Bexar County will reimburse a housing developer millions of dollars more than originally agreed upon for infrastructure improvements in a Southside neighborhood.
County commissioners on Tuesday followed the lead of the San Antonio City Council in voting to ramp up its reimbursements for the Mission del Lago development after Southside ISD pulled out of a 25-year-old interlocal agreement with developers.
The agreement, amended multiple times since its 1999 start date with a former developer, calls for SouthStar Communities to be reimbursed by several taxing entities up to $65.3 million for the cost of building out the roads, utilities and other improvements in the neighborhood.
Situated off Highway 281 south of Loop 410 near Mitchell Lake, the Mission del Lago development features 2,600 single-family homes and apartment complexes plus a pool and clubhouse, tennis courts, a playground and school.
The neighborhood has direct access to the Medina River trailhead and is close to Texas A&M University-San Antonio and the Toyota Texas plant.
SouthStar took over the project in 2008, turning the Mission del Lago Tax Increment Reinvestment Zone (TIRZ) into one of the best TIRZ stories in the county, said Blakely Fernandez, an attorney representing SouthStar, at a February meeting of the commissioner’s court.
“Because that housing in Mission del Lago has been successful, you’re now seeing [other] developers have … the ability to come in and build homes in that area without government support,” she said. “So this is the way a TIRZ is supposed to work.”
To make up for the deficit in funding created when the school district ended its participation in 2023, city officials last month approved maintaining its participation rate at 100% of the tax rate ($0.541590 in tax year 2023) through 2031 and increasing the maximum reimbursement amount to $40 million — a $19 million jump.
The district’s maximum obligation under the agreement was just over $74 million.
With recent approval by commissioners, the county will increase its participation rate in the Mission del Lago TIRZ agreement from 75% to 100% of the operations and maintenance portion of the tax rate ($0.236067 in tax year 2023) through 2031.
It will also step up by $6 million its maximum payout amount, bringing the county’s reimbursement to a total of almost $17 million.
The agreement reimburses the developer for the cost of buidling roads, drainage and other public utilities that serve the area.
“This is mainly for the completion of the subdivision,” said Thad Rutherford, president and CEO of SouthStar. “The project’s been going on for 20-plus years and this is kind of the last of three phases.”
Southside ISD notified city officials in October that it had “experienced a decrease in the amount of State and Local funds available to the District due to a change of law(s) applicable to public school districts,” according to county documents stating that the district’s budget had been cut from $43 million to $36 million during 2022-23.
Southside’s withdrawal from the TIRZ agreement is pending a settlement, release and termination agreement, according to the amended contract.
“The reason that I am supporting this is because I’m looking out for the best interest of the children, the students of Southside ISD,” said Commissioner Rebeca Clay-Flores, who represents Precinct 1, where Mission del Lago is located. “We also need to make sure we protect future development housing opportunities in the southern sector of our county.”
On Tuesday, only Commissioner Grant Moody (Pct. 3) voted against the amended agreement.
When commissioners first discussed the proposed amendment in February, Moody said he did not feel comfortable supporting it despite Southside ISD’s budget issues.
“It seems like another large commitment in terms of tax revenue that we’re going to forgo and create more pressure and more strain on our general fund budget going forward,” Moody said.
SouthStar is also developing the 600-acre VIDA neighborhood adjacent Texas A&M-San Antonio.
