City Council provided a path forward for a more than 1,000-acre development in the far West Side of Bexar County on Thursday when it unanimously approved a first-of-its-kind development agreement in San Antonio.
While most Council members are averse to suburban sprawl – and the City’s comprehensive master plan wants to steer dense development into urban centers – they agreed that it’s better than the alternative in this case: allowing growth to occur that does not have to adhere to modern development rules.
“On its surface, [it seems like we’re] working against our overall strategies,” Mayor Ron Nirenberg said. “[But] there are some really clear wins for the community in this one.”
Under a special taxation district that Council authorized Thursday, Red Bird Ranch L.P. can recoup costs associated with building out public infrastructure such as roads, drainage, and water and sewer service, by levying property taxes on residents. In exchange for the City’s approval, the developer has agreed to comply with the most recent tree ordinance, military lighting overlays, and development codes. The City will also collect 75 percent of sales tax generated by commercial interests there.
Without the agreement, the land could be developed under less-stringent rules that were in place when the master plan was submitted in 2005.
Nirenberg has directed staff to develop a more specific growth management policy for how the City deals with these districts in the future.
City staff has been working for about a year on the agreement, which includes the option of releasing the land from the city’s extra-territorial jurisdiction (ETJ) if the City and developer can’t finalize the water control and improvement district, or WCID. That option would allow the City to impose the same development restrictions through deed restrictions on the land in exchange for the release.
For the City and developer, the net results would be essentially the same, said Rod Sanchez, the assistant city manager who oversees the Development Services Department.
Bridgett White, director of the City’s Planning Department, confirmed that her department is coordinating with CPS Energy, San Antonio Water System, and other partners to develop such a policy. Using the City’s SA Tomorrow comprehensive plan as a jumping-off point, they first need to establish what tools the City has – or doesn’t have – to navigate similar district agreements in the future.
As the City fields more request for public improvement districts, White said, the City needs to understand “what is the environment like now and what are the policies that need to happen [to further the city’s goals of sustainable development].”
The developer, Red Bird Ranch, is a limited partnership under McCombs Properties, which is the real estate and development arm of McCombs Enterprises. The family office was founded by billionaire B.J. “Red” McCombs and also has business lines in auto sales, energy, venture capital, and charity.
The land was acquired for Redbird Ranch about 12 years ago, said Harry Adams IV, managing partner for McCombs Properties. McCombs and two other landowners submitted a master development plan for the area in 2005.
“We were holding it until it was ripe for development,” Adams told the Rivard Report, noting that the economic recession in 2008 slowed the housing market substantially.
“It wasn’t until two years ago that the market caught up to that area and we as a team started working on planning the development,” he said.
The main benefit of establishing a WCID is that it helps finance infrastructure, which can be staggering for greenfield development. WCIDs allow developers to issue bonds to pay for infrastructure – but the developer takes on the risk of being repaid as the tax base within the district grows, Adams said.
The roads, drainage, water and sewer lines, and all other so-called “horizontal development” is expected to cost roughly $250 million, he said. About $130 million of that will be considered public infrastructure.
Without reimbursements through the WCID, he said, homes would start at roughly $375,000. With residents paying property taxes into the district, Adams estimates homes can start closer to $210,000.
That’s not considered “affordable” housing, he said, but it’s “attainable” for many first-time homebuyers.
“Homeownership for many people is one of the best and only vehicles to create wealth,” he said. “The only way they can get on that road is if they can buy that first home.”
Over the next 20 years, Redbird Ranch is expected to add 2,700 single-family homes, at least 700 apartment units, 137 acres of amenities and parks, and commercial development along a future stretch of Texas Highway 211. They expect to break ground in about two years after receiving approval to establish the district from Medina and Bexar County.
While suburban sprawl runs counter to the SA Tomorrow goal of encouraging residential and commercial growth downtown and in regional centers, the City can’t afford to ignore suburban development, he said.
To accommodate the 1.1 million more people expected to the San Antonio area by 2040, he said, the city needs “a blended approach to growth.”