Annexation of the pending rail-supported warehouse project has been delayed, not stopped, officials say, as developers work to line up its finances and rescind their application.
Annexation proceedings, however, are expected to restart next month.
“It has been rescinded at this time, but what they are actually doing is sliding annexation, pushing it back to time it with the Public Improvement District bonds,” City Manager Courtney Sladek said Thursday. “The Public Improvement District is a development tool to help facilitate this project, it allows businesses that settle there to pay the cost of infrastructure.”
The PID creates a district and can levy a not-quite-tax within that district, rather like all the stores in a shopping mall paying for the plumbing and other service lines inside the mall itself.
“We regret that we are unable to proceed with annexation as originally intended, but hope that the city understands that we fully intend to reapply for annexation,” Southwest International Gateway Park developer William I. Markwell III told council in the May 21 letter rescinding the annexation request.
To proceed, the park request will have to start at the beginning, making full annexation likely in the fall.
The rail park — a 540-acre development at the intersection of CR 421 and U.S. 59 — will be requesting voluntary annexation, starting with the western most 130 acres.
City Council will be updated on the project during its regular session Tuesday night, but will not be asked to take action.
State legislation to create another funding mechanism for the industrial development has now been approved as well.
H.B. 4680 creates a Municipal Management District to pay for more than $25 million in infrastructure (roads, utilities and rail) by essentially imposing its own levy upon development within its boundaries.
The city General Fund budget will not benefit from tax dollars generated by the park in the first several years. Instead, those tax dollars will be reallocated to pay costs for El Campo frontage roads until that debt is retired.
The school district, county and other taxing entities will directly reap the tax as soon as the development opens.
Developers are Stonemont Financial Group, Ridgeline Property Group, Kansas City Southern and NAI Partners.
Ridgeline officials predicted earlier the project would have Phase 1 site commitments by the end of 2018, but, so far, none have been announced.