VAN ALSTYNE, Texas (KTEN) — Megatel Homes is a North Texas building company that is bringing 4,000 homes and 1,000 apartments to Van Alstyne.

While the city is embracing the growth, leaders have a few concerns they want to be addressed.

The city is negotiating with Megatel to redesign the layout of the proposed development, which is planned for 40-foot lots. The city currently requires a minimum of 65-foot lots.

"Some density, small lot development, would be acceptable," City Manager Lane Jones said, "but we do need to see some larger lot concessions."

Megatel's plans do not include any parks, schools, trails or amenities aside from one laguna.

"Residential development of 4,000 homes requires two elementary schools, one junior high and part of a high school," Jones said.

City staffers estimate the development will bring more than 12,000 new residents, and Van Alstyne's schools and facilities are not equipped for that kind of influx.

"We need to plan those things into the development to improve quality of life for everybody that lives in Van Alstyne," Jones said.

Megatel also wants the development to become a municipal utility district, meaning utilities wouldn't be provided by the city, and tax rates could be lowered or raised independently.

"We're asking them to reconsider that," Jones said. "There are some other mechanisms in place that would make the city a lot more cooperative in working with them as opposed to a MUD development."

Negotiations are continuing, and the city is optimistic an agreement will be reached that benefits both parties.