city government.”

Among the leaner features of the city government is the Kyle Police Department, which presently has 19 sworn officers for a population of about 30,000. According to figures from the Federal Bureau of Investigation (FBI), a town in Kyle’s population range averages three times as many officers.

Thus, the next budget, which will be settled in the next three weeks, calls for six more sworn officers, along with six others who are already budgeted and whose hiring awaits the city’s full transition to civil service rules in October.

Gonzalez also advised business owners to bear down and work for rewards to come in the future.

“We are a city that is not afraid to dream big,” Gonzalez said. “… But without the right council, the right business community and the right involvement from the citizens, that’s all it will be, is a dream.”

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