The Austin Chronicle

Dotting i's, Circling C's

Simplifying the Tortured History of Circle C

By Kayte VanScoy, December 19, 1997, News

illustration by Doug Potter

Every time I hear the words "Circle C," I cringe.

Guaranteed, what follows will be a full regaling on the topic, complete with jargonized references to laws and lawsuits, legislation and legislators, land deals and watersheds -- to say nothing of fat cat developers -- each of which act as secret passwords keeping the uninitiated from understanding this most complex of news stories. Like all of the best infotainment -- Watergate and Whitewater, O.J. and the House of Windsor -- either one has followed the tortured progress of the Circle C Ranch, or one has not, and never the twain shall meet, apparently.

Well, this week, at very long last, Circle C is set to become the newest card-carrying member of this frightening burg of environmentalists and anarchists. Mayor Kirk Watson is boldly going where no one has had the chutzpah to go before, annexing Circle C into the City of Austin. And in tribute to the tenacious efforts of the Circle C residents who have fought the city at every turn, I offer the following guide to the recent legalese generated by their efforts to remain sovereign subjects of the Circle C Ranch.

Let's start with the fat cats. For the purposes of this brief overview, all you need to know is that FM Properties, a subsidiary of Freeport-McMoRan and Jim Bob Moffett, owns Circle C's commercial property, and Gary Bradley of Bradley Development (along with several other investors in a company called Phoenix Holdings) owns Circle C's residential property. (No representative of these fine organizations agreed to comment for this story.) There has been a lot of swapping of who owns what, and who owes what out at Circle C, and there are a couple of juicy lawsuits that go along with that circus. But that's another story.

Next comes the consent agreement, which is the one-night stand in the conception of this bouncing baby paper trail. The consent agreement established the Circle C Ranch as a Municipal Utility District (MUD) of the City of Austin. Austin agreed to extend water and sewer lines out to the development, and Circle C agreed to let the city set up a MUD land plan which designated certain land uses and development standards for the property. Circle C also agreed that they would eventually be annexed in exchange for services. "Eventually" being the operative word.

Circle C homeowners have argued during annexation hearings that this consent agreement is no longer valid because of bad blood between the MUD and the city. "Over the course of time, the agreement has been violated by both parties," says homeowner and recent spokesperson for homeowners, Garrick Colwell.

Mostly, Colwell is referring to the Circle C master plan which, Circle C homeowners say, was approved by the City of Austin when the development began in 1982, and then was essentially voided by the passage of the Save Our Springs (S.O.S.) water quality ordinance in 1992. S.O.S.'s strict standards for impervious ground cover would allow only a portion of Circle C's plans to be realized. But, as Daryl Slusher has pointed out to the homeowners again and again, the consent agreement also bound Circle C to stay in compliance with the City of Austin's water quality ordinances "as those ordinances change from time to time."

So what dog have the Circle C homeowners got in this fight between their developers and the city? Why shouldn't homeowners prefer to live around fewer homes, instead of fighting for full build-out of their neighborhood? Big, fat perks, paid for through homeowners association dues, that's why. Currently, the Circle C Homeowners Association is subsidized by Bradley Development, funding extras like a neighborhood pool, a childcare center, landscaping, and Christmas lights. Homeowners say that the passage of S.O.S. jeopardizes their right to these luxuries.

"For all intents and purposes, [annexation] in Circle C's case will create the doughnut theory in reverse," Colwell says, referring to the oft-heard "hole-in-the-doughnut" rationale for annexation. The theory goes that annexation of outlying areas prevents the economic gutting of a city's core. "If S.O.S. is imposed on Circle C, and it will be, it will basically retard any future growth of any quantity. We will never meet the necessary number of homes to meet the homeowner's fees to continue our lifestyle," he says, citing the pool and childcare center as top priorities.

And that, my friends, is the primary engine behind the complex morass of legal fights which Circle C has waged against the City of Austin. A nice pool, a day care center, and Christmas lights.

