On Nov. 3, Village of Salado voters will elect two new aldermen to two-year terms on the Board of Aldermen. Running for the Board of Aldermen are Paul Cox, Jason Howard and Donald Krause. Michael Coggin, current Mayor Pro Tem, will be elected as Mayor as he faces no opposition in his election.
Early voting continues through Oct. 30. There are several early voting locations in Bell County. On election day, Bell County registered voters may vote at any Bell County polling location, not just their home precinct. Precinct 203 voting will be at the Salado Church of Christ Activity Center, 217 Church St. in Salado.
We posed the following questions to the candidates for this issue:
1. The Village has entered into 2 agreements concerning Economic Development and/or annexation: The Sanctuary and Stagecoach Inn. Were these good agreements for the Village? Why or why not? (300 words)
2. What standards or measures would you advocate for when considering development agreements for annexation, sewer service, sales tax rebates, property tax rebates or over economic development issues when considering annexation of undeveloped property into Salado? How about already developed properties? Would you advocate annexing already developed properties? Why or why not? (300 words)
3. What can the Board of Aldermen do to grow the tax base of Salado, if anything? (200 words)
4. What do you see as future business trends for the Village in the next five to 10 years? (200 words)
Question 1: I believe the Sanctuary Development Agreement is an instrument heavily weighted in favor of the land owners, not the Village. It’s true the owners donated six acres of land and an approved construction permit to build a wastewater treatment plant on the site. This “donation” to the Village was appealing to the Mayor and B of A because it meant a faster start on construction of the sewer system targeted for mostly retail businesses along Royal and Main St. The Sanctuary owners made vague statements that they expected to welcome its first residents and retail businesses in the fall of 2019. The fall of 2019 came and went with no progress on construction. Not any! Groundbreaking did not even happen until February of this year!
The Village is committed to many obligations per this Agreement. The Sanctuary is committed to do nothing! I highly recommend each citizen read the Agreement for themselves. It is on the Village of Salado website, www.saladotx.gov, under Sanctuary Agreement. The Agreement was signed five years ago and little progress has been seen. By the way, ALL five Aldermen voted in favor of the Agreement and against the Village General Counsel’s advice!
Unlike the Sanctuary Agreement, the Stagecoach Development Agreement is what a contract of this nature is supposed to look like. It clearly states the obligations of both the owners and the Village and defines a timeline for performance. The I-35 construction delays, Main Street improvements and COVID have slowed construction at The Stagecoach, however, in the near future The Stagecoach will be an economic anchor once again for our Village!
Question 2: Development Agreements can be an excellent way to attract high quality real estate projects to our Village. The feasibility of any proposed development must go through an analytical process to weigh economic benefits for our Village against liability to the Village in the form of increased maintenance costs and government services needed to service the new development. How much will the added population generate in additional sales tax and property tax? How about school aged children? Schools have to plan for future growth as well as the Village government. After measuring the impacts, both benefits and costs, will the Village at least break even in the end? The answers need to be YES. If there is a shortfall, there are ways to “balance” the equation by requiring the developer to possibly donate land for parks and greenbelts or pay for infrastructure improvements such as water, sewer line or road extensions to the new development, as examples. As in the Stagecoach Agreement, there should be a timeline that requires performance by the developer for completing phases of the project on a schedule agreed to by all parties. The Sanctuary is completely open-ended and requires completion of nothing, ever!
Annexation of any land, already improved or vacant, would have to be considered on a case by case basis using similar fiscal impact analysis tools. It must be a good deal for our Village, period!
Question 3: The tax base for our Village is a mix of residential and commercial real estate development. Property values have increased steadily for the past few years and should continue that trend into the foreseeable future. Village revenue from residential real estate cannot cover our fiscal budget requirements. In fact, new residential developments do not pay their way in the long run. As residential areas age, the cost of repair and replacement of roads, utilities and emergency services increases. That is why commercial development is critical to our Village. A business can bring in revenue from real estate and sales taxes with not much added cost to the Village. We must have new commercial development in our long term comprehensive plan. The BoA can help by staying on a course of planned, controlled commercial growth along the I-35 corridor and the west side of I-35.
As we get past all the construction and shutdowns, sales tax revenue should increase. In fact our revenue the last few months was higher than the same period last year.
