Talks between developer, city stall

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PILOT POINT — Disagreements between City Council members and a land developer in Pilot Point have resulted in a standstill, leaving the developer seeking another way to get his residential project started.

Since November, Eland Farms developer Van Nichols sought to enter into an agreement with the city that would allow for the creation of a municipal utility district in the city’s extraterritorial jurisdiction, or ETJ.

By operating a utility district, Nichols can issue bonds for the installation of the water and sewer services needed to support his 800-acre residential and commercial project. Nichols can also set and collect taxes on properties within the district to generate revenue and to pay the bond debts.

However, conflict emerged after he and the city could not agree on terms regarding annexation, which is the city’s ability to incorporate property into the city limits and collect property taxes.

City leaders said they wanted to annex the property within 15 years, but Nichols requested an approximate 35- to 40-year plan.

“I believe that’s when the talks fell apart,” City Manager Tom Adams said.

The council agreed not to move forward with the agreement during a meeting on Monday.

By state law, a city cannot collect taxes on properties in its ETJ until it’s annexed, and city officials said they would like to add the development to the tax base.

When talks first began, city officials said they believed an agreement with the developer was almost guaranteed to happen.

City staff members told council members that Nichols was willing to negotiate and work toward an agreement.

City leaders and the developer agreed on several items during the months of discussion, including sharing some of the tax revenue. Nichols also agreed to add features such as trail systems and parks at the city’s request.

However, in the last couple of weeks, Nichols said he felt the council members wanted more than he was willing to give.

“I’ve been willing to work with the city,” he said. “I don’t want to develop my land and then have the city come in and tell me how I should regulate it.”

Nichols was seeking state legislation to approve his district, but without the city’s consent, he will go a different route.

By law, if a city doesn’t give consent, landowners can petition city officials to expand infrastructure to their property at the city’s expense, but the city is not required to do so.

If, within 120 days, the city fails to provide services, the applicant may petition the Texas Commission on Environmental Quality for the creation of the MUD and the city’s consent is presumed by TCEQ.

Simply put, Nichols will attempt to bypass the Pilot Point council by having his district approved by the TCEQ and exclude the city from any future agreements.

The difference between a TCEQ- and a legislative-created district is that the TCEQ does not grant a developer the authority to build roads whereas state legislation does. The county will have to foot the bill for road construction for a district created by the TCEQ.

“I think I gave the city a fair opportunity,” Nichols said.

If created, Eland Farms would be the fourth utility district in Pilot Point’s ETJ.

Four Seasons Ranch, Talley Ranch and Smiley Road (formerly Shiney Hiney) are the three districts now in the city’s ETJ. Created between 2005 and 2007, all sit undeveloped, in anticipation of the Dallas North Tollway expansion, Pilot Point Mayor Greg Hollar said.

Hollar said he feels there are too many questions left that he needs to answer before the city consents to another district.

Nichols said he believes the city’s hesitation to give consent is a result of the city’s history with the other three utility districts, which have annexation plans that exceed 15 years.

Adams said there’s still time to find a solution with Eland Farms that can make both parties happy.

“I anticipate there will be another opportunity to reach an agreement,” he said. “But right now, the council has decided not to take any action.”

JOHN D. HARDEN can be reached at 940-566-6882. His e-mail address is jharden@dentonrc.com.


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