New Braunfels City Council denies 196-acre MUD development agreement

During their July 25 meeting, the New Braunfels City Council voted to deny the development agreement between the city of New Braunfels and Lennar Homes of Texas Land and Construction to create the Kyndwood Municipal Utility District. The MUD would consist of approximately 196 acres situated within the city's extraterritorial jurisdiction, or ETJ, in Comal County on the west side of I-35 North.

The property is occupied by two houses and some buildings supplemental to the original farms on the land. The area already includes neighborhoods and quick access to I-35, according to Christopher Looney, planning and development services director for the city of New Braunfels.

“A municipal utility district is a special district that is allowed by state law. It functions like a miniature government outside of city limits. And it's a tool that helps developers finance the cost of developing infrastructure,” Looney said. “[This includes] roads and sewer lines and water lines, for example. A MUD is then managed by an elected board of directors who live or own businesses within the MUD. The MUD can then levy their own taxes and fees on themselves and then repay the developer's debt or their upfront costs.”

The petitioner requested several edits to the staff-proposed development agreement, including allowing construction to meet outdated codes and waiving permitting and plan review fees. Another request made by the petitioner was the ability to contract out their own building inspections and add more land to the MUD without having to obtain approval from the City Council.

According to Looney, the petitioner is “mostly in line” with the staff-drafted development agreement, which includes requirements for housing diversity and landscaping, pedestrian lighting and other guidelines for MUDs. But the petitioner disagrees with providing and maintaining street trees, which does not align with staff recommendations.

The city of New Braunfels staff recommended denying the development agreement, citing the MUD would be inconsistent with the Envision New Braunfels Plan. However, staff would approve the agreement if the applicant is willing to adopt the proposed changes provided by city staff, according to Looney.

“If consent is denied by City Council tonight, the petitioner has previously indicated they would be interested in repetitioning and then continuing negotiations with staff on the development agreement,” Looney said during the July 25 meeting.

Jordan Matney, New Braunfels assistant city manager, said the MUD has gone “above and beyond” since the beginning of negotiations with the city and New Braunfels Utilities, but they may need more time to reach an agreement.

“We needed time to review what they submitted, then we issued comments to them,” Matney said. “They needed time to review and then get comments back to us, and I think we've probably just run out of time.”

Developers whose applications are rejected by a city can pursue other procedures or ultimately appeal their request to the Texas Commission on Environmental Quality to develop without the city's consent, according to Looney.