I believe we are on track for a successful 2021!
Question 4: Salado is in a unique position at a unique time.
Geographically our location along the I-35 corridor puts us less than one hour away from Austin going south and Waco headed north. Due to COVID, employers have had to modify their workforce models by requiring many employees to work remotely from home. It seems that many companies and employees find that this remote work environment may be a permanent arrangement for many people. So if employees can work remotely, companies don’t have to pay for as much expensive office space. Workers can live almost anywhere – away from crowded cities in smaller towns like Salado, where you have less crime, better schools, lower taxes and NO commute!
The growth has already begun up and down I-35 and the Village needs to be ready. More people means more commercial development. The need for more restaurants, services, office space and retail stores will come with population growth. Families with school aged children place a high priority on their children’s education when deciding where to live and Salado schools are up there with the best!
I see a bright tomorrow for our Village. Growth is coming. Let’s work together for a successful future!
Question 1: The executive summary (page 10) of the master development agreement with the Sanctuary and The Village of Salado, signed November 25th, 2015, states, “Sanctuary is expected to welcome its first resident and retail customer in Fall 2018”. Statements from Mr. Billie Hanks, Jr. in the December 17th, 2015 issue of the Village Voice (volume XXXVIII, Number 35) regarding Phase 1 referenced “a senior center, commercial center and a cultural center.” As of October 2020, the Sanctuary has not produced a single resident or retail customer. The Sanctuary agreement allows for 10-15 years to develop, with no phase completion deadlines, giving developers until 2030 to produce anything that might be deemed beneficial for Salado. The framework for this agreement lacked deadlines for deliverables and should be viewed by Village leaders as an invaluable lesson in contract negotiations.
The Stagecoach agreement with the Village, effective July 7th, 2016, promotes the rich historical tradition of Salado while simultaneously boosting Village revenue, as the Stagecoach once again becomes a sought-after destination. Currently, the Stagecoach boasts a restaurant and updated, ready to occupy rooms. The Stagecoach agreement, a vast improvement over the Sanctuary agreement, includes measurable development phases, with phase two of construction projected for June 30th, 2021. One issue with this agreement pertains to the purchase contract/parking facility lease for property ID 459518. Per BellCad, the Village of Salado (taxpayers) owns this parcel. This land, which houses Sirena, a park, and the adjoining parking lot, was leased to Stagecoach for a mere $1 with the understanding that the public would have access to these facilities. However, after attempting to take my daughter to the park earlier this year only to be denied access to the parking lot via a locked gate, I believe the matter of public access needs to be clearly defined.
Question 2: Public hearings, public hearings, and public hearings along with the framework of cost to benefit to the Village, taking everyone into consideration. The plan should review what services are required for proposed annexation and examine the water supply and wastewater capacity. Such analysis will make it easier for developers and speed development in the area(s). I would support tax rebates for the businesses and land owners that are within current market standards. That said, with Main Street construction coming to an end, Salado’s popularity is enough that significant tax breaks shouldn’t be required. I would encourage, but not force the annexation, of already developed properties as long as the city can provide city services in a short period of time. This is the easiest way to grow the city without straining the existing infrastructure.
Question 3: The Village finances are supported primarily by three different sources: property tax, sales tax and right of way rental fee’s. The best way to increase our tax base is to promote business growth within the village, which would in turn increase sales tax revenue. As residential development continues, this will attract small business growth and commercial real estate growth that will help fuel the village coffers. Promoting necessary residential growth relies, in part, on keeping property taxes reasonable. It is my belief that our residents should not endure another property tax increase, when stimulating residential and business growth would provide ample funds. Exploring the cost to benefit of utilizing left-over sewer bond funding to connect existing commercial properties both in and outside of the village city limits is another consideration for increasing village revenue.
Question 4: As an Alderman, the Village (Public Comment) should set the conditions for our future development requirements and ordinances. Let entrepreneurs do what they do best and Salado will reap the rewards.
