MUD negotiations come to an end

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City of Pilot Point, land owner stop talks on municipal utility district

PILOT POINT — Negotiations between city officials and a property owner in Pilot Point have ended indefinitely, according to officials.

For six months, Eland Farms owner Van Nichols tried to enter into an agreement with the city to develop a municipal utility district, or MUD, on his property, in an effort to develop a residential community.

But during the discussions, talks began to fall apart after city and Eland Farms officials clashed on agreements about annexation.

The city wanted to annex Eland Farms to retain control of future land use, but Nichols wanted to retain his rights as a property owner.

The disagreement led to Eland Farms officials to seek annexation earlier this month from developers of another utility district, Smiley Road (formerly Shiney Hiney).

Both districts are east of Pilot Point and south of FM455.

The Smiley Road district annexed Eland Farms even though the two districts aren’t contiguous, as shown by aerial maps of the districts.

Nichols petitioned for his land to be annexed by the existing district.

He said he wanted his property to be annexed by the Smiley Road district to prevent Pilot Point from annexing his property in the future.

“We tried to address the issues important for both parties and felt we had done that,” Nichols said. “Unfortunately, it became clear that we would not be able to reach an agreement with the city, so we elected to include the property in an existing district as our next best alternative.”

Eland Farms officials were not willing to be annexed up front by the city, and that was a major issue for city officials, City Manager Tom Adams said.

Landowners of utility districts usually don’t want their districts annexed because they don’t want the city dictating what they can and cannot do, Nichols said during a recent City Council meeting.

Eland Farms is located just outside the city’s extraterritorial jurisdiction, or ETJ, in an area city officials hope to grow into. They wanted to annex the 800-acre district to control future land use to benefit the city.

“Developers and cities will continue to pursue the path that best suits their individual goals. While some goals are shared, others are not,” Adams said.

In 2012, Eland Farms representatives approached the city to obtain a developer’s agreement, which developers must obtain before the state Legislature will approve a municipal utility district.

Developers also have the option to petition for a district from the Texas Commission on Environmental Quality, but only if an agreement is not reached between a city and a property owner.

The difference between a legislative-approved district and one created by TCEQ is that the Legislature will grant a landowner authority to build roads, while TCEQ does not.

According to Nichols, annexing into an existing district is another alternative to creating a district separate from the Legislature or the TCEQ.

Pilot Point officials and the developer had reached agreements on various items, including splitting sales tax revenue, constructing trails and bike lanes, and providing funding for public safety.

At one point, city officials said they believed a developer’s agreement with Eland Farms was certain.

But following the advice of city planning experts who visited Pilot Point earlier this year, city officials remained aggressive in their stance to annex Eland Farms.

Before Eland Farms, Pilot Point entered into agreements with developers of three other utility districts, which also sit just outside the city’s ETJ.

City officials entered into developer’s agreements with those districts, and agreed not to annex the districts for 20 years.

The Smiley Road, Four Seasons Ranch and Talley Ranch developments were created between 2005 and 2007, and all three sit undeveloped, in anticipation of the right economic conditions, city officials said.

All three districts are expected to become large residential communities with commercial businesses, but Pilot Point will not see any money from the developments for decades because of the annexation agreements.

“The city prefers annexation or non-development agreements, and we will continue to pursue that path,” Adams said.

Non-development agreements help preserve open space, and annexation helps to guide growth and provide for police, fire and emergency medical services, he said.

The planning experts who came to Pilot Point told city officials that annexation agreements should be established in every case.

“As a result, if poorly planned, these districts can lead to quick but inefficient development, which in the long term costs taxpayers more and may lead the community to miss out on even higher-valued development options,” said Wayne Feiden, a planning consultant from Massachusetts and one the experts who met with city officials.

JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.


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