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

September 19th, 2011
Developer asks for extension on major downtown project

An artist’s rendering depicts what the Vistas at San Marcos project downtown, formerly called Vintage San Marcos, might look like upon completion. IMAGE VIA CITY OF SAN MARCOS


Developers of a $28.5 million apartment complex project in downtown San Marcos may receive a one-year extension on an economic development agreement with the city, and thereby remain eligible to receive up to $610,000 in forgiven property tax.

Called the Vistas at San Marcos, the multi-family housing project would redevelop nearly a whole block between Comanche and Fredericksburg streets north of Pat Garrison street as a 200,000-square-foot building to include 257 living units and 593 beds. The six-floor building would replace the aging Balcones, Carlyle and Pat Garrison apartments and a rental house at 418 Comanche Street.

Guerrero, Thomason, Ingalsbe, 9-15-11 480x290

San Marcos Mayor Daniel Guerrero, council member Ryan Thomason and Hays County Pct. 1 Commissioner Debbie Gonzales Ingalsbe — all members of the city’s economic development board — at a recent meeting. PHOTO by SEAN BATURA.

Stephen Haug, president of the holding company that owns the properties, says his development arm has secured financing to get the project going but that it can’t meet an August 2012 deadline for the building to completed. Haug requests a new deadline of July 2013.

“We now have the equity and financing committed that will be required to complete the project,” Haug said in a Sept. 13 letter to the city’s economic development director, Amy Madison. “However, that equity and financial restructuring has all been underwritten based on having a 380 agreement with the City of San Marcos in place that extends the project completion date to July of 2013.”

On Sept. 15, the City of San Marcos Economic Development Board voted 11-1 to advise city council members of the extension’s merit. However, the board recommended conditions designed to ensure the existing 1960s-era structures are demolished and the land re-planted, even if the project does not make a new deadline. City council members are expected to consider an extension at a future meeting.

Two out of three council members who voted against the 380 agreement in March 2010 no longer sit on the council. Three out of four council members who voted for the agreement still sit on the council. San Marcos City Council Place 5 member Ryan Thomason, the remaining opponent of the agreement on the council, also sits on the economic development board. Thomason cast the sole vote on Sept. 15 against recommending an extension of the 380 agreement.

Thomason, repeating his previous arguments against the agreement, said the Vistas at San Marcos is too large a project to hinge on a $610,000 tax rebate.

“I think there’s a competitive disadvantage created for the Darren Caseys and the Larry Peels of the world that have similar obstacles and similar contracts,” Thomason said. “You’re going to start site selecting who you’re going to give economic development incentives to.”

Thomason said Austin developer Peel’s $24 million Purgatory Creek Apartments had no help from the City of San Marcos, which agreed to rezone 22.5 acres for the project only if Peel could secure the timely permission from the Texas Department of a curb cut to the property and finalize construction plans for a turn lane and deceleration late on Hunter Road.

“And then (Peel) had to buy five acres to connect to our nature trail at probably, who knows, over $500,000,” Thomason said.

Economic Development board members Ed Bolten and Bruce Tifft were among the strongest supporters of the 380 agreement’s deadline extension. Bolton, expressing optimism about the project, said he thinks construction costs will decrease from the estimated amount. Bolten said Peel is “loaded” and did not need to ask for an incentive for Purgatory Creek Apartments.

“Darren Casey’s loaded also,” Thomason said. “His name’s on the side of a building on (the Texas State) campus. It was expensive. He’s already saying he’s going to come in (and ask for incentives). And that’s fine, (we can) evaluate that.”

According to Madison, the Vista’s developers requested the 380 agreement rebates because market conditions were such that lenders and equity investors saw the project as not viable without additional cost savings to offset high capitalization rates and high construction costs.

Tifft said the 380 agreement is ideal because it would enable more housing closer to the university. Additionally, Tifft said the agreement presents a good opportunity to remedy the “ugly looking spot” proposed for redevelopment. The Balcones Apartments now stand on the block proposed for the Vistas. Madison said the apartments on the block proposed for demolition are empty of tenants.

San Marcos City Manager Jim Nuse, who sits on the economic development board, originated the idea of securing a guarantee from Haug that the old structures will be demolished and the area re-vegetated as a condition of granting the extension request.

Pursuant to the 380 agreement, Haug’s LLC will be eligible to apply for grant payments from the city of no more than $122,000 per year during a five-year period — after the project is completed. The payments would be calculated from the increased property taxes to the city resulting from land improvements.

According to the 380 agreement, if the actual gross revenues of Haug’s LLC exceed the projected gross revenues for the same year, then the maximum grant payment will be reduced by the same percentage that actual gross revenues exceed the projected gross revenues.

