Proposed pipeline puts Kyle building plans in limbo

Plans for possible development in areas of west Kyle are in limbo as officials fear a proposed underground pipeline could prevent some of it from happening.   

As a result, Kyle city leaders worry that millions in future tax revenue could be lost, stemming from the inability to construct near Kinder Morgan’s Permian Highway Pipeline (PHP).

Those issues came to the forefront May 21 as Kyle City Manager Scott Sellers presented the impact of Kinder Morgan’s Permian Highway Pipeline to city leaders. The PHP is a 420-mile, 42-inch pipeline that is proposed to go from far west Texas to the Houston area, cutting through the Texas Hill Country.

One primary area that could be impacted is the proposed Waterridge Subdivision, an 800-acre development located on Old Stagecoach Road. Kyle estimates the development, which is intended to house a possible 100-acre resort with a hotel and a possible conference center, could produce millions in taxes for the city.

Kyle officials plan for connecting roads to be built from the proposed FM 150 realignment to parts of Waterridge. Doing so could make it more viable for potential builders.

The FM 150 realignment project, which involves Hays County and the Texas Department of Transportation (TxDOT), would consist of building a new road from Yarrington Road at Interstate 35 to Arroyo Ranch. Hays County Pct. 2 Commissioner Mark Jones said the project is still in the discussion stage.

However, Sellers said those plans might not be implemented due to safety regulations Kyle plans to impose relating to development around pipelines.

Under a new Kyle ordinance, which was approved by first reading earlier this month, residential developments cannot be “within 200 feet” of a pipeline. A second reading is expected to be brought before council in June. 

Sellers said it could have a “major financial impact” in Kyle.

Sellers said it’s unknown at this time how many future homes could be impacted by the PHP as platting for proposed subdivisions near the project have not been submitted. Developers are currently waiting to see what happens with the PHP, Sellers said.

Jones said the proposed route of Kinder Morgan’s pipeline, which could intersect with the proposed FM 150 at five separate points, isn’t expected to affect construction of the roadway.

But city officials worry the pipeline could impact not only residential developments coming to town, but also the route of the realignment as well. Sellers said Kyle’s proposed ordinance could restrict construction of the bypass near the pipeline in town.

Any possible redesign of the FM 150 realignment route could “negatively impact” Kyle’s plans to bring a destination resort to Waterridge.

“I want city council and citizens to understand that the pipeline conflicts with our development plans and the bypass alignment,” said Sellers. 

Sellers said he is not against the pipeline itself, but rather the pipeline’s intended placement within Kyle.

“We’re just trying to gain oversight on already planned development,” said Kyle Communication Specialist Kim Hilsenbeck.

It could also impact recent moves made by Kyle city leaders in an attempt to bring a convention center to town.

Kyle’s City Council recently passed a resolution supporting legislation that would use state Hotel Occupancy Tax dollars to possibly incentivize a resort or convention center in the city. It is unknown at this time if that legislation made its way through the Legislature prior to Sine Die Monday.

In addition to supporting the HOT legislation, Kyle in April joined in litigation against Kinder Morgan and the Texas Railroad Commission in an effort to create more oversight on the pipeline routing process.

A hearing on a motion by Kinder Morgan to dismiss the lawsuit began Tuesday and is expected to continue this week.

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