Another apartment complex and more retail is on the way to Kyle.

Kyle City Council approved rezoning approximately 45.3 acres of land from retail services, or RS, to planned unit development, or PUD, and R-3-3, or apartments, on the second and final reading June 18 for property located at 22675 I-35 frontage road in Kyle.

How we got here

The city’s planning and zoning commission held a public hearing and recommended approval of the requested zoning change with modifications on May 14, according to agenda documents.

Kyle City Council held a public hearing May 22 and considered the rezoning concurrently with a PUD, Chapter 380 economic incentive agreement and development agreement. In a split vote, the motion to approve the requested zoning changes had not passed due to concerns related to water usage and construction timeline.

On June 4, the dais unanimously voted to reconsider the item.

The project

The mixed-use development, dubbed Project Two Step, is being developed by Capella, an Austin-based commercial real estate and development firm. The project will establish two base zoning districts across three parcels of land that consist of retail and services, apartments, and multifamily homes according to agenda documents.

Parcel 1:
  • 24 townhomes
  • 15 residential flats located in two areas
  • Commercial
  • Parking garage
  • Vybe Spot
Parcel 2:
  • Vybe trail
  • Retail, commercial
  • Water feature
  • Dog park
  • Rooftop pickleball court
Parcel 3
  • Maximum of 350 multifamily units
Project funding

The Chapter 380 economic incentive agreement—which is performance based with deadlines for each phase of development—will help fund project amenities as well as traffic and utility improvements.

The developer will be granted a 50% tax rebate on property and sales tax generated by the project over 20 years—which will be funded by the city’s general fund.

Economic Development Director Victoria Vargas noted almost all of the amenities, retail and multifamily along with the parking garage were going to be built in Phase 1 of the project.

Once Phase 1 is complete, the city will begin the incentive reimbursements. However, if the developer gets to Phase 2 and has not completed it by the performance deadline, then the city will cease incentive payments.

“This ensures that the city is getting what they are paying for in this incentive,” Vargas said.

The developer also made a series of modifications to the PUD to address council’s concerns, which include requiring a parking garage be constructed prior to the multifamily project receiving a certificate of occupancy.

Capella will also regulate its water features by using potable water as well as condensate and stormwater when available, according to agenda documents.