Council, staff weigh risks of proposed Everly PID as developer seeks flexibility on bond rules

Lockhart planning staff, the developer and council spent an extended portion of the March 11 meeting discussing the proposed Everly development agreement and a companion public improvement district (PID) for roughly 160 acres in the city’s extraterritorial jurisdiction west of State Highway 130.

Planning Director David Fowler described the project as a three‑phase, single‑family residential neighborhood of about 535 lots that would be annexed into the city and served by two proposed entrances on Borchardt Loop. The plan proposes 17 acres of public parkland (including restroom and trail improvements) but staff said more than half of that dedication lies in mapped floodplain and therefore the developer proposed to pay a 1.74‑acre fee in lieu for the portion the city cannot accept as usable parkland.

Fowler told council the project includes 14 acres of private, HOA‑maintained open space and an amenity center. Utilities would extend to the site with water tie‑ins and a forced main for wastewater; the developer would dedicate the completed utility extensions to the city. A planned connection to Maple Street was not included because the southern property and Maple Street lie in a FEMA floodplain; the applicant said connecting there would be a public‑safety and engineering issue unless county improvements were made.

The central policy issue discussed at length was the city’s PID value‑to‑lien (VTL) policy, which requires an appraised improved value of at least three times the proposed bond lien at each bond issuance. Fowler and staff said the Everly PID model as presented showed initial VTL figures of about 2.18 to 2.25 — below the city’s 3:1 threshold — and that the developer’s proposed “holdback” remedy would not, in staff’s view, satisfy the city policy and could set an unwanted precedent. Fowler read advice from bond professionals saying that waiving the 3:1 requirement creates financial risk for PID homeowners and the city; he said cities that hold firm to the policy typically see developers adjust models to meet the standard.

The developer, represented by Tara Hatley of Masonwood Development, described the project’s lot mix (a majority of 50‑foot lots with some 60‑ and 65‑foot lots) and the project’s marketing plan; Hatley said builders under discussion include Chesmar Homes and David Weekley Homes and described mid‑market price points. Vanessa Stowe, the developer’s PID consultant, detailed how a holdback approach would work in practice: issuing a larger gross bond amount but withholding a portion of net bond proceeds until additional home construction is complete so the required VTL is achieved over time. She advised council to confirm details with the city’s PID administrator, bond counsel and financial advisor and said the holdback method is used in some jurisdictions.

Staff cautioned that the holdback approach would likely require Texas attorney general preclearance and that approving a deviation from the city’s VTL policy would create precedent. Fowler summarized staff conclusions: the project provides some desirable elements (on‑site parks and HOA amenities) but lacks commercial uses and some binding, higher‑standard design commitments in the current draft development agreement. He recommended that any promised enhancements — architecture, landscaping, lighting and other standards — be codified in the development agreement rather than left to nonbinding materials.

Council members expressed particular concern about access and emergency egress: the plan currently proposes only two connections to Borchardt Loop separated by roughly 600 feet, which several members said was a potential safety bottleneck for 535 units. County officials told the applicant that broader Borchardt Loop improvements were funded in county bonds and may extend across Orchard/Orchard Loop, which the developer said could change the access picture if the county completes those upgrades. Council did not take formal action on the item; staff and the developer were directed to continue refining the development agreement, provide binding language for enhanced standards and seek additional information about roadway and financing options.