The Hutto Economic Development Corporation Type B board tonight voted to issue up to $10 million in a series of sales tax revenue bonds in order to develop an industrial park on the city’s ‘Hutto Rail Central’ property.
In a separate meeting immediately following the Hutto EDC vote, Hutto City Council voted to approve the resolutions passed by the EDC board.
“This has the potential to be the most significant industrial development in Central Texas in the past 100 years,” said Bill Gravell, chairman of the Hutto EDC Type B board. “It’s the right land at the right time, in the right community, for the right reason.”
According to city documents, the EDC and city of Hutto entered into a Memorandum of Understanding with Titan Lone Star LLC, a subsidiary company of Titan Development, an Albuquerque-based development firm to develop the Hutto Rail Central project.
The Hutto Rail Central is a 453-acre piece of undeveloped property located in Hutto’s extraterritorial jurisdiction, west of FM 3349 and south of Hwy. 79. Previous city document and development deals have referred to the property as the “Megasite.”
The performance agreement the city and EDC entered into with Titan, which is also developing the $100 million Innovation Business Park in Hutto, includes mandates on investment from both the city and development company, among other provisions.
The Hutto EDC board voted on five separate resolutions that were all related in one form or another to the Titan deal, including the bond issuance resolution. The resolution originally called on a 20-year bond series worth up to $10 million.
EDC board members amended that language and instead approved to consider a 30-year bond series worth up to $10 million. The final bond series terms will be decided at a pricing meeting in New York later this week, possibly as early as Wednesday.
According to city documents, debt on the bond payments will be paid by revenue generated through the city’s sales tax revenue. The Hutto EDC Type B receives 0.5 percent of the receipts of taxable items.
Language in the resolution authorizing the bond issuance states a notice was posted in the “Taylor Press” on Feb. 11. The Hutto EDC Board did not receive a petition from more than 10 percent of registered voters in the city, which would have required the city hold an election for the bond.
The city of Hutto itself is not issuing this bond series and there are no new taxes created by the city to pay for this bond series.
“This is not the city issuing bonds. This is the city okaying the EDC board to do so,” Hutto City Manager Odis Jones said.
The performance agreement the city and EDC entered into with Titan Lone Star mandates the development firm will invest at least $2.5 million in improvements on a minimum 200,000-square-feet of rail-served industrial speculative space.
Additional provisions in the performance agreement mandate that Titan lease or sell a certain amount of property by a preset date in the future. Titan must also create at least 300 full-time jobs by the end of year 20 of the bond issuance, including 15 full-time jobs in the first year.
The performance agreement mandates the city will in turn create an infrastructure fund. Funds will be used for infrastructure and utilities for the benefit of the development property. Titan will deposit revenue from the difference in the raw land appraisal value and real land appraisal value to that infrastructure fund.
According to Jones, the Hutto EDC Type B is set to purchase the property at a price of 45 cents per square foot. The Hutto EDC Type B will then sell the property to Titan at a price of no less than $1 per square foot.
A clarification was made on this article to accurately reflect the sale price of no less than $1 per square foot for the property.