The decision comes after months of negotiations with the developer, which was seeking to update a development agreement approved by council in 2013.
At a meeting in June, councilmen John Thomaides, Ryan Thomason and Wayne Becak formed a subcommittee charged with negotiating the details of the new development agreement.
Thomaides called the negotiation process "challenging" and "frustrating."
"I hope that we learned from this one and try to make it smoother in the future," he said.
Annexation of the property, which is currently outside the city limits, proved to be one of the biggest sticking points in the negotiations. Under terms of the development agreement, the property will remain outside the city limits until a final plat is submitted to the county. At that time, the city will be able to annex the platted property.
Chuck Perry, the developer of the project, said he was pleased with council's decision, and he was "thrilled for the city of San Marcos and thrilled for the region, and we think we've got a great project."
Perry said the next step is to work with the county on formally creating a public improvement district, or PID, the development tool that will be used to fund some construction projects within the community.
The county will be able to issue up to $18 million in bonds to help fund projects estimated to total about $98 million. According to county documents, those projects include elements such as parks and open space, landscaping, and acquisition and construction of water and wastewater facilities.
Will Conley, Hays County commissioner for Precinct 3, the precinct in which the development will be built, has been vocal in his support of the project, championing the effect a development such as La Cima could have on the economy and housing stock in San Marcos and Hays County.
"I'm glad to see some progress," Conley said. "The city has basically agreed to stay out of it. Now it's up to the developer and the county to see if we can make it a reality."
Conley said there is still a good deal of work to be accomplished in determining how and if a PID will work in financing the project. He said he is currently working on coming up with multiple options for the county and developer to pursue regarding La Cima.
"I will be presenting those different propositions to my colleagues here in the near future," he said. "Hopefully they agree that the county can assist in making this project a reality."