Feature Illustration (above): Interior view of the Katerra Inc. factory in Phoenix, Arizona. Courtesy: Katerra Inc.
by Adolfo Pesquera
San Marcos (Hays County) — Katerra Inc., a manufacturer of building components and materials, will be constructing a 600,000-square-foot fully automated factory south of San Marcos Regional Airport.
In other business, City Council gave staff direction on how to proceed with a $14 million flood control project along the Blanco River.
Katerra, based in Menlo Park, California, reached agreements in October with the city of San Marcos and Caldwell County on tax breaks that are conditioned on several requirements. Caldwell County had to be involved because the land is in that county, although it is within San Marcos’ city limits.
Adriana Cruz, president, Greater San Marcos Partnership. Courtesy: City of San Marcos.
According to the articles of a Chapter 380 economic development incentive agreement, Katerra is committed to invest at least $109 million in real and personal property improvements. Construction is to begin on or before June 1, 2019 and be completed on or before March 31, 2020.
Katerra is to begin operations by March 31, 2020 and employ at least 542 workers. Worker salaries are to be at least $15 an hour for the duration of the 10-year incentive package. Grant payments from the agreement may be submitted to the city beginning 2022, a year after completion of real property improvements get recorded on the tax roll.
While the agreement calls for a 600,000-square-foot factory, the site plan shows a reserve site on the 66.7-acre tract for 201,000 square feet of “future expansion.” Other features of the site plan include a railroad spur, a parking lot for 451 vehicles, and a 6-acre detention pond. The land is located along State Highway 80, east of State Highway 21.
The site plan was prepared by Powers Brown Architecture for Seefried Industrial Properties, an Atlanta-based developer of industrial real estate.
Concept site plan for the Katerra factory in San Marcos.
Adriana Cruz, president of the Greater San Marcos Partnership, told City Council at an Oct. 16 session that the city was in competition for the factory with a North Texas city.
Katerra is a young company, founded in 2015, that has been growing rapidly through its ability to raise venture capital. According to Global Construction Review (GCR), Katerra obtained $865 million in January. There is one operating factory in Phoenix, Arizona, a second under construction in Spokane, Washington, and two others planned for locations in Tracy, California and San Marcos, Texas.
Courtesy: City of San Marcos
In a work session prior to the council vote on Katerra, staff sought direction on how to proceed with a short-term solution to flooding along the Blanco River. The flooding began after an epic flood in 2015. What followed was an agreement in December 2016 with U.S. Housing Urban Development on a Community Development Block Grant for Disaster Recovery; $33.7 million was allocated, but it must be spent by December 2022.
The long-term solution planned for the river is to construct a bypass channel that will circumvent a wide bend in the river, cutting a path straight south from near Blanco Shoals Natural Area to east of Three Dudes Winery at State Highway 80. That is a $74 million project that would benefit 836 buildings, but it goes beyond the scope of the HUD grant.
A near-term solution that is also effectively the first phase of the long-term solution involves construction of a berm from Hwy 80 to Old Martindale Road (FM 295), roughly parallel and east of River Road. The berm would direct flood waters toward a shorter, separate flood channel, referred to as Diversion 2. This would protect Blanco Gardens, one of the hardest hit neighborhoods in the 2015 floods.
Two options were presented for the berm–with Berm A being closer to the river and Berm B closer to River Road. Staff said Berm A would be more vulnerable since the river shifts its route and could eventually reach the berm. However, Berm A would require purchasing private properties.
Courtesy: City of San Marcos
Council suggested staff concentrate its efforts on the Berm A route.
The short-term project is not fully funded. It would cost about $14 million. San Marcos has apportioned just under $7 million from the CDBG grant for this phase and has about $2 million from a Texas Water Development Board loan. That leaves a gap of $5 million.
Laurie Moyer, director of engineering and capital improvements said schematic drawings are underway and the environmental assessment will be complete and submitted for federal review the first quarter of 2019.
Once the environmental clearances are done, the city can begin acquiring right of way easements. Construction could begin in 2020.
The berm, #1, would direct flood waters to a diversion channel, #2. The longer term solution will be a longer diversion channel, #4, to be known as the Blanco Riverine. Courtesy: City of San Marcos