The Killeen City Council faces some big decisions on what direction the city’s growth and development should take.
In the past two weeks, members have taken a cautious approach — first rejecting a request to rezone the former Gander Mountain property to accommodate a Camping World location, and then tabling discussion of rezoning for a proposed 368-unit apartment complex off Veterans Memorial Boulevard.
Also last week, the council tabled discussion of creation of a Public Facility Corporation, which would work to secure funding for the proposed $51 million apartment complex in exchange for financial considerations during an extended lease agreement with the developer.
Taken together, these actions make it a bit difficult to get a read on the council, which just last month wholeheartedly endorsed a $349,000 expenditure for creation of a new comprehensive plan to guide the city’s development.
Still, members are to be commended for asking for more time and information before committing to a decision on these consequential issues.
Part of that information-gathering process played out Thursday night, as a council-requested town hall workshop drew more than 40 residents to hear a presentation by Ohio-based NRP group, which provided details on how the developer would work with the city, through the proposed Public Facility Corporation, to provide high-quality housing geared to tenants in a wide range of income levels.
The concept of a Public Facility Corporation, or PFC, is authorized under Texas law, and it is a bit complicated. According to the city’s summary, creation of a PFC is to allow broad power to finance or to provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing, and placement in service of public facilities in an orderly, planned manner and at the lowest possible borrowing price.
That sounds like a mouthful, but basically, the city works in partnership with the developer, through the PFC, securing low-interest financing and leasing the land the project occupies. In this case, that’s about 26 acres between Terrace Drive and Veterans Memorial Boulevard, extending from W.S. Young Drive to Conder Park.
As City Manager Kent Cagle explained it, the facility corporation would own the land, NRP would build the project, the corporation would then own the finished project, and NRP holds the lease. Additionally, NRP would be responsible for operations of the development, including rental rates and payment.
One of the sticking points for some residents is the fact that the housing development is tax-exempt, which is a huge break for the developer. However, the developer must rent at least 50% of the units to tenants who earn 80% or less of Killeen’s median income.
The developer is also solely responsible for the financing of the project, with 35% cash down and the other 65% in a construction loan — meaning the city would not be liable for any part of the funding repayment.
While the city would reap some payments from the developer over the lifetime of the agreement, it also could be forgoing up to $2 million annually in property taxes, assuming the same project were to be built without tax-exempt status.
But on the plus side, the city would be gaining a high-end housing complex in an area of town that desperately needs the help.
Also, the land on which the property would be built has never been developed, and the city is drawing only a small amount in property tax revenue — so any income from a development is better than what is coming in now.
In addition, the development would provide affordable, quality housing for lower- to moderate-income residents who would not otherwise have the opportunity.
Finally, the establishment of an aesthetically pleasing housing complex in Killeen’s northern sector could jumpstart other developments, including the arrival of a new grocery store — something that part of town has been without for more than a year.
On the downside, the new complex, with its tax-exempt status, likely would skew the local rental market. That dynamic was on display at Thursday’s public hearing, as several local property owners warned about how the new development could cause problems for owners of existing rental units in the central Killeen area.
Overall, however, the development would be a boost for the city and many of its residents and should be thoughtfully considered — along with the creation of a PFC — once the council has the chance to dig into the details.
The same could be said for the proposed rezoning along Central Texas Expressway for Camping World, although the council turned it down on the first try.
For all the time the council has spent considering the pros and cons of NRP’s proposed housing development, the members gave short shrift to proposed rezoning of the Gander Mountain property.
First of all, the property, with its 52,000-square-foot retail building, has sat vacant for more than three years — with the exception of seasonal leasing by a Halloween supplies company and more recently, a mattress sales outlet.
The rezoning request had sought an uprgrade from the current B-3 business zoning to the more intensive B-4, likely for the purpose of adding a repair shop for working on recreational vehicles and motor homes.
Camping World is a nationally known company that sells high-end camping vehicles — and with Killeen’s contingent of military retirees and young families, the city would seem to be a good fit for such a venture.
But the council turned down the rezoning request, and the prospective property buyer subsequently withdrew a request to rezone the adjoining lot, which is vacant.
It’s hard to say whether a business will succeed in the long term, but the proposed Camping World acquisition seemed like a good bet.
Council members would be well advised to reach out to the prospective developer once again to see if an arrangement can be crafted that satisfies both parties.
Long-term planning is necessary, and Killeen officials are showing they are committed to growing the city wisely and methodically over the next 20 years.
But in the meantime, it’s important to appreciate the potential of current development opportunities, especially when they target undeveloped or already-developed areas of town.
Sometimes the best way to grow a city is to do it from within.