Staff recommends that the City Council approve the Development Agreement with KSKC Properties, LLC.

At the September 12, 2011 meeting, City Council approved the annexation of Tract 1 of Certificate of Survey 1591 and Tract 1 of Certificate of Survey 1596.  The property is located along the South Frontage Road east of the City County Drain.  KSKC Properties, LLC desires to develop the property as a commercial development.  As a condition of annexation, a Development Agreement is required prior to any site development outlining necessary public improvements. The Development Agreement outlines the off-site improvements necessary for development, including access to the site, construction of water and sanitary sewer, and storm drain. Specifically, the Development Agreement outlines potential Developer cost recovery for one-half of the cost of the water main through a City Compensation Agreement.  The premise behind cost recovery of one-half of the water main cost is that the water main lies along the South Frontage Road and I-90 right-of-way corridor to the north.  The South Frontage Road and I-90 corridor isn't available for development.  In addition, the Development Agreement provides potential for South Tax Increment Finance District (TIFD) funds to be used up to one-half of the cost of the water main construction.  The basis of using South TIFD funds is that the construction of the water main completes a water main loop that provides flow to existing properties as well as those types of industries targeted/desired by SBURA that require looped or redundant water mains and higher flows.  Both the Compensation Agreement request and South TIFD fund request would be separate future Council actions from this Development Agreement action.  Alternatively, staff included a provision in the Development Agreement to allow for City Council approval of the cost of the water main construction to be funded through a budget request consisting of combined City water funds and South TIFD funding.

The Development Agreement provides for City required off-site improvements should the property be developed without a subdivision plat.  In summary, the Development Agreement for this Council action generally includes the following conditions or improvements:

• Construction of a water main in South Frontage Road by Developer
• Potential, but not guaranteed, funding mechanisms for reimbursement of a portion of water main costs to Developer:
  • South TIFD Funds
  • City Compensation Agreement Request
  • Alternate of City budget request consisting of South TIFD and City water funds
• Construction of a 10-foot-wide multi use trail along the south side of the South Frontage Road (north side of Developer Tract)
• Outlines requirements for serving property with sanitary sewer and storm drain
• Outlines requirements for a Traffic Impact Study

City Council may:

• Approve the Development Agreement with the property owner; or
• Disapprove the Development Agreement. If the agreement is not approved, the responsibility for infrastructure improvements would be in accordance with policies in place at the time of development.

There are two requirements of the development agreement that would not be required upon site development.  Section 5 requires the dedication of right-of-way.  If the site develops without subdividing, the City would not be able to acquire right-of-way.  Section 7 requires an easement for and construction of a multi-use trail on the south side of the Frontage Road.  If the site develops without subdividing, the City would not be able to require this easement or the construction of the trail. 

There is no financial impact in regards to the water line.  Per this agreement, the developer is required to construct the water line.  The agreement includes options for alternate funding, however, that funding would require future council action.

The financial impact of the remainder of the agreement is dependent on policy changes that may occur before development. If development occurs before any changes to the City's development policies, there would be no financial impact. If development occurs after City development policies change, the financial impact would be dependent on the changes.