Annexation Relief Act

illustration by Doug Potter

Who would have thought, during the afterglow of the May 1997 elections when the Green ticket swept the City Council races, or during the long trudge of annexation hearings last fall while the environmentalists stood beside their council and the newly annexed cursed their oppressors, that the Green Council would soon have an opportunity to facilitate the very urban sprawl it had vowed to squelch? Last week's emergency meeting of council was, in fact, an unavoidable part of the unprecedented annexation of 13,000 acres which was completed in December 1997. But inevitability doesn't take the sting out of watching the Green Council give the go-ahead on hundreds of new homes to be built over the Edwards Aquifer - homes that not only should be built to conform with the strict Save Our Springs water quality ordinance, but which the council could have forced to be built to that standard. Not wishing to add years to the litigation already pending over annexation, however, the council instead made a rare attempt to find common ground with the suburban real estate developers affected by annexation - the same developers whom councilmembers have, each in his own way, publicly reviled.

"There are human issues involved," says Toby Futrell, the assistant city manager who oversees city planning. That's another way of saying that if the council had made it difficult for the developers to finish their planned subdivisions, an endless line of pregnant mothers and ailing grandparents would have been marched through council chambers and county courtrooms as evidence that annexation was bringing hardship to the masses. City Planner Greg Guernsey reports that city planning offices are already "besieged" by phone calls and requests for the city to bail out homebuyers and developers who were caught in the middle when annexation began. The action council took last week, and which it plans to finish this week, was merely an attempt to tie up the loose ends which its hasty fall annexation campaign left behind.

On the face of it, the annexation crusade created two types of problems - in the parlance of city planners, horizontal and vertical. That means problems with developing the infrastructure of subdivisions - that's the horizontal realm of the real estate developer - and problems with constructing homes, that's the vertical universe of the individual homebuyer. The issue is, what rules should apply to new homes - the new rules of the annexing city, or the old county rules, which are for the most part much less restrictive? The real problem is how to draw the line of what constitutes a "home" or a "subdivision." And how far along was "far enough along in the process" that the city had to consider the developer's or homeowners' rights vested in the project?

According to case law precedent, these lines are pretty cut-and-dried. A home exists when the foundation is poured, and a subdivision exists when all the infrastructure is in and the final plats for each lot have been approved. Therefore, council could have applied city watershed and zoning ordinances - theoretically at least - to all the property in the newly annexed areas which hadn't reached these stages of construction. Instead, however (and perhaps surprisingly to those who expected the Green Council to be hard on urban sprawl), council chose to broaden those parameters to allow even homeowners who had only gone as far as signing a contract for home construction to fall under the less restrictive county laws. And, perhaps even more surprisingly, the environmental community rallied to the council's support. "Nobody was contending that these people should be forced to do something that they had no idea they were going to have to do," says Bill Bunch, legal counsel for the S.O.S. Alliance, and normally a bulldog on environmental questions.

But does all this philanthropy come out of the goodness of council's heart? Hardly. More like from a rational fear of not only the court system, but more importantly, the conservative 1999 Texas Legislature, which has already promised to come after Austin for its annexation actions. "The council has gone one step beyond [what the courts consider vested rights] and considered other factors that are important to the citizen... rather than have the city go into litigation on every house and every building," says City Planner Guernsey. Councilmember Beverly Griffith's aide John Gilvar describes the strategy as being "particularly careful to make sure that not only were they fair, but gave the appearance of being fair."

Council's decision to grandfather in homebuyers will be applied to all the newly annexed areas surrounding the city, but the most significant differences between already constructed property and city rules come in the Circle C area, where applying S.O.S. would put homes on one-acre lots instead of the much smaller 40- and 50-foot lots which are currently being constructed. But the importance of the grandfathering is not only for water quality ordinances, but for other city restrictions as well, such as height restrictions and setbacks from the road. (However, all the homes and subdivisions grandfathered by the new ordinances will still have to meet city building codes for electrical and plumbing systems.)

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Mercy on Homebuyers

The ordinance which council passed during last Wednesday's special-called meeting addressed the easy part - individual homebuyers. It's not hard to rally support behind a pregnant mother, stuck in a rental home, waiting to hang wallpaper in the nursery. Now, all homebuyers who had at least signed contracts for new homes prior to annexation can proceed with their original home plans, small lots and all.

The tough sell comes this week, when relief for developers comes up for second and third reading. If the city chose not to recognize subdivisions which had been approved by the county, the decision would, for now, affect only Circle C, since all the other annexed areas were already in Austin's extraterritorial jurisdiction and filing final plats with the city. But Gary Bradley is no pregnant housewife, and helping out the Circle C real estate mogul has never been on this council's agenda. On the other hand, spanking Bradley and Circle C is not going to help the city's case at the legislature when the city will have to argue that the annexations were purely an issue of fiscal economics and not personal vendettas.

So the second part of this Annexation Relief Act will allow developers - those who have already sunk 10% of the original price of their land (or a million dollars, whichever is less) into infrastructure - to be grandfathered in under whatever set of laws that developer has already been using. According to Susan Hoover, of Bradley Development, that's just what the city promised it would do during annexation, and now Circle C is holding the city to the bargain.

But what kind of bargain is Circle C really keeping? Although Hoover denies it, an official with Travis County confirms what city officials have only heard rumored: that Circle C has continued to file its site plans and building permits with the county despite the fact that the subdivision is now fully and legally annexed by the city. "We seriously don't understand what we're supposed to be doing" with the documents, says the county official, who reports that the county is, nevertheless, keeping them on file.

Which, of course, is the whole point. If Circle C pulls through the long shot and wins the war of litigation it has launched against Austin and its annexation, those documents will be ready and waiting to be approved. At the moment, decisions on two critical lawsuits are pending, and if the results go Circle C's way, the documentation to finish out its subdivisions will be waiting. Circle C's own private water quality district, the Southwest Travis County Water District, was successfully challenged in court by the city and struck down by County Judge Scott McCown. That decision was appealed to the Third District Court of Appeals and oral arguments in the case were heard last week. If the water district is revived in the appeal, then its development standards in regards to water quality standards will be applied to the Circle C area. But if it is finally struck down in court, then the restrictive S.O.S. standard will be applied to all the lots on Circle C which were not final platted before annexation. And that's a lot of lots, by the way, so both the city and Circle C will fight to the death over how they should be developed. Meanwhile, S.O.S. itself is still waiting on a decision from the state Supreme Court, which heard final arguments in November on the constitutionality of the strict water quality law. If S.O.S. is struck down, then obviously Circle C would have nothing left to worry about regardless of what grandfathering law the council passes this week.

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This Week In Council: $3.5 million in subsidies to Dell Computers, SCIP 2 is back, and the continuation of the Annexation Relief Act.