Persimmon Project Greenlit: MileStone and Buda Finalize Agreement for 775-Acre Development South of Austin

Persimmon Project Greenlit: MileStone and Buda Finalize Agreement for 775-Acre Development South of Austin

Source: Austin Business Journal
Justin Sayers


The developers of the 775-acre Persimmon project and the city of Buda have resolved the final issues regarding the development plan, reviving the long-debated initiative to bring thousands of homes to the city located south of Austin.

On June 18, the Buda City Council approved a development agreement with Austin-based MileStone Community Builders LLC to annex 762 acres from the city's extraterritorial jurisdiction into Buda. This decision concludes years of debate over the project. Additionally, Buda and Hays County officials agreed on June 18 to participate in a tax increment reinvestment zone (TIRZ) to fund the necessary public improvements for the Persimmon project.

For years, MileStone and the city of Buda struggled to finalize a deal, disagreeing on parameters like lot sizes and the number of homes. MileStone even leveraged a new state law to withdraw the land from the city's control and develop it independently with its utilities. Before the project can commence, zoning must be established on the site to facilitate the issuance of bonds related to the TIRZ and a public improvement district. However, the recent agreement marks a significant step in advancing the project—a process reflective of the region's growing pains.

Buda, situated about 15 miles south of downtown Austin, has a population of around 16,000 according to the U.S. Census. The development agreement includes several concessions from both parties. It caps the number of homes at 2,300 (down from 2,800), limits to 400 condominium units, prohibits for-rent multifamily lots, ensures a mix of lot sizes, allocates land for Hays Independent School District and emergency services, increases public park space, and includes an aquifer storage and recovery well site.

The agreement also outlines transportation improvements, such as adhering to standards for connections to Farm to Market Road 1626, reserving land for a future expansion of State Highway 45, and committing to city tree mitigation standards. Furthermore, it specifies that at least 25% of homes will have 55-foot lot sizes, 20% will have 65-foot lot sizes, and 5% will have 80-foot lot sizes. A minimum of 40 acres will be designated for non-residential uses, including commercial and public space, with about four acres for a fire department or emergency management services site and 15 acres for a school site. If Hays ISD does not need the school site within five years, it could be used for additional residential development.

"We appreciate everyone's efforts to lay the groundwork for what will be an iconic community with incredible trees, open spaces, parks, and much-needed housing for the Austin area," said MileStone CEO Garrett Martin. "Most importantly, Persimmon will provide an unprecedented transportation solution for the region, made possible through the collaboration of Hays County, the city of Buda, and Persimmon."

The developers aim to begin phase one of the project, including transportation improvements, this year and phase two, which involves denser development, in 2026. The goal is to complete the project by 2035.

Delays in the project's approval were largely due to its location, which spans the extraterritorial jurisdictions of Buda and Austin. Developers considered several options to proceed but focused on two: collaborating with Buda to provide utilities and services and adhering to Buda's development standards, or independently developing the project with the help of a municipal utility district—a potentially costly and lengthy process.

Both parties favored the former option but had leverage in negotiations. The project is primarily outside Buda's utility coverage area, meaning the city isn't legally required to provide water for most of the site. MileStone previously filed a petition with the Texas Commission on Environmental Quality to develop its own independent water and wastewater infrastructure and successfully petitioned to exit Buda's ETJ, allowing development under the guidelines of unincorporated Hays County or Austin's ETJ.

In October, there was optimism about a deal after both parties signed a non-binding term sheet. A development agreement was first presented to the Buda City Council in December but was tabled due to concerns about changes made by the developer. On February 6, the Council approved the measure with its changes, particularly regarding funding reimbursement methods for site infrastructure. These remaining issues were resolved during the June 18 meetings.

Source: Austin Business Journal. Retrieved from https://www.bizjournals.com/austin/news/2024/06/19/persimmon-milestone-buda-development-agreement.html

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