COMMUNITY NEWS IN SMITHVILLE TX 125
WHAT’S HAPPENING IN SMITHVILLE AND WHY YOU NEED TO BE INVOLVED
by ABCS GROUP
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If you don’t already know, Smithville, Texas has a high-density residential development coming to town or should we say already in-town. 114 residential lots, located between Hwy 71 and American Legion Road. The annexation and 380 agreement for this subdivision/developer was approved by City Council in June, 2022. So that ship has sailed.
If you're not familiar with 380 agreements, the local government code authorizes municipalities to offer loans and grants of city funds or services at little or no cost to promote state and local economic development and to stimulate business and commercial activity. Detail information provided in the link below.
Within the original 380 agreement a timetable is given to the developer to reach certain performance-based milestones within 6 years. The developer did not meet his first milestone, so the City Council approved an amendment 380 agreement dated December 22, 2022. Original and amended 380 agreements are attached below.
Highlights to the amendment 380 agreement are as follows:
1) To reflect a 1-year extension to the performance-based timetable.
2) To provide a 100% discount for sewer tap fee. Estimated cost savings to the developer $513,000.
Fast forward, January 2025. The developer submitted a variance request for 50% impervious coverage to our current required 40% and a 5ft side setback to our current required 7.5ft. The stated premise was to allow them to build larger homes on the minimum size lot required by our subdivision ordinance. If the developer wants bigger houses, why doesn’t he make bigger lots? The variance request went in front of Planning and Zoning Tuesday, January 7th. The request was denied and will be presented to City Council, Monday, January 13th for a final decision. Agenda and packet below.
In addition to the variance request the developer is asking City Council to review and approve a Public Improvement District (PID) for $5,084,867.
A PID is a defined geographical area established to provide specific types of improvements or maintenance within the area which are financed by assessment against the property owners within the area.
There are many steps that must happen before the PID is on the agenda for Council denial or approval. Based on what we read, the typical PID process takes about 6 months. One step in the process is the city must call a public meeting so residents can hear in detail about the developers PID request and ask questions. That public meeting is scheduled at City Hall, Wednesday, January 15th at 5pm.
It’s important to read the Introduction to PIDs submitted by SAMCO Capital and the developer's PIDs proposal.
SAMCO does a good job of explaining the bones of a PID but we dug a little further. PIDs are funded through bonds secured by liens against the property. Bonds are issued based on the property’s appraised value. Once issued, bonds are paid back through the collection of special assessment taxes. This assessment is in addition to property taxes property owners in the subdivision will pay. PID taxes can be spread out for 20-40 years or they can be paid upfront by a homeowner.
While PIDs may be attractive mechanisms to provide additional infrastructure and amenities, reducing the financial burden on all taxpayers in the city, any PID policy should be carefully written to ensure homeowners do not suffer because of a poorly managed program.
Pros and Cons: Some of the articles we found list that PIDs are a plus because it reduces the amount that developers have to raise via construction loans by allowing some of the cost of the development to be paid for by the PID. Wait, aren’t we already giving the developer $513,000 in 100% sewer tap fees in his 380 agreement?
PIDs can also take the city off the hook for the cost of development of the city in the form of infrastructure (water, sewer, etc.) as the developer often rolls this cost into the PID. This means we would put these costs on the backs of the 114 homeowners in this development ?? Aren’t these typical cost for a developer? SAMCO Capital states that PIDs can be created for private amenities tailored to the community. For example, pools, playgrounds, fitness centers and enhanced trails. Again, we would be putting this cost on the backs of the 114 homeowners while the rest of Smithville enjoys these amenities at no cost? SAMCO also lists that the PID can be used to dictate a superior plan, design, architecture and building materials that exceed subdivision building standards. The stated builder, DR Horton, is a mass production builder that features identical houses on minimum size lots using bulk materials and assembly line techniques, reducing cost and construction time. If the PID states that the builder is required to build homes designed with a variety of setbacks, exterior design and better building materials we think that is a positive for these homeowners. It’s like an upgrade to the home that they would typically pay for. Seems fair, right?
Homeowners buying property in the PID have to live with the extra cost of living in that development. Yes, that’s a decision for them to make. These costs must be disclosed to the potential buyer prior to closing. Buyers for these homes are usually first-time home buyers, young families who typically live on a budget. The extra cost could be a deterrent and they end up buying in another community without a PID program. Could a PID property potentially influence an increase in overall prices for purchasing property outside of the PID property?
We don’t have answers for many of these questions. The information was only made available to the public on the city website this past Friday. Please do your own research, come to the Wednesday meeting, ask your questions and let your city council know if this is something you’re for or against.
REMEMBER, CITY COUNCIL WORKS FOR YOU!
UPCOMING IMPORTANT EVENTS THIS WEEK:
MONDAY, JANUARY 13TH, 6PM, CITY HALL – CITY COUNCIL MEETING
WEDNESDAY, JANUARY 15TH, 5PM, CITY HALL – SPECIAL CALL COUNCIL MEETING TO DISCUSS PIDs
THURSDAY, JANUARY 16TH, 5PM-7PM – CHAMBER MIXER - SMITHVILLE HERITAGE HOUSE