Magnolia Texas is Expanding


September 3, 2014

The city of Magnolia is setting the stage for significant future development and population growth with the annexation of several new land tracts in recent months.

Since May 2013, the city of Magnolia has annexed eight land tracts ranging in size from a few hundred feet to more than 150 acres, which has extended the city limits to the FM 149 spur and FM 1488 intersection near Magnolia High School. Additional acres on the outskirts of the city prime for development include the 1,138-acre Legacy Trust tract and the 6,500-acre Woodard Tract, Magnolia City Administrator Paul Mendes said.

Though many of the land tracts have been on the city’s radar for a few years, developers have proposed detailed plans in recent months to construct retail centers and single and multifamily housing units on the properties, Mendes said. The new developments are projected by city officials to increase the population of the Greater Magnolia area by at least 50,000 in the next decade if each of the proposed projects are carried out.

“It’s been a long time coming, but the growth is coming to Magnolia,” Mendes said. “We’re working with all of these developers, and we’re trying to be as cooperative as possible. They’re coming—there’s no question about it—and what we’d like to do is try to maintain the charm and personality of Magnolia in a larger population.”

Future developments

The 163-acre 306 Montgomery Limited tract annexed in June—known as the “Golden Triangle” due to the area’s central location for future growth—is on the verge of development.

Cyndy Garza-Roberts, public affairs director for the Houston region of H-E-B, said she could not confirm whether the company is meeting with city officials to scout a location for a new store at the Montgomery Limited tract. However, Garza-Roberts said the company has displayed an interest in doing business with Magnolia.

“As the Magnolia community continues to grow, that’s certainly an area we are exploring,” Garza-Roberts said.

As the Woodard Tract and Legacy Trust plats are developed in the future, additional grocery stores may be proposed for neighborhood shopping centers, Mendes said.

The first portion of the Woodard Tract—known as Magnolia Woods—is located outside of the city limits on 593 acres about a mile past FM 1486 and is projected to include 1,500-1,700 homes. Depending on whether the area secures a developer, construction could begin as early as next year, Mendes said.

Pete Peters, vice president of Concept and Development Planning in Austin, works with Varde Partners, a real estate company based in Minnesota that owns the Woodard Tract.

“Varde [Partners] ended up with the land, and they’ve had it for a number of years,” Peters said. “It just seems like development is coming to the area soon. [Varde officials] do want to do something with [the land], but they probably won’t end up being the developer of it.”

Utility expansions

As land tracts are annexed into Magnolia, water and sewer lines are extended out to the new areas to provide utilities and fire protection, Mendes said. This summer, city officials have been finalizing right of way agreements along FM 1488 to extend water and sewer lines within 18 months to several properties, he said.

These areas include the Montgomery Limited tract, the 32-acre Buck Grass Stables property annexed in August and other areas along the route to allow new development to begin, Mendes said. The city will also extend water and sewer lines in the near future to the Magnolia Woods portion of the Woodard Tract. Though the area is outside city limits, the tract has the potential to be annexed in the future.

Mendes said several municipal utility districts were registered in the Woodard Tract several years ago. The MUDs are likely to supply water and sewer lines to the rest of the 6,000 acres not anticipated to receive utilities from the city due to the large size of the property, he said.

To further accommodate the expected growth, Magnolia has proposed the construction of a second wastewater plant within the next two years along Nichols Sawmill Road near the existing one. The new wastewater facility is expected to accommodate up to a capacity of 2 million gallons of water each day—increasing the city’s daily capacity to a total of 2.6 million gallons with the two plants combined, Mendes said. Over time, the city will likely phase out the original wastewater plant, he said.

The estimated $15 million cost of each wastewater plant could be funded through an increase of sales tax revenue collected from the new retail centers. Magnolia Mayor Todd Kana said impact fees—a one-time fee charged to developers of new properties to supply utilities—will also help fund the new wastewater plants and the extension of the water and sewer lines to the annexed properties.

“The city and its citizens have bought and built a wastewater system, and when somebody wants in on it, [impact fees are used for] buying an initial portion,” Kana said. “Fees are collected and used for expansion of the system in the future. They keep the system going and make sure everyone chips in.”

Future effects of development

Kana said securing sales tax revenue is vital for the city’s future development, and it is important to maintain a good balance between retail centers and housing units. Magnolia is becoming increasingly attractive to developers as a result of the city’s low tax rate, its proximity to oil and gas corporations, such as ExxonMobil and Anadarko Petroleum Corporation and the amount of available acreage in the community, he said.

“We’re always looking at the sales tax—either businesses are drawn to us because of the demand created by residential development or future growth,” Kana said. “It’s definitely going to make things different for us in the future with the growth coming. It’s going to ease the burden on the current citizens because it takes the operation costs and spreads it over a larger area.”

With a population of 1,500, Magnolia is classified as a type-A general law city that must follow laws set by the state, Mendes said. If the population grows to at least 5,000 in the city limits, Mendes said he anticipates voters will be able to decide in about two years whether to become classified a home-rule city, which would grant Magnolia the ability to write its own laws.

“Conceivably if everything went the way [the Woodard Tract developers] are talking about right now, [the development] could have close to the population of Conroe next to us,” Mendes said. “We could become a medium-sized city as opposed to a tiny city.