City of Austin adds 136 acres south of Onion Creek

On Thursday, City Council voted to have the city of Austin annex the Cascades Municipal Utility District, 136 acres of undeveloped land south of Onion Creek.

The landowner, Onion Associates Ltd., entered into an agreement with the city in 2014 to create the MUD as part of its plans to develop the land. Original plans envisioned 370 single-family homes and 1,458 condos or townhouses, over 120,000 square feet of commercial and retail space, a community center and 5 acres of parkland.

Council Member Ann Kitchen, whose district borders the MUD, said that it was important for the city to take over land so that it can ensure that future development complies with city flood plain regulations.

“I am concerned about the development that will continue to occur south of this neighborhood,” she said, referencing the flood-ravaged Onion Creek neighborhood.

Council Member Jimmy Flannigan, however, pointed out that the MUD is already in the city’s extraterritorial jurisdiction, meaning that it is already subject to the city’s development regulations, a claim that was confirmed by Planning and Zoning Director Greg Guernsey.

Guernsey noted, however, that it would be Travis County, not the city, that would be responsible for the area’s drainage infrastructure. That was the point that Kitchen hung her hat on, saying that she wanted the city overseeing drainage improvements aimed at reducing flooding.

“I just do not think it is prudent for us to just leave this out there at a time when we can go ahead and annex it,” she said.

Flannigan was concerned about the potential of imposing new service obligations on the city. The city has scrambled over the past year to address fire station shortages nearby, he noted. How soon would it be before the future residents of the new development demand a new fire station?

As long as it remains undeveloped, the land will net the city about $2,500 a year in property tax revenue. If it is developed, that figure will increase dramatically, but so too will the city’s obligations to provide services.

If it wants to annex the land, it’s much easier for the city to do so before there is anybody living on it. A new state law enacted last year requires cities to get approval via referendum from MUD residents prior to annexation. Residents of MUDs are often reluctant to be absorbed by the city, where they often face higher taxes.

From the city’s perspective, however, even if MUD residents aren’t receiving city services, they are benefiting from city infrastructure that they aren’t paying for when they commute into town.

In the case of the Cascades MUD, the property owner was supportive of the annexation. Jeff Howard, an attorney who represents M/I Homes, the developer seeking to build on the property, said that if the property had remained in the city’s ETJ, the developer would have had to contend with both city and county regulations. Being in the city’s full-purpose jurisdiction makes the process simpler, he said.

Council sided with Kitchen, approving the annexation. Only Flannigan voted against, while Council Member Ellen Troxclair abstained and Council Member Alison Alter was absent.

Photo by John Flynn.

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