Lazy Oaks Ranch, Version 2.0 – La Cima

By Melissa Jewett, Publisher

For the second year in a row, the City of San Marcos was named the fastest-growing city in the United States for cities with a population greater than 50,000. However, do these numbers accurately reflect the long-term viability of our community? 

With no new single family residential developments under construction, the city is limited in its housing options and how to attract new businesses that will help bolster the long-term viability of its population. While the thousands of multifamily residential units constructed over the past several years certainly serve a need within our growing community, they do not “bolster the middle class”, a specifically identified goal of the City Council.

Enter Lazy Oaks Ranch, Version 2.0.

Originally approved in February of 2013, the owners of Lazy Oaks Ranch have come back to the City with a bold new plan that they believe will be “best in class, best in region, and best in the Country”. Renamed and rebranded to La Cima San Marcos, the owners have acquired additional property that provides for better access, improved regional mobility, increased commercial opportunities, and additional, high quality single family residential development that will definitely help to “bolster the middle class.”

If approved, La Cima San Marcos will be a 2,000 acre development located at the intersection of Wonder World Drive and Old Ranch Road 12. It would extend southeast towards the Paso Robles development (approved in 2010) and to Centerpoint Road through Paso Robles (now Kissing Tree) and La Cima to create regional connectivity as an outer loop beyond Wonder World Drive. 

The owners have requested an amendment to the existing Lazy Oaks Ranch Development Agreement that would allow for the inclusion of the additional 600 acres, approximately.

They also want to redesign the subdivision to involve a high quality commercial and corporate campus office area. 

In summary, the Development Agreement amendment would allow for the following additional items:

• Construction of a maximum of 2,400 single family dwelling units
• Preservation of approximately 800 acres of open space
• Construction of Centerpoint Road as a regional transportation connection to IH 35

Consistent with the existing agreement, the proposed amendment would retain the following:

• Connection to City water and wastewater utilities
• A variety of lot sizes allows for a variety of housing types
• Residential and Nonresidential design standards that exceed City standards
• Water quality standards that exceed City and State standards

The proposed amended agreement contains the following changes:

• Creation of a Public Improvement District (PID) for financing infrastructure
• Deferred annexation of the residential portion of the property for up to 30 years

While the bulk of the proposed development remains similar to the existing approved agreement, it does have several substantially different items that can be perceived as positives or negatives. 

Let’s start with the simple items that remained the same

Connection to City utilities will prevent the development of a potentially lower quality subdivision developed to minimum County standards for private water wells and septic systems. Private water wells for residential use go largely unregulated, allowing for virtually unlimited extraction of our most precious natural resource.

Construction of septic systems over the recharge zone would allow for unmonitored disposal of sewage over an area that is deemed as our most sensitive area.

The City of San Marcos needs additional housing options in a location that is desirable. The west side of the City is the long sought after development area for the middle class, executive housing, and allowing this subdivision will fulfill that need.

The residential and nonresidential design standards will guarantee a high quality development and the water quality standards will ensure the protection of our natural resources.

Now let’s take a look at the changes

The additional land allows the primary entrance to occur at an existing, controlled intersection which increases safety for residents. The previous entrance shared with the San Marcos Academy was in a much more dangerous location than the controlled intersection of Wonder World Drive and Old Ranch Road 12.

This additional land also provides for primary frontage along a major existing transportation network that will service a much larger regional population than the previously proposed small, neighborhood oriented commercial. Also, the development of a corporate campus, as proposed, would fulfill a much needed void of high class office space for economic growth.

The proposed amendment increases the overall maximum number of dwelling units to 2,400 versus the previously approved 1,750. While this is a noticeable increase, the overall project density is actually reduced, which can be a net positive change.

An additional net positive change is the increase in preserved open space. Approximately 40% of the overall project area will be set aside and preserved in perpetuity.

This includes a 100 acre parkland area along Purgatory Creek, which will allow future connection to the existing Purgatory Creek Greenspace as well as approximately 700 acres to be donated to Hays County as the beginning of their Habitat Conservation Plan.

The County will be able to take this land and sell credits to public and private sector developments that will adversely affect habitat as part of the US Fish and Wildlife regulations for endangered species.

The County had previously planned to acquire 500 acres to begin the development and the owners of La Cima San Marcos will instead be donating 700 acres for the County’s benefit. This land comes free of charge and will allow the reallocation of monies within the County budget to other items of need.

The proposed amendment also indicates the construction of Centerpoint Road through the project. Various maps have indicated this will continue through adjacent properties and ultimately provide an additional connector to IH 35. In many of the presentations made, it appears the County will be facilitating the development of this roadway, which is appropriate so long as they will own and maintain the roadway.

The major differences lie with the creation of a financing mechanism to facilitate the construction of infrastructure (the PID) and the deferred annexation of the residential portion of the property.

There is no question that commercial development generates the highest tax revenues for the City. Not only is the ad valorem property tax revenue substantially greater than on residential property, but commercial development also provides sales tax revenue and the City of San Marcos relies heavily on sales tax revenue.

Approximately 46% of the City’s budget is collected out of sales tax revenue. The new commercial area will allow for an economically viable, substantial increase in collection of property tax and sales tax revenues to the City over the previously approved development.

The owner has requested deferred annexation of the residential portion of the property until the proposed financing mechanism has been retired, or a maximum of 30 years. While this is a substantial change from the currently approved development agreement, the City has commissioned a study to show the economic feasibility of this request.

It is long believed that residential development is a net negative fiscal impact on governmental entities. However, there does come a point when the type of development and the overall diversity of development could make the overall project a net positive if it has the appropriate balance of residential and nonresidential development.

To date, the City has not completed the proposed study but, based on the meetings that have been held, the study may determine the future outcome of this proposed development.

As with every development in San Marcos, there are pros and cons to consider. While this developer is talking about best in class and best in region, if this development does not proceed as planned, we will continue to move forward.

Will we have a much different appearance and demographic as we move forward, absolutely, but we will move forward.