Live Oak supports new mixed-rate apartment complex coming to city

Live Oak City Council gave its support for a new mixed-rate apartment complex coming to the city, while opening negotiations for a new contract with its waste-recycling vendor.

Waste Management’s five-year contract with the city is set to expire at the end of March and administration brought the issue to City Council during its Jan. 25 meeting.

The city is about to enter into renegotiation with Waste Management (WM) for a contract for its waste hauling service after a 3-1 council vote authorized the city manager to begin negotiating a new contract.

Mark Wagster, Director of Public Works, said Waste Management is moving to automated slide loader trucks, similar to service in San Antonio, Converse and Universal City among others. The service requires customers to place 96-gallon trash or recycle containers at curbside on pickup dates, eliminating the bags of trash that customers have regularly left for WM’s former hand-pickup service.

Among the perks with the new service is expanded bulk trash collection once per month, Wagster said, instead of the twice-per-year service Live Oak currently offers.

Councilmen Ed Cimics said he is not a fan of the side-loading trucks and does not favor the push toward citywide uniformed trash containers. Cimics said he personally prefers using a plastic garbage bag, as he travels and can leave the bag at the curb and not have to worry about leaving a trash container in the street during his time away.

He said he has no issues with the job WM has done. “But I think we’ve been in bed with them too long,” Cimics said, adding, “I think there are other companies out there that we ought to go out … and get some bids.”

Cimics made a motion to give Waste Management a contractual termination notice 30 days prior to the expiration of this contract. “If we want to go out for bids, I think we need to give them notice so we can get bids from other companies,” he added.

Councilman Aaron Dahl agreed with Cimics’ assessment of reaching out for bids. But Dahl asked if the city could go out for bid without severing the contract with Waste Management.

Wagster said WM expressed the need to rework the agreement itself, not simply renew the service already being provided.

Councilwoman Erin Perez asked why the city would want to go through a bidding process when it will be negotiating the service anyway, as informed by Waste Management.

“We know we have a great service, our residents are happy, and we have more opportunity for enhancement,” Perez said. “We can just ask them to negotiate and bring that back to us. And if we’re still not happy, we can throw that … out and say, ‘No, we’re ready for bids.’”

Cimics’ motion to terminate the contract and open bidding failed to draw a second. A motion to authorize the city manager to enter into negotiations for trash services with Waste Management passed 3-1, with Cimics against. Councilman Bob Tullgren joined Dahl and Perez in favor of the WM contract negotiation.

Earlier in the meeting, representatives from The Palladium Group asked the council to consider signing a resolution that Palladium will submit to the state for a 9 percent tax credit for apartments to be built along Toepperwein Road, west of Interstate 35.

Kim Parker of The Palladium Group told council of Palladium’s background and goal of bringing affordable apartment living to the city. The plan is to purchase land along Toepperwein Road west of Interstate 35, between residences in the area and the San Antonio Auto Auction facility, which will be behind the complex.

“This represents a $33 million investment in the city of Live Oak,” Parker said of the apartment building, a three-story structure of 51 one-bedroom, 68 two-bedroom and 22 three-bedroom units. The site will be fenced, gated and include amenities typical to apartment living, such as a fitness center, pool, children’s playroom, walking trails, dog park and picnic area.

Palladium, she said, is a global real estate company based in Milan, Italy with U.S. headquarters in Dallas. “They develop multi-family assets across the spectrum including luxury high-rises, mid-rises, garden-style, independent senior living and workforce housing,” she said. “They manage all of their assets themselves. The owners decided they did not want to hire a third-party management company, because nobody manages an asset better than the owner does.”

The firm has a long history with its employees “and they’ve got one of the highest resident retention rates in the industry because of that,” she added.

Parker said the hotel will form a good buffer between residential homes in the area and the San Antonio Auto Auction which operates just off Toepperwein Road to the north of the site.

“What a great place to have a beautiful building that can shield the residential on the other side from the industry behind it,” she said. “It’s a good buffer between the residents and the industry. It’s close to jobs, it’s close to the hospital, we can actually see the IKEA from the site, great visibility and access.

Palladium does not yet own the site, needing to align all the approvals it needs to participate in the state’s 9 percent competitive Housing Tax Credit Program.

Avis Chaisson, director of real estate development with Palladium USA International in Dallas, outlined the firm’s site plan and pricing.

The firm seeks to receive the 9 percent housing tax credit program offered through the Texas Department of Housing and Community Affairs.

The primary purpose of the tax-credit financing “is to provide housing that is affordable for the workforce of Texas,” according to Palladium information shared with the council.

The state’s Housing Tax Credit Program is targeted to people earning 30-60 percent of the area median income (AMI), which Chaisson said is about $74,500 in Bexar County. That would put the 60 percent AMI rate at just about $45,000 for a family of four.

“We have some units that will be at a below-market rate, offered for different income levels, and then some true market rate units,” Chaisson said. The market-rate breakdown showed 82 units (58 percent) at the below-market rate, and 59 units at a market-rate level, all spread across the 1, 2 and 3-bedroom offerings.

The below-market rent rates would vary, from $417 to $834 for one-bedroom, to $500 to $1,000 for two-bedroom, and $578 to $1,156 for three-bedroom units. The full-market rate was expected to be $1,206 for one-bed, $1,500 for two-bed and $1,731 for three-bed units.

Palladium, she said, was asking the city for support for its application to the state so it could move forward with its development process.

Interim Live Oak City Manager Michael Hornes said the city had been through this process before, with The Arbor at Centerbrook Apartments on Oak Meadows in Live Oak. He said permitting fees for a construction project of this size “will be close to six figures.”

Councilman Ed Cimics asked if the apartments are Section 8 housing. Hornes said no, the tax credit program represents subsidized, but not Section 8, housing.

“It looks like an attractive complex, so it should be real interesting,” Cimics said.

“I always support additional housing opportunities in the city of Live Oak,” Councilman Aaron Dahl said. “I think this would be a good use of that property. Toepperwein is a decent road, sufficient to handle the multi-family traffic.”

Council unanimously approved Palladium’s request for support of the firm’s effort to apply for and receive the housing tax credit program.

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