A developer involved in a controversial land deal last year is continuing an effort to set up a new fresh water supply district that will one day serve nearly 5,000 new homes and businesses outside of Northlake in Den­ton County.

The developers, Realty Capital Belmont, will have a public hearing June 26 to discuss creating the Belmont Fresh Water Supply District No. 1 on a 697-acre tract of land at the northwest corner of Interstate 35W and FM407.

Denton County Judge Mary Horn said the communities around the proposed district are in favor of the development because it will provide them with better utility services and access to water lines.

“The three different communities there [Northlake, Argyle and Flower Mound] worked collectively to get this done,” Horn said. “It appears that this is going to be a win-win.”

The public hearing is scheduled for 9:15 a.m. June 26 at the Courthouse on the Square.

The controversy involving Realty Capital Belmont occurred last fall when the developer rented out three mobile homes to six people for lower-than-market rent on almost vacant land outside of Northlake. The developer disputed that the rent was lower than market.

The six renters filed the required paperwork to establish permanent residency, which paved the way for them to request a special tax district election, according to documents obtained through open records requests.

When contacted last fall, Mark Shegon, a vice president with Realty Capital Belmont, said no one was living on the property when the developer bought it, so the business needed to find people to establish the district. Realty Capital Belmont representatives did not return phone calls Tuesday.

Fresh water supply districts were originally created to help poor and rural areas acquire adequate infrastructure, but developers have discovered loopholes in the laws, allowing them to build with financial assistance from future taxpayers.

The districts’ purpose is to conserve, transport and distribute fresh water within the area they serve.

Some developers have turned to creating fresh water supply districts. Once a district is formed, a developer can issue bonds to pay for water, sewer, roads and other improvements. Developers and their investors prefer the districts because the bond repayment risk is passed to the homeowners who move into the district and repay the bonds as part of their property taxes.

MONTY MILLER JR. can be reached at 940-566-6875. His e-mail address is mwmiller@dentonrc.com