Austin uses new financial technique to spur private development
For five years, developers and city officials have wrestled with how the city could control development along Texas 130 without having to dedicate scarce tax dollars to provide municipal services through full annexation.
The City of Austin last month sold about $40 million in bonds to finance initial construction of new roads, parks, and water and wastewater facilities upfront. The bonds are secured by the value of the raw land — not by the city — and are to be repaid with assessments on property owners in those developments, which carry a special designation: public improvement district, or PID.
Austin, which created the district, regulates development through a limited-purpose annexation.
Developers and city officials hailed the arrangement as a first in Texas, one that could be a blueprint for financially spurring future developments in a lending environment that can be hostile to large projects.
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Bill Davis sent this along. Here we have yet another municipal shortcut to get around what was once considered the normal process of development: annexation and construction of public infrastructure in exchange for the right to collect property taxes from the new city residents. Instead we have this quasi-annexation that leaves the new owners shoveling tax dollars to the city without really being annexed into the city. And Bill points out that there will end up being HOA government to take another cut.
1 comment:
....and experience indicates that although the new "Public Improvement District" is a political subdivision of the state, the citizens will not be allowed to run for what are supposed to be elected positions of the district. Instead, the city and the developer will end up with the controlling interest of the PID board for a very long time. The homeowners are merely involuntary funders - taxation without representation.
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