Home » Front Page Slider » New Apartments Mean New Tax Revenue, Utility Line Upgrades for City
Developer plans to build two new apartment complexes on Lake Road and Sam Houston Avenue to open in fall 2017. If they're like The Forum, they would each contribute $40,000 in annual property tax revenues and about $160,000 in utility use fees.

New Apartments Mean New Tax Revenue, Utility Line Upgrades for City

Council OKs projects to serve $20M new units near SHSU

Updated 7/10/2016

By Walker County News Today Staff

The housing crunch for an increasing population of Sam Houston State University students might further be relieved this time next year with the addition of apartments that the city will support through paying only about a third of a about $1 million project to construct and repair sewer lines and build a new road to serve the area.

One development is a 10-acre, almost $10 million project, to be constructed by Lake Road HBJ Housing, LP, would be located in the 2800 block of Lake Road and would add 120 units of 384 bedrooms. The complex would open in fall 2017.

The other development, to be constructed by SFG Huntsville-1 LLC, is a 2.5-acre vertical apartment complex on the old armory site on Sam Houston Avenue that would add 145 units and 502 bedrooms. This complex would also open in fall 2017.

The Huntsville City Council last Tuesday approved  proposals for the city to enter into development agreements with two apartment developer developers who would each also upgrade existing offsite sewer lines to serve their developments. The city will contribute 30 percent of the cost of improvements in some cases and 100 percent in others, said Community and Economic Development Director Aron Kulhavy, who briefed council on both proposals. The developer will be responsible for all of the work, thus alleviating the city from having to go through a separate bid process.

The city’s portion of the roughly $1 million in new city infrastructure that would be added by these projects would be about $274,000.  Though this cost is unbudgeted, the city would quickly recover its portion of the projects costs through the collection of property taxes, permit fees, and water, sewer and solid waste revenues, Kulhavy said.

City staff told council that the work needed to be done anyway in this section of the city, and by working with developers, the city’s costs would be reduced considerably. Citing studies by Houston-based engineering firm Freese & Nichols, city staff has identified $2 million in improvements to sewer lines that if not completed would prohibit development in the area, south of town through the SHSU Agricultural Center complex and continuing through the Raven Nest Golf Course. About 3,200 feet of sewage collection lines must be enlarged from 8 feet to 10 feet to serve even current needs, city staff said.

City staff estimated that each new apartment complex would generate annual property taxes of about $40,000; $70,000 in water use fee collection; $90,000 in sewage collection fees; and $15,000 in garbage collection fees.  This estimate was based on data the city collected from The Forum, a similar multi-family apartment complex.

Some existing residents and businesses in the city will likely benefit from these agreements. Sewer lines, including some collector lines, in the area just south of the university and along Lake Road would be improved to service these new developments, and these same lines may improve service to adjacent areas including into the upper avenues.

In addition, there will finally be a cut-through street from Lake Road to Montgomery Road, a new street called Windridge Lane, which will cross over to Montgomery Road at about the same point that Cline Street now comes up from the South.

The developers also will benefit from these deals. In fact, the backup information provided to the council members makes it clear that without these agreements, the developers likely would not proceed. Kulhavy made the same point in his briefing to council.

Lake Road HBJ Housing LP, based in Austin, was just formed on June 21. Developers at this Austin address recently formed LPs and LLCs that appear to involve campus properties.

The address of the other developer is SFG Huntsville-1 LLC, whose address is 3414 Peachtree Road NE, Suite 250, Atlanta, Ga. This is the same address, with the same named representative, given by Stonemont Financial Group, who was the disputed late bidder just three months ago on a property two blocks down the street behind the old Wendy’s location. In spite of this developer missing the bid deadline and numerous other inconsistencies, staff was still prepared to award them the bid, but after public protests by businessmen Charles Smither, Tarek Maalouf and George Russell, council went into executive session for legal advice and came back to reject all three bids.

7th Street Rehabilitation Project Bid Comes in 50% Higher Than Estimate

On a first reading Tuesday, council also considered a budget amendment to a $1.3 infrastructure project, proposed construction on 7th Street from Old Madisonville Road to Avenue N, but not including the 400 feet over and adjacent to Town Creek that is part of the separate partially FEMA-funded Town Creek Project. The lower of only two bids on this non-FEMA job was $1.365 million, 50 percent higher than the original consultant Design Engineering Company’s estimate.

As this was a first reading, council took no action. But Ward 4 council member Joe Rodriquez questioned the city about the discrepancy between the engineering firm’s original estimate and the final construction bids.

City Engineer Y.S. “Ram” Ramachandra said that normally the construction bids come within 10–15 percent of the engineer’s estimate, but that he has seen this kind of discrepancy before. He speculated that part of the cause of these discrepancies might be the result of different ways of estimating the cost of relocating the water and sewer lines affected by this project, but that most of it was probably due to market conditions as these construction firms are busy with other projects.

Acknowledging that the question was a good one, City Manager Matt Benoit said he would get back with the engineering firm to see what might have caused the difference and report back.

Rodriquez also questioned if the city had used this engineering firm before. City staff said it had not. Mayor Andy Brauninger asked if the city’s experience with a particular company was considered in future bid evaluations involving that company, and city staff assured him that it was.

The proposed project would include new pavement, curb and gutters, and new water and sewer lines to the street, which has been failing for some time and which has been designated by the city as being in “poor” condition. In the 2013-14 city budget, council included $250,000 for engineering design of the project and the next year added $1.2 million for construction. The city awarded the engineering contract to Binkly and Barfield, Inc. of Houston in 2014. In March 2016, council rejected all of the construction bids from the first round of biddingand reopened the bidding, only to receive similar bids.

The council is being asked to approve a $175,000 budget amendment to cover the cost of construction over the original estimate.

Old Walker County Jail

There were two Items on the executive session agenda, one to receive legal advice on the 1995 interlocal agreement on supplying water to the TDCJ Ellis and Estelle units and the other to receive legal advice on matters related to the old Walker County Jail.

When council reconvened after the executive session, a motion was made, seconded and unanimously approved to direct the city manager and city attorney to draw up and sign a release to Walker County of the city’s 15 percent interest in the Old Walker County Jail.



One comment

  1. Does any one know who’s managing these two developments in Huntsville? Or if it will be student based housing facilities? Thank you!

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