In June, the Texas Legislature passed House Bill 4103 and HB 4638 with coordination from the city of Leander; state Rep. John Bucy III, D-Austin; state Sen. Charles Schwertner, R-Georgetown; and Alex Tynberg, principal and owner of the Northline Leander Development Co.
“[The bills] take Northline to a new level of sophistication,” Tynberg said. “It gives another really important tool to get [projects] and enhancements built and completed earlier than otherwise possible without that financing tool.”
The mixed-use project is located in Leander’s transit-oriented development area between US 183 and 183A Toll along San Gabriel Parkway, and construction began in March 2020. Part of the intent of the project is for the city to relocate City Hall to Northline with an adjacent qualifying hotel, but nothing is official, and plans are being drafted to firm up that vision, Tynberg said. A comprehensive facilities plan is underway to assess staffing needs, facilities needs and construction needs of city facilities.
HB 4103 allows the city to capture a portion of hotel occupancy, sales and mixed-beverage taxes within a 1,000-foot radius of a qualifying hotel within the next 10 years. A hotel qualifies if it has a conference space of at least 10,000 square feet, said Cameron Goodman, the city's economic development director, and the taxes levied are supposed to go back to certain projects for the hotel and infrastructure that serves it.
“If a restaurant is built within the radius of the hotel, then that sales tax can come back and help pay off the hotel,” Goodman said. “It should be very helpful.”
HB 4638 enables the creation of the Leander Municipal Management District No. 1. Management districts are political subdivisions that tax property owners within the boundaries of said district. In this case, the MMD will tax only property owners within the 115-acre Northline development, Goodman said.
The purpose of management districts is to maintain employment, commerce, economic development and a range of other categories. MMDs achieve this by financing capital improvements or services beyond what the city of Leander can offer and not a replacement of those services, Goodman said.
The project also includes about $80 million in new infrastructure for the foundation of the development. The city’s tax increment reinvestment zone board in July allocated about $14.5 million for infrastructure construction. Leander City Council approved the TIRZ amendment Aug. 5. In 2018, City Council approved $15 million in funding for project infrastructure. In February 2020, the council approved a $13.4 million construction contract for Phase 1.
Infrastructure work will continue over the next 12-plus months, and construction on part of the building could start by the end of the year. All commercial projects are expected to begin by early 2022. Buildings, the hotel and the convention center project are estimated to start later.
Tynberg said the project will allow the city to generate a lot more revenue, and residents will get their own area similar to The Domain in Austin. Northline officially announced one tenant, The Hub, in October, but Tynberg said the company is in talks with over 30 groups related to restaurants, bars, retail, fitness, grocery and entertainment.
“This project was the vision of the city leadership for the last decade,” Tynberg said. “I know that there is a significant portion of the Leander population that is very interested in not having to leave the city in order to get their retail, restaurant and entertainment needs met.”
Taylor Girtman contributed to this report.