Building a Better Hill Country Suburb?

Developers Dick Rathgeber and Terry Mitchell propose clustering 900 homes in their Headwaters at Barton Creek project so that the majority of the parcel can be preserved as open space.

But environmentalists say that's still too many homes, and the adjoining proposed commercial project also gives them pause.
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With wide-open spaces west of Austin on the verge of extinction, two local developers have laid a high-stakes proposal on the table that could become a Central Texas model for turning open spaces into ... open spaces.

Developer/philanthropist Dick Rathgeber and longtime home builder Terry Mitchell have crafted a plan that would leave 1,000 acres along Barton Creek in their natural pristine state, while clustering 950 homes more than a mile away on a smaller portion of the tract. The subdivision, to be called Headwaters at Barton Creek (the headwaters are actually a few miles west), would have New Urban design characteristics, with narrow streets to reduce impervious cover.

The proposal needs several pieces to fall into place before it can go anywhere, including the approval of the Dripping Springs City Council (the property is just east of the city, within its sizeable extraterritorial jurisdiction), and the endorsement of the board of the Hill Country Conservancy, a nonprofit land trust that would manage the open space. The Conservancy is holding off on considering the project while awaiting more info on the proposed development's water-quality controls and other environmental features.

It's just as well. Rathgeber, who recently acquired the Hazy Hills tract from the Pressler and Townes families, says he's not in any rush. It's rare when developers aren't in a hurry, and rarer still when they grow giddy over the prospect of not developing a nice spread like this one. The open space will be preserved as a trail-lined wilderness park – three times the size of Zilker, Rathgeber points out. That's a good reason, he says, for not rushing things through willy-nilly. "I want this to be the very best," he notes. "Not many people are offered the opportunity to create a park on Barton Creek."

Environmentalists are watching this one closely. They love the open-space proposal, but they believe the number of homes proposed is still too high for the terrain. "A thousand new homes in the Barton Springs watershed would result in more oil and grease, more sewage, and more traffic over the most sensitive watershed in Texas," said Save Our Springs Alliance spokesman Colin Clark. "We would like to see the development scaled down to a level that retains the rural character of the Hill Country west of Austin."

That's where Rathgeber and Mitchell put their developer hats back on; they argue that the open space simply can't be financed with fewer than 900 homes with a price range of $170,000 to $600,000. Rathgeber says that's what he needs to make a profit on this deal. "It's like the nuns say – 'no margin, no mission.'" Added Mitchell: "We did some calculations and realized that we needed 900 to 980 homes to make this work. We just couldn't get by with 500" – a more palatable number for environmentalists.

Still, the size of the residential development is of less concern than an unrelated yet tangential component of the project. The Townes/Pressler landowners chose to hang on to 178 acres of the Hazy Hills tract for commercial development along US 290. Thus far, they've shown little apparent interest in developing the property to complement the proposed New Urban neighborhood it would serve.

"The lack of controls on the commercial side is a potential nightmare," said Robin Rather, speaking independently of her position on the Hill Country Conservancy board. "Why have open space and a clustered 'green' residential design, only to be slammed with a megamart big-box hell of a front end? If those who build the commercial are not open to any of the alternatives for limiting impervious cover, applying green building standards, let alone provisions for local businesses, then the project as a whole is at risk," she said. "We need to preserve the rural character of the Hill Country, not create yet another suburban wasteland."

George Cofer, the Hill Country Conservancy's executive director, has had his eye on the Townes/Pressler property for several years. In 2000, when times were more flush, the conservancy offered $12 million for the land, only to be turned down because a better offer had come along. Had the economy stayed afloat, the property might well have become a golf course resort or some other big development. Then Cofer heard about a fellow named Michael Luigs, a real-estate broker who buys and sells ranches for conservation purposes. The conservancy hooked up with Luigs to try and find a buyer for the Hazy Hills tract – that is, a buyer who'd be willing to dedicate a large portion of the property to open space. Luigs put up some earnest money and put the property under contract. Then things started to happen. Mitchell, an experienced homebuilder, and Don Bosse, a land planner, were brought into discussions. Mitchell took the idea to Rathgeber, who decided to bite.

Rathgeber, in turn, took the proposal to his banker Chip Bray, executive vice president of Liberty Bank. As a homegrown institution and contributor to the SOS Alliance, Liberty is particularly cautious about extending loans to developers with projects in watershed areas. "Good will is so hard to generate and so easy to lose," Bray said. But after mulling over the proposal for a while, he decided it would be something Liberty could bank on. "From our perspective, getting involved with a project of this magnitude, that includes the preservation of land, is a great opportunity. The last thing we want to do is be involved with a project that is [environmentally] controversial," he said. "We're Austinites."