El Campo City Council officially restarted annexation and financing efforts for the pending rail-supported warehouse development east of town.
Monday, council unanimously called for a public hearing for the creation of a Public Improvement District or PID which will allow developers to bill on all companies within the rail park and use those funds to pay for infrastructure like roads and rail. Councilman Jeff Allgayer was not present.
“They’re trying to time the PID, issuance of bonds and annexation so they align,” City Manager Courtney Sladek told council.
Councilman John Hancock questioned when the land for the proposed rail park will actually be purchased by developers and what the possible liability for the city would be should the effort fail.
The PID plans to borrow up to $15 million for infrastructure improvements. “The city will pay for none of the costs,” Sladek said.
The last annexation request, canceled in April, is scheduled to go before the Planning & Zoning Commission Aug. 21 and be presented to Council Sept. 9.
A section of the park must be annexed to receive city infrastructure and $3 million in City Development Corporation of El Campo support.
Council also approved selecting P3WORKS, LLC of Austin to set up the PID in a 6-0 vote with Allgayer not present.
“All costs incurred associated with this agreement will be paid by the PID and not the City of El Campo,” Sladek said.
P3WORKS, LLC currently works with 63 PIDs throughout the state.
Councilwoman Gloria Harris wanted assurances the city would bear no costs. “If we got to pay it, I don’t want to do it,” she said.
Developers are Stonemont Financial Group, Ridgeline Property Group, Kansas City Southern and NAI Partners, but the City of El Campo had the power to select the professional services agreement.
The Southwest International Gateway Business Park was anticipated to have Phase 1 site commitments by the end of 2018, but, so far, none have been announced.
Phase One is estimated at $125 million, although the city budget will not immediately benefit from the tax value.
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.