Update March 16, 10:45 a.m.: After going to press with Volume 5, Issue 11, the cities of San Marcos and Kyle issued a news release on the updated plans for the property at Yarrington Road and I-35. According to the news release, the new plan for the property does not include a truck stop, but will include a 10,000-square-foot convenience store and eight-pump gas station, as well as the potential for hotels, retail and apartments. A complete plan for the property is expected in May. 

Kyle Mayor Todd Webster is not sure what will go on the 47.74-acre tract of mostly undeveloped land at the northwest corner of Yarrington Road and I-35 just north of San Marcos, but he said it will need to be rezoned.

A long-in-the-works project that has previously included plans for a large truck stop drew protests from nearby residents at a Kyle Planning & Zoning Commission meeting Jan. 26. Residents cited concerns as wide-ranging as pollution and human trafficking—which the FBI has linked to truck stops—as reasons the commission should deny the developer’s request to rezone the property, which currently contains a mobile-home community.

Jeanne Vanderhoof, a San Marcos resident who recently moved from Kyle to the Blanco Vista neighborhood near the property being considered for rezoning, said she was not aware of the potential for a zoning change on the property when she bought her home. Vanderhoof is “mortified” at the potential for what may go on the property near the entrance to her neighborhood, she said.

Had she known about the potential for a truck stop to be built there, she would not have moved to Blanco Vista, she said.

“No way, Jose,” she said at the P&Z meeting Jan. 26. “I believe it will impact all of Blanco Vista and that area’s property values.”

PGI Investments, the developer of the project, withdrew the rezoning request at the Jan. 26 meeting, which would have gone to Kyle City Council with a P&Z recommendation of denial. The firm is now working with local leaders in the cities of Kyle and San Marcos, as well as Hays County, on a new proposal.

Hugo Elizondo, an engineer with Cuatro Consultants, the company performing engineering and planning work for the project, said the specifics of the development have not been determined. Cuatro and PGI are negotiating the details with representatives from Kyle, San Marcos and Hays County.

“To try to say you shouldn’t develop this commercially is an absurdity,” Webster said. “It needs to be developed. How it develops is an open question.”

Differing needs

The issue of how to develop the property has highlighted the differences between San Marcos and Kyle.

In Kyle, the tax burden is mostly on single-family residential properties, which Webster estimated accounts for about 85-90 percent of the property tax base in his city. In San Marcos, the balance between residential and commercial property tax revenue is closer to a 50/50 split, according to city statistics.

Webster said the city is not in a position to easily turn down a large commercial development that will generate sales and property tax.

“If I’ve got somebody who wants to put construction manufacturing in there tomorrow, how do I say no to that?” Webster said. “I need jobs. I need a tax base. I need a commercial tax base.”

Terrence Irion, an attorney representing PGI, wrote in a letter to the city of Kyle that the development could provide a boost in tax revenue to the city.

“As has often been said by Kyle officials in recent years, business growth is key to stabilizing the tax base and taking the burden of paying for growth off the shoulders of homeowners in the community,” Irion wrote.

In San Marcos, the Prime and Tanger Outlets, among other commercial properties, have historically provided the city with a strong tax base.

Single-family homes—such as that of Blanco Vista—have been harder to come by in San Marcos, but San Marcos City Manager Jared Miller said he sees that changing.

“We are very blessed when it comes to sales tax,” Miller said. “That said, I think we are growing at a significant rate with both residents and
single-family growth.”

Much of that growth is planned near the property being considered for rezoning. The city of San Marcos has planned a municipal utility district known as the LaSalle MUD just north of Yarrington on the east side of I-35. That project is planned to include more than 7,000 living units, Miller said. Additionally the city recently approved a public improvement district just south of Yarrington and east of I-35 that will include a mix of commercial and residential properties.

‘Highest and best use’

Elizondo said he expects to bring a new proposal for the site to the public by May.

“We’re working with all impacted jurisdictions, and by that I mean working with San Marcos, working with Hays County, working with city of Kyle planners in order to determine the highest and best use [of that property], for everybody’s sake, including our client,” he said.

Hays County, as well as the cities of Kyle and San Marcos, have each made or are planning large investments in the area near the property under consideration.

In addition to the MUD and PID the city approved near the site, the city of San Marcos has partnered with Hays County and the Texas Department of Transportation to fund construction of the FM 110 loop, which will bypass I-35 on the city’s east side.

The city of Kyle is planning to spend $7 million to extend utilities to the I-35 and Yarrington area.

“We’re all working in the same direction, and I feel like we’re making progress,” Miller said of the discussions among the stakeholders.

If the rezoning is approved the developer will have to submit a site plan laying out what it wants to do with the property. That plan would then go through another approval or denial process with the city.

“I can’t say no to commercial zoning on I-35,” Webster said. “I intellectually can’t make myself do it. It would be an overly political decision that would just be pandering.”