The planned Co-Op District will be a mixed-use, walkable development with a variety of components, including high-density residential, retail, entertainment and restaurants, along with a civic center and offices, all on a 25-acre plot of land. It will be located on what is known as The Gin property, about 25 acres north of Hwy. 79 and west of downtown Hutto, which the city bought in 2004.
A tax increment reinvestment zone, or a TIRZ, is an economic development tool in which a public entity or private developer invests in public infrastructure in an area. To repay the debt, the future owners or tenants within the zone pay portions of the future property tax revenue derived from within the TIRZ district.
As part of the proposed deal, the county will contribute up to $5.5 million, or half of the incremental tax increase they would receive over the 20-year term of the project, to provide funds for a road and storm drainage system to be built.
Despite approving the motion unanimously, several of the commissioners were concerned about moving along too soon, but said Williamson County would not assume any risk.
“I continue to have reservations about the debt up front and that structure. The TIRZ that we’ve all referred to, the other ones in the county, you’ve got to have value on the ground before you can issue debt,” Precinct 2 Commissioner Cynthia Long said. “At the end of the day, that’s on Hutto, and the city manager has assured us that that’s going to be the city issuing that debt and not the TIRZ and not the county, so it’s going to be on them and that’s their choice.”
Precinct 3 Commissioner Valerie Long said she also struggled with her decision, because she likes the project and the economic development opportunities it will bring Hutto.
“It seems to be the cart before the horse in some aspects,” Long said. “I’m not sure why the city of Hutto would take the risk of doing that, but, again, to Commissioner Long’s point, it’s not on the county to help in any regard to that, in the future if anything were to happen.”
“The only time the county puts money into the TIRZ is when taxes have been paid, Covey said.
“That means value has to be on the ground first, and from that, taxes are paid by the developer or the landowner, whoever it is, and we reimburse for that. It’s not on us and we’re not going to pay anything if the value’s not what it is,” Covey said.
However, Hutto city officials insist they have an agreement to protect the city’s interests.
“Both the developer and I have reached an agreement that there will not be a bond issued on this project until there’s 60,000 square feet of space that’s built on the property,” Hutto City Manager Odis Jones said.
The developer, MA Partners, has indicated they have five contracts in the works with people interested in leasing that space, who are waiting on county commissioners to vote, Jones said. The 60,000 square feet of space would contain roughly three restaurants, two retail stores and a movie theater.
Once that is completed, the city of Hutto would be a conduit issuer of the bonds, along with Dallas-based Preston Hollow. Preston Hollow, in partnership with the developer, would purchase the bonds, and 50 percent of the property tax and a tax assessment on the developer's property would go back to paying the bonds off, Jones said.
“We appreciate the county’s work on this and look forward to working with them on the project,” Jones said. “We think it’s outstanding project with a positive impact on the city to come.”
The court also approved agreed to exchange county property with the property owned by the City of Hutto at Thursday's meeting.
The county’s property, located at 350 Exchange Blvd., Hutto, is appraised at more than $1.85 million, while the city’s office property was appraised at $583,000 and sits at 321 Ed Schmidt Blvd., Hutto. The city of Hutto will pay the difference, plus $70,000 in moving costs to the county.
According to the contract, the transaction must be completed within the 180 days of the deal being approved.
The county property is being purchased with the plan to build a hotel on the site, Gattis said. The site, which had previously been exempt from taxes, will be added back onto the tax roll, along with the value and improvements of the hotel.