To defend its precious way of life, Circle C began with the legal assertion that the S.O.S. ordinance is "arbitrary and capricious," a violation of the Texas water code. Without going into gory detail, it is important to note that the future of the ordinance currently rests in the hands of the Texas Supreme Court. After being struck down in a Hays County court and upheld in the Third Court of Appeals, it has sat on the State Supreme Court docket for a year. Oral arguments were heard in November, but no one expects a judgment until at least February or later.

But Circle C has not stopped there. In the 1995 legislature, lobbying by Bradley and Moffett successfully passed two laws -- Senate Bill 1017 and House Bill 3193 -- both of which set up separate ways for water quality zones to be drawn independent of any other governmental entity. First, Circle C banked on 3193, which allowed them to draw a little circle around themselves and call it Southwest Travis County Water District. The water district allowed them to be exempt from annexation and, most importantly, to set their own standards for water quality protection -- allowing full build-out of the neighborhood.

Austin took 3193 to a state district court, on the grounds that it violates the Texas constitution by preventing the home rule of cities. Judge Scott McCown ruled in Austin's favor, saying that for two reasons 3193 was, indeed, unconstitutional. First, because it specifically bracketed only Austin out in its language, and second, because it favored particular people. "If laws can be passed to favor particular people or disadvantage particular localities then -- as the constitution's framers knew too well -- private interests will prevail over the public interest," McCown wrote on August 23. The Homeowners Association tried to defend 3193 in court, as did the Circle C MUDs, but both claims were struck down.

As soon as McCown's ruling felled the water district in August, the city moved to annex Circle C. The city's speed took the development by surprise, but it tried to regroup in a number of ways. First, the district immediately appealed McCown's decision on 3193 to the Third Court of Appeals, where it remains undecided. Secondly, Circle C developers moved to enact the provisions of Senate Bill 1017, which allows for the drawing of water quality zones. The development is engaged in trying to draw two of these zones right now which, by stipulation of SB 1017's language, prevent annexation for 20 years.

Colwell admits that the zones have absolutely nothing to do with water quality, saying the plan is just "another legal solution to the annexation issue." The problem for Circle C is that this fact is also blatantly obvious to the courts. Private counsel for the city, Karl Bayer, points out that when McCown struck down 3193 he said, "there has to be some reasonable basis between the [water quality] district that is set up and the goal for setting it up." In other words, you can't use water quality zones to avoid being annexed. Nevertheless, two plans for water quality districts around Circle C have already been submitted for approval to the Texas Natural Resources Conservation Commission, and the city has filed oppositions to them.

Finally, even as the city began its annexation, Circle C attempted court-ordered solutions to stop them. The homeowners' request for a stay on Austin's annexation went all the way to the Texas Supreme Court before it was denied last Friday. By that time, the council had already approved the annexation on first reading, cautiously forestalling full approval until hearing the Supreme Court decision. Now that the court has opened the gate, though, this bucking bronco is set to ride.

The city will certainly complete the annexation this Thursday. And then what? Well, the decision about the constitutionality of 3193 is still up in the air. And there's always the 1999 state legislature, where conservative lawmakers are lining up to try their luck at the Austin dunking booth. But that's not stopping the council. "I think that the Texas Supreme Court will affirm McCown's opinion, and when that's done, I think any attempt by the lege to single Austin out for punishment would be unconstitutional," Bayer predicts.

Then again, who knows what creative ways Circle C might invent to forestall the inevitable. And good luck keeping up with the machinations as they develop. As Grant Godfrey, legal counsel to the S.O.S. Alliance jokes, "If you're confused, then you probably understand it."

This Week in Council: Council-member Beverly Griffith asks for $90,000 for the Heritage Society's "community values based vision for downtown." Also, the final, final annexations, including Circle C and 183 East.

Copyright © 2022 Austin Chronicle Corporation. All rights reserved.