Zoning changes, annexation on table for projects that could add thousands of homes, millions of square feet in commercial space.

August 25, 2010

By Shonda Novak
AMERICAN-STATESMAN STAFF

The Austin City Council today is expected to vote on zoning changes and annexation for two projects that could bring thousands of homes and apartments, along with more than 4 million square feet of commercial space and more than 700 acres of parks and open space, in a growing part of eastern Travis County.

Fort Worth-based Taurus of Texas Holdings, a partner of Boston-based Taurus Investment Holdings, bought the land in 2006. The company's purchase includes Whisper Valley Ranch — 2,066 acres on the east side of Texas 130 about three miles south of Manor — as well as 240 acres on the west side of 130 at Decker Lake Road, where it plans Indian Hills, with apartments, retail and commercial space, said Steve Metcalfe, the Austin attorney who is working on obtaining the city approvals for Taurus.

Work on roads and utilities, including initial water lines and a wastewater treatment plant, is expected to start late this year or early next year on the projects and take two to 21/2 years to complete, said Douglas Gilliland, president of Taurus of Texas Holdings. Taurus of Texas is the manager for the projects, which would be built out over 15 to 20 years, Metcalfe said.

Whisper Valley Ranch, between FM 973 and Taylor Lane, could include about 5,000 homes and townhomes, 2,600 apartments; 2 million square feet of office and retail space and 700 acres of parks and open space, Metcalfe said. The first lots are expected to be ready for homebuilders by late 2012 or early 2013. The single-family homes would be built first, followed by the townhomes and apartments, Gilliland said.

Gilliland said the first phase calls for about 350 houses, with prices starting at about $115,000 to $120,000 and ranging up to about $250,000, "which we think addresses the market demand."

West of Texas 130 and north of FM 969, Indian Hills would have approximately 1,500 apartments and 2.5 million square feet of office, light industrial and research and development space, Metcalfe said.

The first apartments would be ready in 21/2 to three years, with those in Indian Hills expected to open first.

Gilliland said Whisper Valley Ranch would be a $1.5 billion to $2 billion project when fully completed, while Indian Hills would be a $400 million to $500 million development.

"We're very excited," Gilliland said. "We think we've created a very unique community that's going to have lots to offer, and by the time we're ready to start offering homes, the market will be more stable. We think there's some pent-up demand out there that is growing."

The city will vote on annexing the proposed developments, as well as approving for Whisper Valley a type of zoning that would give Taurus greater flexibility in planning the projects.

The goal is to end up with a project that is superior to what could be created under standard zoning rules, said Jerry Rusthoven, manager of current planning for the city's Planning and Development Review Department.

The city also will consider establishing a public improvement district — a mechanism that would help finance utilities, roads and parks, Rusthoven said. In a first for a residential development, the City Council would be the governing board of the district, which issues bonds and levies assessments on the property owners to pay off the bonds, Rusthoven said.

When Taurus announced the projects, the company initially said the first homes could be under construction by mid-2007.

But the economy and housing market nose-dived, stalling or killing many residential and commercial projects locally and nationally.

However, Metcalfe said, the downturn wasn't the main reason for the delay on Whisper Valley, but rather, "we've been trying to figure out how to create infrastructure funding, and spent the last two years working through that process."

Under an agreement for which the council is expected to give final approval today, the city reimbursement to the developer would not exceed $24.5 million for water mains and the wastewater treatment plant. The bond proceeds will be used to partially repay the city for some of the costs reimbursed to the developer, according to the agreement.

With the public improvement district helping to finance a significant amount of infrastructure, "we'll be able to retain our affordability," Gilliland said.

Gilliland said that although it has taken longer than expected to set up the financing mechanism, "we feel like we haven't lost any time" because of the intervening recession.

"We wouldn't have been able to sell homes as quickly as we would over the next three to four years, so it's really been kind of a win-win situation," he said.