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Sherman weighs waiting to sell land in growth corridor

Michael Hutchins
Herald Democrat
The city of Sherman is considering if it should sell land to finance public improvements now or wait to sell the land as values are expected to rise.

The Sherman City Council is debating if the city should sell land near oncoming growth or hold onto it with the expectation of increased values. The council discussed this week the possibility of holding onto land along FM 1417 with the expectation that the property may increase in value.

The Bel Air has been one of the largest focuses for the city in recent years. The development at the corner of FM 1417 and U.S. Hwy. 75 could include a mixture of single-family residential, retail and multifamily developments surrounding a public water feature. 

Initially, the city planned to finance these public improvements using revenue generated from the sale of nearby land only after developers started work on the project themselves. During Tuesday's meeting, Hefton proposed a change of course that would have the city issue bonds now at low rates and instead wait to sell the land.

"I did feel it incumbent to say that based on where rates are today, there is an opportunity here and I don't mind pushing on that," City Manager Robby Hefton said. "If what you are saying is you don't want to consider TIRZ No. 7 right now and let's get three months down the road or budget time (we can)."

Hefton said the cost of issuing the bonds would be about $10,000 to $15,000 a year and he speculated that the value of the land could increase more than $1 million dollars as development continues in the area.

The discussion related to the Bel Air Development, which is taking place in Tax Increment Reinvestment Zone No. 7 near the intersection of FM 1417 and U.S. Highway 75, is a part of development agreements currently. The city will assist in financing road infrastructure to the development, which is expected to see more than $500 million in private investment.

The conversation expanded from talks of issuing bonds now for future projects as a way to take advantage of near-historic low borrowing rates. At the end of the meeting, the council agreed to look into issuing debt early, but did not see the same enthusiasm for holding onto the land.

"We believe firmly that the more time that passes the move valuable that land will be," Hefton said. "So the question is do we wait for some period of time ... so that land value goes up so we have greater ability to pay with money we have in hand."

Council member Sandra Melton cautioned that this would be putting the cart before the horse and would be a shift from what the city previously told developers. Rather than waiting for the developers, this would signal that the city was ready to act.

Sherman leaders watch a video in December 2020 promoting the new Bel Air Development in south Sherman. The new $500 million development promises to bring new residences, retail and an upscale water attraction to the FM 1417 corridor.

"This tells me right now we are ready to move forward and we've seen nothing from them," she said.

Council member Shawn Teamann agreed, stating that it might be too early for the city to act.

"To move forward with the project and sit on the land without knowing what we are going to get for it I think could be premature," he said.

Meanwhile, Council member Pam Howeth worried that city leaders could be letting an opportunity slip to ultimately save through their fingers. Still, she noted that the sale of the land, and its final price, have not been set in stone.

"Yes somebody is going to buy the land, but what if it isn't soon," she said.

Council member Josh Stevenson appeared to weight if Sherman acting as a land speculator was in the best interest of the citizens. There are differences between private investment and the decisions you must take when serving as the caretaker of public funds, he said.

"As a city, and as a municipality, where it is the people's money that we are playing with, what's the right thing to do?," he asked urging further discussion. "I don't think we've come to a clear consensus on it and it is definitely not a conversation for tonight, but it needs to be a conversation."

City officials said Sherman's Bel Air Village development will likely move forward without the proposed convention center and hotel.