Hunt, PSB and the Northeast community, mastered
by Sito Negron
Posted on July 8, 2008
The terms of the Northeast El Paso land sale have shifted slightly in favor of the deal. One of the ways in which the deal is different from what initially was proposed will be discussed tonight at a public forum in Northeast El Paso.
Hunt Communities LLC and the El Paso Public Service Board are asking for an amendment to the master plan governing growth for almost 5,000 acres, for which Hunt has agreed to pay $131 million.
Actually, the PSB is technically asking for the changes, because it still owns the land until the sale closes Sept. 29. The public meeting tonight, 6-8 p.m. at Nolan Richardson Middle School, is the first step.
The City Plan Commission will have to review the plan, possibly at its July 17 meeting, after which it would be introduced at City Council. It could be approved by Council as early as July 29.
And what are the changes? Briefly, it would increase the number of residential units from 15,000 to 20,000, and the density from four units to 5.5 per acre. It also would increase the number of "mixed use" acres from 260 to 400. At first glance, it would appear to maintain the amount of parks, open space, and trails.
Justin Chapman, president of Hunt Communities, LLC, issued a prepared statement regarding the land use: "In accordance with the development agreement and bid documents, which require it, the PSB has applied for an amended land study on the Northeast Master Planned Community. The PSB and Hunt have worked together to create an Amended Land Study that conforms to the open space, park dedication, and other smart growth requirements outlined in the bid documents. This is a required next step in the planning and engineering process and a very meaningful step forward in making the Northeast Master Planned Community a reality."
Here are some background stories, arranged chronologically and in a bulleted list. Following the list are some other observations about the contract for the land sale.
-- High Bidder for 5,000 Northeast Acres: Hunt Communities, Aug. 3, 2007: "The high bidder for almost 5,000 acres of Public Service Board land in Northeast El Paso is Hunt Communities. The successful bid comes after an unprecedented process that will provide almost a generation’s worth of land north of Fort Bliss to a single purchaser."
-- Hunt Halts Land Sale; $131 Million Deal is Off, March 6, 2008: "Hunt issued a statement early Thursday, along with a letter notifying the PSB of its decision to withdraw its bid, which at more than $27,000 per acre was well ahead of the rival bidder. Reaction from the city was swift. Beyond the finger-pointing are questions of development quality, quantity, and need."
-- Starting Gun of a Northeast Land Rush, March 7, 2008: "A story from the archives, this one dated Nov. 27, 2006, sheds some light on the context of Northeast land development that has been highlighted by the recent withdrawal by Hunt Communities of its $131 million bid for PSB land. Of particular interest are comments regarding subdivision codes. Enjoy!"
-- "Smart Code" and Other Changes to Development Rules Approved; Next Step, Council, March 14, 2008: "The City Council wants pedestrian- and mass transit-friendly neighborhoods. But developers need rules that allow such neighborhoods, and the city is moving -- now quickly -- to adopt those rules."
-- $131 Million Hunt-PSB Land Sale Back On, May 6, 2008: "Council members suggested that Hunt was backing out because it had bid too much for the land, especially in light of the looming national recession driven by the crisis in home financing. But after the hot words, negotiations quietly resumed between the city and Hunt."
As for the contract … initially, the buzz in business and political circles was that Hunt had overpaid for the property, and was seeking a way out of the deal, or a change to make it work financially. The national housing market slump framed the discussion, creating a context different from when the deal first began taking two years earlier.
As the discussion at City Council and with the PSB focused on land use issues -- how much open space, for example -- one little item that really played a role in how the money would work escaped most notice.
The phasing, or the schedule through which the land would be paid for and developed, initially had Hunt paying infrastructure costs up front for more than it immediately would be developing. In other words, Hunt would be locked into developing a given amount of land, regardless of market conditions, because of the infrastructure money required up front.
That has been changed a little, so the up-front infrastructure cost to Hunt is less. To help make that up, Hunt is to be charged an additional 7 percent carrying cost on land it does not buy on schedule.
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