Urban Style Mixed Used Development Approved for FM 150 East of I-35 in Kyle

KYLE, TEXAS – The Kyle City Council approved a Development Agreement for a 45-acre mixed used development on the East side of I-35, during the June 18, 2024 meeting.  

The development, known as Project Two Step, will be split into two tracts of land along FM 150 East between Hill Street and Mikey Court. 15-acres to the East of FM 150 and 30-acres to the West, broken into three parcels consisting of retail and dining options, office space and multi-family residential land uses with a wide-ranging list of amenities including an amphitheater, dog park, additional park land, Vybe trail construction and a parking garage structure.  

“This project is going to bring a lot of new, exciting attractions to the East side of Kyle. Filling an ongoing need for our residents, attracting new businesses, and creating a destination location for visitors,” said City of Kyle Economic Development Director Victoria Vargas.  

Requirements of the Development Agreement include pre-approved building materials, utility and capacity upgrades, and TxDOT improvements to FM 150 East including new deceleration and acceleration lanes, an additional signal to allow pedestrian movement between the developments, median modifications, turn lanes, and landscaping enhancements. 

Over the next 20 years, expected revenue from this development is estimated at $5.3 million in sales tax and $10 million in property tax, which would go to the City of Kyle’s Tax Increment Zone No. 6 to provide public improvements. 

To help fund the project’s amenities, Kyle City Council approved a performance-based Chapter 380 agreement with Capella, the commercial real estate and development firm spearheading the project, granting a 50% rebate on the property and sales tax generated over the next 20 years.  

One stipulation of the agreement requires the developer to complete the items listed in Phase 1 including the parking garage structure before any multifamily units come online. The 380 agreement also outlines the possibility of halting payments should improvements not be completed by the performance deadline in subsequent phases. 

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About the Kyle Economic Development Department     

Kyle’s Economic Development Department is a full-service organization providing resources and solutions for businesses and projects of all sizes. The department is a key component of the Community Development Team which seeks to create a thriving community. For more information, call the Economic Development Department at 512-262-3932 or go to KyleED.com.