By Tim Fleischer
Salado Water Supply Corporation rejected two proposals from the developer of Sanctuary Development, a mixed use development of almost 300 acres of property off of Royal St., FM 2268 and I-35.
The board voted on Jan. 28 to turn down both proposals brought to them by Sanctuary earlier in the month.
Sanctuary developers have presented the Village of Salado with petitions for the formation of two Public Improvement Districts with infrastructure and other improvements totaling $60 million to be funded by bonds to be retired by assessments on the properties within the PIDs.
The developers came before SWSC to secure water for 1,547 Living Unit Equivalents (LUEs) of retail water service for the remaining phases of Sanctuary development. SWSC has already committed to providing water service to the 170-180 residential lots in the first phase of the development.
In order to provide water service for the complete development, SWSC would have to upsize and upgrade its infrastructure by some $4.5 million, a cost that would be passed on to the developer benefiting from the improvements.
However, PID funds can only be spent on public infrastructure costs, according to the developer. SWSC is a private corporation, so improvements to the infrastructure outside of the PID boundaries would not be eligible for PID funding.
Salado Village Voice has not received an answer to the question of whether the water infrastructure within the boundaries of the PID would be eligible for bond funds.
Sanctuary developers offered two alternatives to address this issue, both of which were unanimously rejected by the SWSC board of directors.
The first was to fund the improvements through PID funding. To be eligible, however, the water infrastructure must be owned by a public entity, i.e. the Village of Salado, which would hold the improvements for the term of the PID bonds (20-25 years), after which time the infrastructure would become the property of the SWSC. The infrastructure would be leased by the SWSC and during that time, the SWSC would have all rights to the infrastructure without interference from the Village of Salado.
The second alternative would require the de-certification of the Sanctuary property from the SWSC Certificate of Convenience and Necessity. The Village or a newly-created Municipal Utility District would become the retail water service provider to the project.
Under this proposal, SWSC would provide wholesale water service to the public retail service provider (either the Village or a MUD).
The ultimate build-out of Sanctuary will include 515,000 sq. ft. of commercial development, 40,000 sq. ft. of entertainment venues, 355 rooms of lodging, 575 units multiple family housing (multi-story senior living and rental properties), 130 multi-family units (condos and townhomes), 364 single family residential units and 500 covered parking spaces.
In other Sanctuary-related news, Salado aldermen will discuss the Scope of Work for an outside legal firm to conduct to perform a forensic review of the legal agreements between the Village and Sanctuary.