De-annexation land on 290 allows multifamily project near Belterra

An approval by Dripping Springs city leaders to de-annex seven acres of land near the Belterra development off of west Highway 290 could lead to a future multifamily development.

The decision to approve the de-annexation came after the Dripping Springs City Council realized the land was not going to become a commercial development, which would have allowed for the collection of sales tax. 

The sales tax revenue generated from the development would have been used for infrastructure improvements in the area. But a change of scope by Austin-based developer Endeavor means the property will one day become a multifamily development. 

“We renegotiated that agreement, so when it became clear that the parcel was residential in nature, we knew the city wouldn’t collect sales tax off of it,” said Ginger Faught, Dripping Springs deputy city administrator. “It made sense to take the parcel out of the city limits but still have the development agreement included.” 

Faught said inclusion of the development agreement means that the city can still regulate how the proposed development could look, based off of the city’s ordinances and vision.

From the city’s perspective, this would allow for stringent development standards. For Endeavor, the development agreement regulations are grandfathered despite the de-annexation. 

Originally, the parcel had limited purpose annexation law attached to it, which is primarily done by municipalities to collect sales tax. 

Under limited purpose annexation, residents can vote in local elections but the city cannot collect ad valorem tax and can only collect sales tax. 

Now that the 7.4307-acre parcel of land is de-annexed, future citizens of this development will not have the ability to vote in local elections and will not pay property taxes to the city. The land does fall within Dripping Springs ISD’s boundaries.

“When it turned out that this was not going to be a sales tax generating property, we decided it made sense to de-annex the property,” Faught said. 

Endeavor did not respond for comment as of press time, however, the multifamily development is on the company’s radar.

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