Question 1: In the opinion of many Village residents I have talked to, the Sanctuary and Stagecoach agreements did not materially enhance economic development in the Village. These agreements appear to be flawed for three reasons, particularly in the case of the Sanctuary project. First, for both projects, there was no clearly articulated benefit to the Village. Second, for Sanctuary in particular, all the risk for obtaining whatever benefit was anticipated was assumed by the village residents in the form of a sewer development bond issue and giving future tax rebates. Third, there were no project milestones or completion date requirements which would have allowed the Village to push the projects to completion or, more importantly, to cancel them, or receive financial compensation, when milestones were not reached. The most egregious of these flaws, in the opinion of many, is the lack of a clear benefit to village residents in exchange for incurring a major village bond obligation. Further, again particularly with respect to Sanctuary, it can be argued that the loss of control over future commercial and higher density housing development in the area just south of downtown Salado represents a serious threat to the ability of village residents to manage business growth and demographic composition within village borders.
There is, of course, as yet unrealized potential related to these projects. The major potential benefit of the projects for the future is the increase in tax revenue from development of Main Street corridor that takes advantage of the ability of businesses to utilize sewer connections. It is up to future boards of aldermen to create the environment in which development can occur and to foster the kind of development that enhances the Salado experience.
Question 2: Before listing the standards I believe should be applied to any agreement the Village might enter into for economic development or annexation of developments, it is my strong opinion that the Village should act with great caution when negotiating ANY type of benefit-for-development agreement. Salado is geographically central to the area between the Dallas-Fort Worth-Waco metroplex and the Austin-San Antonio metroplex. We also sit astride I-35, a major commercial highway artery. For these reasons, no matter what else we do, certain types of companies will want to locate in nearby areas, if not within the Village limits. I think we can afford to be, and should be, really selective about what we give away.
I would apply three standards to evaluating any proposal.
First, there must be clearly articulated and measurable project benefits. No wishful thinking. If the benefits cannot be clearly stated and measured in an effective way (such as jobs created for village residents or sales tax increases which can be directly attributed to project), then the project is simply speculation.
Second, there must be enforceable project development milestones and benefit realization goals. If the Village has no way to ensure that a project will be completed within a reasonable timeframe (think Sanctuary) and no way to understand the nature of benefits accruing to taxpayers, then, again, the project is simply speculation.
Third, the project must be a good fit with Salado culture and tradition. Salado has a special persona as a village. It is this persona which will allow Salado to continue to be an attractive place for people to live, retire, raise families, and visit. Fit is a purely subjective standard. I feel, however, that projects which are a good fit will stand out, as will those projects which are not.
Question 3: The three largest sources of revenue for the Village, based on the FY2021 budget, are Sales Tax (approximately $600K), Property Tax (approximately $400K), and Hotel Occupancy Tax (approximately $200K) which together make up the greater portion of Village revenue for 2021.
Property taxes can be increased by adding rooftops to the Village. Adding rooftops is a two-edged sword. In the short term, rooftops increase property tax revenue. In the long term, rooftops will cost the Village more than the amount of taxes collected. The Village can add only a limited number of new rooftops, beyond those currently approved or under consideration, because of capacity limitations in the sewage disposal system, unless we build another system.
Sales tax revenues and Hotel tax revenues are the areas I would target first, as they are related. The business of Salado is selling goods and food to people who come here for the Salado experience (eclectic shops, festivals, parades, and events). By carefully tailoring and expanding the Salado experience, the number of events produced (through effective use of Hotel tax revenues), and the nature and quality of shops and restaurants, especially in the Main Street corridor, I believe Salado can markedly increase both Sales tax revenue and Hotel tax revenue.
Question 4: As I stated in the comment on question 2, Salado is geographically central to the area between the Dallas-Fort Worth-Waco metroplex and the Austin-San Antonio metroplex. We also sit astride I-35, a major commercial highway artery. This means residential development of the area around Salado will occur whether The Village encourages it or not. If we are to really benefit from the increases in population in the surrounding areas, Salado needs to effectively develop its shopping, restaurant, hospitality, and event capabilities.
It seems to me the Village has already lost control of much of the commercial and multi-family development within Village borders thru current and past agreements with developers. For instance, the Village cannot control what Sanctuary is doing with its properties. More recently, we no longer control some of the commercial aspects of the development along West Village Road.
The only areas still in control of the Village are the Main Street corridor and the Historic District. I believe residents must come together to develop a vision for how these areas should develop. If we do this, we can direct funding at ideas and projects which will actually benefit the Village now and into the future.