San Marcos Planning & Zoning Reconsider, Approve Rezoning Request For Smart Terminal

By, Terra Rivers, Managing Editor

On Tuesday, January 8, the San Marcos Planning and Zoning Commission reconsidered a zoning change request for 934 acres in the San Marcos ETJ to Heavy Industrial.

The property is proposed to be the site of a Smart Terminal Rail Park along State Highway 80 and FM 1984.

The annexation is part of a voluntary request by the property owner and includes approximately 66 acres of property, which is the proposed site of the Katerra Development.

In October 2018, the San Marcos City Council approved an economic agreement incentive agreement with Katerra, Inc., to locate an automated component manufacturing and distribution facility on the site.

The agreement will provide incentives over a ten-year period in the form of annual refunds of a portion of new property taxes generated from the facility and will waive certain development standards.

Katerra is a “technology-driven offsite construction company,” based in Menlo Park, California. The company proposes the construction of an approximately 600,000 square foot facility to manufacture a wide range of building components and materials, including wall panels, floor systems, roof truss assemblies, windows, cabinets and finishes.

Katerra proposes to create at least 542 full-time jobs and make a capital investment of at least $109,000,000, according to staff.

The zoning request is being processed concurrently with an annexation request for the property.

San Marcos city staff presented additional information not available to the commission at their December 11, 2018, meeting.

The commission voted 8-0 with Commissioner Matthew Haverland absent to reconsider the zoning request.

Following a full presentation by city staff, Commission Chair Jim Garber opened a public hearing on the zoning change for the land.

According to the developer, a portion of the Union Pacific Railroad runs along the northern portion of the property and was a significant factor in the decision to choose the location.

Staff said the Smart Terminal will increase train traffic in San Marcos by 1 to 3 trains a week.

The Developer said the trains will not stop and block the main rail line through the city at any time; instead, the trains will be diverted to the smart terminal and merge back onto the main track when its ready.  

Commissioner Mark Gleason said what he was most concerned about with the project was flooding and transportation.

“I know a property owner there, one of them, and I have seen water come across that stream on 984,” Gleason said. “I knew there had to been a floodway; I was concerned about 80 percent impervious total coverage. They’re not even going to come close to that, but that creek being in the floodplain, the amount of buffers they’re going to have to put in, the restrictions they’re going to have.”

Gleason continued to say he was happy to see the project would be directly along highway 110, and he knew there was going to be some initial transportation impact. But he said he believes the location is perfect for the project.

Commissioner Kate McCarty said she was glad the project had returned to Planning and Zoning for reconsideration with the additional information.

During the December 11, 2018, meeting, McCarty voted in favor of approval of the project; however, she acknowledged that the commission did not have all the information they needed to make an informed decision the first time.

“If you talk about $4 billion worth of development, which I know is long term, but compared to what this says is a total tax rolls, it’s going to make a huge difference to public institutions in the city,” McCarty said. “So, I think it’s really a good thing in a very logical place for it to go.”

Commissioner Betseygail Rand observed that the proposed tax revenue from the project was not entirely accurate; the project is expected to receive an 80 percent tax break for the first few years, which will take a significant chunk out of the tax rolls.

“I do feel better about the traffic,” Rand said, “And the information about it lying on these things that are going to be built.”

However, commissioner Rand expressed concerns regarding the proposed $15 an hour salary, noting that San Marcos has a lot of poverty level jobs in San Marcos already.

According to Adriana Cruz, President of the Greater San Marcos Partnership, the Katerra project will have an average salary of $59,000; the median salary will be $16.50 an hour.

The motion to approve the zoning change passed 7-1 with Commissioner Maxfield Baker voting again.

The San Marcos City Council will make the final decision on the rezoning request and annexation of the property on January 15.