According to Madison, the Vistas project is expected to create 10 jobs with a total payroll of $251,000, and to generate annual property tax revenue of $151,107. The property currently generates about $12,194 in property taxes, according to Madison.

The Vistas is proposed to include the area bounded by Comanche Street, Pat Garrison Street, North Fredericksburg Street and Lindsey Street.

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9 thoughts on “Developer asks for extension on major downtown project

  1. Sure, give it to them council. I don’t mind living in a town with a outdated, dilapidated infrastructure so out-of-town developers can continue to receive more and more property tax breaks.

  2. I’m only writing here because I have found no other way to get in contact with Mr. Haug. I was a resident at the Balcones apartments and was forced to move out because of this project; and I was told by the manager that I would be guaranteed my deposit back because of this fact. To get my deposit back I was told to e-mail and did so, btu never received a response. Since then, the beginning of August, I have heard nothing from this company even though I changed my address immediately upon moving out (August 4th). If someone could provide me the proper contact information I would greatly appreciate it as I could use that $300…

  3. I live across the street from this project and they have trashed my neighborhood. The pollution is unbearable. Everything I own is covered in the dust from quarrying the hill. You can’t breath when you go outside and you better have eye protection. I tried to mow the lawn and it was like a dust storm. My cars are covered with dust everyday. They wake up my family at 6am everyday, even on weekends.

    How is this legal and I’m supposed to take ANOTHER year of this?

  4. Is COSM inspecting the site for Indian artifacts? Does anyone know? San Marcos is the location of the OLDEST CIVILIZATION IN THE NORTHERN HEMISPHERE. One would think our city leaders would protect our history.

  5. I write this on behalf of myself only as I muze about the latest development issues. Sure we need more student housing. DO we rteally need to give these free market mavens an incentive? If we gas a City give then we should get. As I watch other cities use their tax incentive programs to attract investors and developers I also noticed that they attach strings such as a set aside for low income housing and Section 8 housing. Many of those displaced by the removal of the old apartments were low income students and perhaps even section 8 housing voucher beneficiaries seems to me that if this does become a reality that we should in ensure that 20% of the units be set aside for low income housing and section 8 housing to alleviate the housing shortage we have for these segments of our community. Just a thought.

  6. And Lisa.. please stop stirring the pot with sound bites that while the sound good simply have no basis in fact. The folks that should be raising these issues are folks like Garber and Loese. They have credibility when they speak.They appear to be of the opinion that there simly is nothing there.

  7. As quoted from the article above, “Economic Development board members Ed Bolten and Bruce Tifft were among the strongest supporters of the 380 agreement’s deadline extension.” Once again, people that do not own property in San Marcos are making important decisions with our tax money. Mr. Tifft and his family tried to live in San Marcos, but wanted a more family friendly environment so when it came time to purchase a home, they moved to New Braunfels. I’m not sure where Mr. Bolten lives and could not find that information online, but I did check the Hays County Tax Information and did not find any property listing under his name. While I support this project being built, I DO NOT support giving away tax dollars to do it. The Economic Development board should be looking for new businesses to bring to San Marcos, BUT they should be looking for projects that support the GOALS of the CITY. Here they are as a reminder:
    “The city council adopted five strategic initiatives on March 1 following a retreat held in January. The five goals are:

    • Sound finances

    • Customer friendly processes

    • Big picture infrastructure

    • Maintain and protect San Marcos River

    • Community wellness/Strengthen the middle class ”

    Let’s develop an economy in San Marcos that brings good jobs and quality projects and let’s use our tax dollars for projects that benefit the people paying those taxes.

  8. Vista Apartments San Marcos Texas

    My daughter just recently moved into a new apartment called the Vistas at San Marcos. She is a student at Texas State University and is sharing an apartment with three other girls. I am extremely disappointed with the condition of the apartment upon move-in. The complex was ridiculously crowded making the move horrendous. It seemed as if everyone was assigned the same move in date. The apartment itself was not completed. It was dirty and there was even a hole visible in the wall. I have asked to have my daughter moved as the apartment is a disgrace. Also, I find it unfair that she is living in the loft (with no door even though she was promised a door) and is being charged the same amount of rent as the other girls who have private rooms. The apartments were being inspected the same day students were moving in. The organization was lacking, and if the apartments were not completed I do not see how it would be logical to allow students to move in. If moving my daughter into a decent room as she was promised is not possible, I would at least think the only other fair thing to do would be to allow her to break the lease without penalty. I do not see how she can be forced to stay in something that is not what was promised upon signing. I would like to hear back from you as soon as possible in regards to this issue please.

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