Pflugerville Council mulls partnering in estimated $1.2B project
The Pflugerville City Council is considering whether the city should partner in a development project, which developers say could be the difference between a $400 million project with a sprawling parking lot to a $1.2 billion project with a hotel, amphitheater and other community amenities.
Council members received a half-hour presentation Tuesday on the Pecan District, a planned 45-acre development at Pecan Street and Heatherwilde Boulevard. Developers will break ground in December on the first project phase, which includes construction of a 260-unit apartment building.
Following that first phase, the city’s involvement will be the linchpin in whether a bevy of community amenities will be built, developers said, which would increase the city’s tax base, greatly increase the local workforce and increase overall quality of life.
Cid Galindo, a longtime developer and former Austin Planning Commission member, owns the property, and is partnering with developer Presidium Group LLC and consulting firm Angelou Economics in the project.
David Wallace, chief operational officer of Angelou Economics, presented council members with initial details on the mixed-use project. With the city’s involvement, he said, the development could provide more than 1 million square feet in office space, 1,208 residential units and a 200-room hotel within the next 10 to 12 years.
Wallace, who served as mayor of Sugar Land when it created a public-private partnership with the Sugar Land Town Center, said he understands the decision Pflugerville council members face in this project.
“We are looking to create a mixed-use lifestyle that I think all of us have seen be very successful in other areas,” Wallace said, referring to the Sugar Land Town Center, the Domain in Austin and the Pearland Town Center.
Using Charles Dickens’ “A Tale of Two Cities” as a theme for the presentation, Wallace said the council must choose between two development scenarios in creating a “western gateway” to Pflugerville.
Those scenarios depend on the council’s comfort level in creating two zoning districts for the property, which Wallace said would provide necessary funding for the additional amenities. Among those are a civic building, amphitheater, splash pad, playground, performance hall and “Festival Street,” according to the presentation.
A tax incremental reinvestment zone and municipal utility district would allow the development group to close an estimated $119 million funding gap for additional space for office, commercial and residential development, Wallace said. That funding would also allow for developing a 200-room hotel, parkland infrastructure, an amphitheater and other amenities.
Wallace said without those zoning districts in place, the acreage would instead include a “sea of parking lot,” leaving less room for community amenities.
Under state legislation, the city is allowed to create a reinvestment zone to incite development that would not occur solely through a private investment. The zoning allows taxes levied within the district to be reinvested into development within the district.
Wallace said creating the reinvestment zone would provide $103 million for a civic building and structured parking, while the utility district would provide $16 million toward outdoor civic improvements and underground infrastructure in the first two phases of development.
“This is a staggering difference between the two developments,” Wallace said. “We’re talking about another 3,000 employees, another 300 retail employees.”
Wallace also said once finished, the larger development would provide an additional $4.8 million in city property taxes, $640,000 in sales tax and $383,000 in hotel occupancy tax for the city’s coffers.
Following the presentation, Councilman Mike Heath questioned why the developers needed to partner with the city if they saw the project as financially viable.
“Are we just subsidizing some developer to come here and put something in place that will have marginal returns for the city?,” Heath asked.
Wallace said the group could still build solely through private investments, but the districts will eventually provide an additional $700 million in assessed property value.
The council only agreed to meet with developers and learn more about financing and other project details. City spokeswoman Terri Toledo said there is no timeline on when the council could take any formal action.
In August 2016, the council approved creating a planned unit development for the acreage. City officials had said the urban-style development would have a mix of retail, residential and office space.
Mayor Victor Gonzales said he has seen the 45-acre property remain vacant for years, and recalled how it once hosted a golf course. The city has long searched for a “win-win situation” for the property, he said, and noted that the city successfully used a reinvestment zone to foster growth in the Falcon Pointe subdivision.
With a mutual agreement in place, he said, he wanted to see the property developed.
“I don’t want to die in Pflugerville and have it be a vacant piece of property,” he said.