Sherman eyes PID for Bel Air parks

Michael Hutchins
Herald Democrat
The city of Sherman will contract with MuniCap Inc. to create a Public Improvement District, which will help finance public amenities in the proposed Bel Air development along FM 1417.

As Sherman continues to experience a boom in growth, the city has come up with a new way to help finance public improvements and future amenities.

At Monday's meeting, the City Council unanimously approved a consulting agreement with MuniCap Inc. to draft a new Public Improvement District along the FM 1417 corridor. This district would put a fee on new residential units in the district that would be used to finance nearby amenities.

"This is absolutely uncharted territory for the city of Sherman," Sherman Community and Support Services Manager Nate Strauch said. "Public improvement districts weren't even on our radar two years ago and now we are ready to take the first steps into creating our first district."

The district would encompass the proposed Bel Air development, located on more than 250 acres near the Schulman's Movie Bowl Grille on the corner of the FM 1417 and U.S. Highway 75 intersection. In recent years, developers have planned to develop the area into a mixed-use district complete with retail and a mixture of residential uses.

These plans have also included significant public amenities, including park and green space, walking trails and a proposed water feature that city officials have described as "the lagoon."

The creation of the PID represents the latest effort by the city to find alternative ways to finance public improvements. Earlier this year, the city agreed to put in place impact fees that would allow future development to pay for a percentage of public infrastructure costs based on projected usage and impact.

In other areas of Sherman, the city has also used Tax Increment Reinvestment Zones to help dedicate a portion of future property tax revenues to infrastructure improvements.

"A public improvement district is on the other side of the equation," Strauch said. "So it isn't on the property tax, it is an additional fee levied on houses in the community, and only in that community. That doesn't pay for roads and infrastructure like that, but pays for things more quality of life oriented."

Strauch stressed that this would apply strictly to new homes out of Bel Air and not other parts of the city or existing homes. Likewise, the amenities would be publicly accessible and not restricted to just residents of Bel Air. 

"It is something you'd be aware of up front and then you'd decide how you want to pay it," he said.

While new to the city of Sherman, Strauch said the use of PIDs has increased in recent years in Texas as many developers have expanded the scope of high-end developments to include more quality of life improvements. 

"You want to be able to include these amenities without footing the cost up front," he said. "One of the ways to do that is to pass along that cost to residents who will most definitely live near them."

Many details, including the cost of the fee and how it passes between current and future homeowners will likely come to fruition as the ordinance is drafted, Strauch said. Likewise, the scope of these improvements will also be evaluated, but Strauch estimated the development itself could be in the $10s of millions.

Monday's action represents the latest in a series of negotiations between the city and private developers on the development.  Earlier this year, city officials said they hoped to have some form of financing agreement in place this fall so the project can move forward.

"There have been many different financing options that have been batted around throughout the negotiation process in what is contemplated to be the largest development in the city of Sherman's history," Strauch said.