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Old Posted Nov 15, 2007, 6:15 AM
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SA: Boerne, developer bogged down on deal regarding 1,250 acre development

Boerne, developer bogged down on deal

Web Posted: 11/14/2007 11:46 PM CST

Zeke MacCormack

BOERNE — Months of negotiations haven't resolved major issues between Boerne and development company Marlin Atlantis regarding Esperanza, its planned community east of town.

The secrecy surrounding talks over a development agreement was lifted Tuesday at City Hall, where the basic terms of the pact — still described as a "work in progress" — were publicly discussed for the first time.

Jim Baker, chief executive officer of Marlin Atlantis, has pledged donations and other considerations aimed at making the 1,250-acre project "cost neutral" to city residents.

The development has been controversial in Boerne because of its size. It would include 2,500 residences and a commercial center.

Besides offering 36 acres for a school campus and 25 acres for a park, the Dallas company has agreed to pay the city millions of dollars toward upgrading its sewer system and to widen Herff Road to counter increased traffic.

By Baker's calculations, Esperanza would provide the city with revenue and benefits totaling $99.5 million over 20 years and would cost it only $60.3 million.

But those figures drew a skeptical response from some.

"I don't think that information is correct," Councilman Rob Ziegler said Wednesday. "City staff is going to look at it to make sure we come up with accurate estimates."

The council also heard from attorneys it hired to negotiate with Marlin Atlantis. An agreement, if reached, would clear the way for the company to form a utility district that could issue bonds to build roads and other infrastructure.

If the city can't reach a deal with Marlin Atlantis, the attorneys told the council, the city could lose control over the use of the land off Texas 46.

"Without the development agreement you have certain limited rights," said attorney Rider Scott. "With the development agreement, you're extending your rights, contractually."

If negotiations fail, he said, Marlin Atlantis could create its own city rather than agree to have its site annexed by Boerne in the future.

One big concern was Marlin Atlantis' proposal to reduce from 1,250 acre-feet to 500 acre-feet the volume of Canyon Lake water it would buy annually from the Guadalupe-Blanco River Authority.

Baker tied the reduction to a drop in anticipated water demand at Esperanza because his company plans to buy treated wastewater from Boerne for its landscaping.

City officials reminded Baker that he'd pledged last year to supply all the water needed for Esperanza, and called it critical that there be no shortfall.

Ziegler, who's handling the city's negotiations along with Councilwoman Judy Edmondson, challenged Marlin Atlantis officials about the accuracy of their figures.

They forecast the city would bank $35.8 million in sewer fees from Esperanza over 20 years while incurring $5.8 million in operating costs.

"I'd love to see profitability of that kind," Ziegler said dubiously.

Conceding that the costs were based on operations at the city's existing plant — not a planned new sewer plant — the developer agreed to revise the figures.

The city has yet to receive a traffic impact study on the project, prompting questions on whether widening Herff Road would be enough to handle extra vehicles from Esperanza.

An update on negotiations may be presented to the council Nov. 27 or Dec. 4.

Views on the draft pact varied among those in the audience. Mark Mason of the residents group Boerne Together questioned the "cost neutral" pitch by Marlin Atlantis.

While residents may not feel the impact, he said, Esperanza will require increased expenditures — and higher tax rates — from Kendall County, which will initially provide police and ambulance services, and the Boerne Independent School District.

Bill Taylor of the residents group Boerne Forward said an Esperanza deal will bring stability and other benefits to the city.

"If an agreement doesn't come to pass, there's going to be development that won't be as good for the city," he added.
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