Kyle City Council restarts annexation process

"They've showed us the proposed master plan, and they tell us that if we will allow them to continue with their development and create a [municipal utility district], they will proceed with that planned development community," Lambert said. "If we annex them they will lose their buyer, and they will not proceed with that particular project."

GLO spokesman Jim Suydam said the office has been negotiating the deal for "several months, at least."

Suydam said the developer is considering the creation of a municipal utility district, or MUD, which would levy taxes on residents who move into the community. Annexation into the city limits would force residents of the development to pay both city taxes and MUD taxes.

"That would be taxes on top of taxes," Suydam said. "It would probably make this deal go south."

In the event a MUD is formed, it would be left outside the city limits until the developer's investment was paid back, at which point it could be brought into the city limits.

Annexation would benefit no one, Suydam said. The GLO would choose not to develop the land until another offer came along, and because the GLO is a government agency and does not pay property taxes, the city would receive no income on the land.

"We're not going to absorb a loss. We're going to make money on this," Suydam said. "That's what we do. That's our job."

Council approved moving forward with annexation by a 4-3 vote but left the door open for a negotiated annexation. Council members Diane Hervol, Becky Selberra and Samantha Bellows LaMense voted against annexation.

Planning Director Sofia Nelson said city staffers are continuing to work with the owner of the tract on an agreement whereby the developer commits to adhere to city development standards but is able to remain outside the city limits and taxation.