[Austin] 130 Corridoor Development

[JAM]

Austin, developer take new tack on Texas 130
Proposal being negotiated could be model for how to pay for development.

By Kate Miller Morton
AMERICAN-STATESMAN STAFF
Thursday, April 17, 2008

Austin has struggled for years to find a way to control development along Texas 130, where many public improvements are needed to spur the dense, mixed-use development the city wants in its future growth zone.

Now, city officials think they may have found a way to regulate how the land is used without spending a big chunk of limited tax dollars to build the new roads, parks and water and wastewater facilities necessary to accommodate a large number of houses, offices, warehouses and shops.

Austin and the developer of the proposed Whisper Valley and Indian Hills developments near Texas 130 are negotiating an unusual deal in which the developer would allow the city to immediately regulate the development of the two large planned projects through limited-purpose annexation without having to provide costly services for years.

In exchange, Austin would establish two city-controlled public improvement districts that would pay for the infrastructure — which it believes would cost tens of millions of dollars, minimum — by issuing debt that would be repaid by a fee on property owners in the district.

"Bottom line, we'd do a development agreement that gives us an opportunity to essentially invest in infrastructure in order to produce a different land-use pattern than what we typically see in a suburban (area)," Assistant City Manager Laura Huffman said.

The potential Whisper Valley and Indian Hills deal was made public just over a month after the city rejected a request to temporarily release nearly 2,000 acres from its future growth zone near Texas 130 to the developers of the Villa Muse entertainment studio and production facility. Those developers wanted to build their project outside Austin's regulatory authority and pay for it by creating its own taxing district.

The 2,100-acre Whisper Valley project near the intersection of a future Braker Lane extension and Texas 130 would include: 2,850 single-family homes; 5,000 apartments, townhouses and condominiums; more than 2 million square feet of office and retail space; and 700 acres of open space.

Indian Hills, at Decker Lake Road and Texas 130, would include a maximum of 1,500 apartments and 140 acres of office, light industrial and neighborhood retail space.

These are the first projects in the Austin area for the developer Taurus of Texas Group, and the benefits of the developments could be huge for the city.

Developers say the total value of the two projects could be as high as $3 billion when fully built out.

It's not just the eventual taxable value of the property that matters to Austin.

Whisper Valley and Indian Hills are the dense types of developments that city officials think are cheaper to provide services to because they concentrate a larger population in a smaller area. The mix of uses could enable workers and residents to drive less, adding fewer cars to city streets and less pollution to the water and air than typical suburban developments, where residents drive to most destinations.

Development along the 130 corridor has so far primarily been traditional single-family subdivisions, which are cheaper and easier to build.

In addition to having a substantial commercial component, Whisper Valley would differ from surrounding developments by offering more open space and park amenities and a wider range of housing types and prices.

Prices have yet to be determined, but the developers say they anticipate that attached townhouses and condominiums will start around $100,000, and the biggest single-family houses could sell for well over $1 million.

The City Council must approve the final development agreement and public improvement district structure. The developers hope to get full approval by the end of the year and begin construction next year.

kmorton@statesman.com; 445-3641

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[ATXboom]

Thursday, April 17, 2008 - 8:35 AM CDT
As Villa Muse pushes city away, its neighbor cozies up to get $3B project done
Austin Business Journal - by Jean Kwon Staff writer



After the unsuccessful bid by the developers of Villa Muse, a proposed multibillion-dollar film production hub, to build outside city land-use controls, the developers of two new projects in the same area are singing an opposite tune: They're entering an unusual -- and intimate -- financing partnership with the city.

That partnership, say city leaders, could set the precedent for the way large-scale real estate projects develop in the city's desired growth areas.

Taurus of Texas Holdings LP, the Fort Worth-based partner of Taurus Investment Holdings Inc. in Boston, plans to invest $3 billion in two projects totaling about 2,340 acres near State Highway 130 east of Austin -- a few miles north of Villa Muse's proposed location. Just like Villa Muse, the proposed projects are in the city's extraterritorial jurisdiction, the 322 square miles of unincorporated land just outside the city limits that the city is authorized to annex and levy taxes on. City leaders have targeted the emerging 90-mile SH 130 corridor as a major future growth area.

The city continues to dangle an offer of a development agreement within the ETJ to Villa Muse, says Assistant City Manager Laura Huffman.

That offer involves the use of a rare public financing mechanism that would help bring infrastructure -- water, wastewater and roads -- quickly to the area, which would normally take the city years to service. Called a public improvement district, or PID, the structure asks the city to issue bonds, the proceeds of which pay for infrastructure and are reimbursed through assessments on property owners. In exchange, city officials have oversight of the project, which observers say Villa Muse may have wanted to avoid.

Taurus, on the other hand, is embracing the PID concept, and a development agreement in the works will make its way to the City Council in coming weeks.

Dubbed Whisper Valley, the first project is a 2,100-acre mixed-use development at Braker Lane that would include 2,850 single-family units, 5,000 attached units, 1.25 million square feet of retail and commercial space and 1.15 million square feet of office.

Just to the south at Decker Lake Road are plans for another 240-acre project called Indian Hills. That project would set aside 100 acres for rental units, and the remaining acreage for light industrial, research and development, office and retail uses. The lead master planning firm is Denver-based Nuszer Kopatz. Design teams are the Dallas office of global firm Gensler and Memphis-based Looney Ricks Kiss Architects. Bury+Partners Inc. of Austin is the lead engineer.

"SH 130 is opening up a region for Austin which we believe has tremendous promise," says Taurus of Texas President Douglas Gilliland. "The proximity to high-quality employment centers, downtown and the airport all were things we knew would allow for significant growth in a market that has already proven itself to be a quality market."

"We also understood the biggest challenge was the massive amount of infrastructure that needs to go there," says Gilliland. "We could see the city shared the same commitment."

City Council Member Brewster McCracken says PIDs are a good way to get infrastructure placed in areas primed for growth.

PIDs haven't been used extensively in Texas because of legal hurdles and complexities created in the past over misinterpretation of the state's PID-enabling statutes, says attorney Steve Metcalfe, who is stewarding Taurus' projects through city approvals.

Outside Texas, there were $5 billion worth of PID bonds issued last year, says Tripp Davenport, a land secure transaction expert at Bank of America.

Under Taurus' agreement, Whisper Valley and Indian Hills would be annexed for limited purposes, meaning the city would not immediately assess taxes but gain full land use control. The projects would get planned unit development zoning.

Statutorily, limited-purpose-annexed property becomes full-purpose annexed within three years but that requirement can be waived, says Metcalfe. A date certain for annexation will be negotiated in the development agreement, he says.

With approvals in place by the end of the year, construction could begin on both projects as early 2009, says Gilliland.

Villa Muse developers had cited the city's prolonged development review process as the reason for wanting to back out of the ETJ. Backers of Villa Muse, who want to build a massive mixed-use project anchored by film studios, say that due to the city's unwillingness to let their land go, they're seeking other sites near major Texas cities.

http://austin.bizjournals.com/austin...ml?jst=b_ln_hl

[paulsjv]

dang it you beat me to all the good stuff today!