2024-014 Legends Agreement ISR April 5,2024 Report No. 2024-014
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Request to modify the Legends Ranch Developers Agreement to increase allowed multifamily
units.
EXECUTIVE SUMMARY:
The City was approached by the representatives for the Legends Ranch Municipal Utility District
(MUD)to increase the number of units of multifamily allowed to be built on the site. In exchange
the representatives offered to annex a portion of the site into the City limits and pay additional
related fees. This agreement would net the City approximately $15 million in additional revenue
from taxes and other sources, and the development would be consistent with density of typical
multifamily developments throughout the City of Denton. This item is tentatively scheduled for
City Council consideration at the April 16, 2024 City Council meeting with staff recommending
approval.
BACKGROUND:
Article III, Section 52 and Article XVI, Section 59, of the Texas Constitution authorizes the
creation of special districts that function as independent, limited governments. A MUD is another
type of special district and Chapter 54 of the Texas Water Code provides specific regulations for
the creation of a MUD.
The purpose of a MUD is to provide a developer an alternate way to finance infrastructure, such
as water, sewer, drainage, and road facilities through the issuance of refunding bonds. Managed
by a Board elected by property owners within the MUD, a MUD may issue bonds to reimburse a
developer for authorized improvements. The MUD will utilize property tax revenues and user fees
to repay the debt. As the MUD pays off its debt, more of its tax revenue can be directed to other
services.
A MUD can be created by either:
1. the Texas Legislature following adoption of a district creation bill; or
2. the Texas Commission on Environmental Quality(TCEQ)following a petition and consent
process described in the Texas Water Code.
A MUD established by TCEQ is initiated by a property owner submitting a Petition for Consent
to Creation of a Political Subdivision in the Extraterritorial Jurisdiction.These MUDs are governed
by both Section 54.016 of the Texas Water Code and Section 42.042 of the Texas Local
Government Code. For property located in the City's ETJ to be included in a MUD, a request for
City Council consent is required prior to creation as part of the TCEQ process.
In September of 2019 staff met with the petitioner regarding their development proposal and
intention of seeking a MUD. On February 14, 2020, the City received a Petition for Consent from
Legends Ranch Development, LLC to create a 496.136 acre MUD in the City's ETJ Division I
through the TCEQ process identified above. The property lies within the City's Certificate of
April 5,2024 Report No. 2024-014
Convenience and Necessity (CCN) area for both water and wastewater. The Petition was
considered by Council on May 12, 2020 and consent was not granted. Following the Petitioners
inability to obtain Consent from the City, staff and the representatives of Legends Ranch MUD
met to develop terms which would be acceptable for the City to consider consenting to the Petition.
The outcomes of these terms were incorporated into the approved Development Agreement
adopted by City Council on June 28, 2022 provided as Attachment 1.
In September 2023, representatives for Legends Ranch reached out to City Staff with a request to
increase the 320 maximum allowable multifamily units approved in the original Developers
Agreement to a total of 625 units.
DISCUSSION:
Regarding the request, staff worked with the Developer on terms favorable for both parties and the
developer has agreed to the following:
• Annexing a portion of the multifamily site into the corporate limits of the City of Denton; and
• Paying Roadway Impact Fees, Park Development, and Park Land Dedication fees in addition
to the other fees agreed to in the original agreement.
In addition to these items,the City would receive ad valorem taxes from the annexed portion which
would not otherwise be collected if the development were to remain solely in the ETJ as well as
increased permitting fee revenue due to the increased size of the multifamily complex.
The table below describes the financial benefit to the City for the approval of the request. The
increase of 305 units to the multifamily site will result in $129,611,103 of property value and
$15,484,944 in revenue to the City over the next 30 years.
Year 1 Total Year 5 Total Year 10 Total Year 30 Total
Est. Property Value $ 55,000,000 $ 61,902,985 $ 71,762,525 $ 129,611,103
Units Increase 305 305 305 305
Ad Valorem Taxes $ 308,375 $ 1,637,205 $ 3,535,175 $ 14,671,074
Add Permit Fees $ 270,962 $ - $ - $ -
Roadway Impact $ 403,263 $ - $ - $ -
Parks Development $ 60,775 $ - $ - $ -
Park Dedication $ 78,870 $ - $ - $ -
Grand Total $ 1,122,245 $ 2,451,075 $ 4,349,045 $ 15,484,944
Approval of the request would result in increased density for the development from 10 units per
acre to approximately 20 units per acre. However, in researching recently constructed multifamily
units throughout the City over the last two years, City staff found multifamily units are being
constructed at a density of 31 units per acres, so this development would still be less intensive than
other similar developments.Additionally,the site is adjacent to US380 where the increased density
is appropriate for this type of multifamily.
April 5,2024 Report No. 2024-014
The single-family portion of the Legends MUD has already started the development process with
the City of Denton are preparing to start construction in Fall 2024. This request is related to the
multifamily portion of the site anticipated to begin construction in Winter 2024 with construction
to be completed in late 2026. If this request is approved, the annexation process would happening
following the issuance of Certificates of Occupancy for the multifamily construction.
CONCLUSION:
This item is tentatively scheduled for the April 16, 2024 City Council meeting as a request to
amend the Developer Agreement with the Legends Ranch MUD to increase the maximum
multifamily units. Staff is recommending approval of this request because of the increased revenue
for the City and the request being consistent in density with similar developments throughout the
City of Denton.
PRIOR PRESENTATIONS:
City Council approved the Developers Agreement on June 28, 2022. The video can be found
online.
ATTACHMENT:
1. Approved Developers Agreement
2. Modified Conceptual Plan
STAFF CONTACT:
Charlie Rosendahl
Business Services Manager
Charlie.Rosendahl@cityofdenton.com
(940) 349-8452
REQUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 1 hours
PARTICIPATING DEPARTMENTS: Development Services and Legal