The Sealy City Council stepped into unfamiliar territory at its June 18 meeting, learning about a proposed housing development that would be built as a Public Improvement District (PID) as well as entering into preliminary discussions about creating a zoning ordinance for the city.

Representatives for Houston-based LGI Homes brought to the council a 440-lot development on 160 acres where Schmidt, Brast and Rice Field roads intersect behind the Walmart Distribution Center. They are asking the council to consider creating a PID to help fund the roads and infrastructure for the development.

Different than a typical Municipal Utility District (MUD) used to create developments throughout the greater Houston area, a PID makes a special assessment to the property owners within the district to pay for project costs, such as utilities and public roads.

“LGI is looking to develop a master-planned community of approximately 160 acres comprised of 440 lots. Some of the land for this development is located within the City of Sealy and some of it isn’t,” said attorney Ryan LaRue on behalf of LGI. “For this plan to be financially viable they need some help with the infrastructure cost.”

LaRue appeared with Michael Preiss with Pape-Dawson Engineers before a council that seemed excited about news of a housing development but leery of a funding mechanism they were unfamiliar with.

“I’m not ready to approve that yet. I would like to have a workshop with some kind of training on PID so I have a full understanding and can make an informed decision,” said Councilwoman Dee Anne Lerma, who echoed Councilman Larry Koy’s request for a workshop.

Mayor Janice Whitehead said the council would hold a workshop to learn more about PIDs and promised to have it done in a timely manner.

“What the developer is looking for is some assurance from Sealy that they would be willing to move forward with the PID. The feasibility window closes in July on their property,” LaRue said, later noting that July 11 is the deadline.

Showing the council a diagram of the proposed development, Preiss explained that the PID would not cost the city money. The city would only be conveying the assessment from the property owners back to the developer.

“The developer is looking for something that is specific to this property to be able to come in and help them finance the cost of a development of this nature, the infrastructure associated with 400 homes on a tract of land like this is normally $20 million and for them to maintain a price point that is affordable and achievable to potential buyers in the area, this is one of the things they look for in their tool kit to be able to keep those costs down,” Preiss said. “The cost would be borne 100% by the development. It would not be participation from the city externally, so this isn’t something the city’s accepting and floating the bill for this development; the development covers it on its own.”

In addition to needing the PID to proceed, a large portion of the project would need to be voluntarily annexed into the city. Assistant City Manager Warren Escovy, who has been working with the developer on the project, said that about 150 acres of land, currently owned by David Cryan, would need to be annexed.

“We would have to do an annexation simultaneous with the platting and the land plan and everything else,” he said.

Escovy also said that the city has one PID in place, but it was done more than a decade ago before any of the current councilmembers held their seats.

Preiss explained that the PID would not last indefinitely.

“Once those costs have been recouped, the PID ends,” said.

Zoning ordinance

In other action, the council opened discussion on creating a zoning ordinance within its development ordinance. Mayor Janice Whitehead acknowledged that zoning is controversial because property owners do not like being told what they can and cannot do with their land, but said with all the growth that is starting to happen in Sealy that some controls need to be put in place.

“A city not being zoned is uncommon,” observed Councilman Chris Noack.

Noack and Lerma called for a town hall meeting to hear from residents and City Manager Lloyd Merrell suggested conducting a poll. No action was taken regarding the discussion.

More developments

The council also discussed three other developments proposed for the city. They approved the first of two readings for the Sealy Economic Development Corporation to fund infrastructure improvements for the Harvest Moon Apartments. They also approved the land plan for the proposed Dove Landing subdivision and approved the preliminary plat for the first section, which will be located at the southeast corner of FM 3013 and FM 3538.

Acting on the advice of Escovy, the council tabled approval of the master plan for Tranquility Lakes, proposed for the southwest corner of Ward Bend and Stockold Road, and denied the preliminary plat for the development.

In other action:

The council approved Aya Reimer’s request to hold the second annual FM Music Fest at Saddleback Saloon;

Approved an agreement for the signage for the Sealy Chamber of Commerce;

Approved a performance agreement with the Greater Sealy Little League for field improvements;

Elected Sandra Vrablec as mayor pro-tem; and

Discussed the ethics policy.

Heard an objection by Thomas Divin about a condominium project slated to be built next to his property on Schmidt Road.