Woes for Lowe's

Oh to be a fly on the wall when the City Council moves into executive session today (Thursday) to hash out a legal setback that could permanently negate a complicated settlement agreement with Lowe's Home Centers Inc. Meanwhile, plaintiffs in a lawsuit against Lowe's and the city of Austin hope to land another victory next week, after two favorable rulings bolstered their assertion that a Lowe's home improvement store under construction on Brodie Lane should comply with the city's Save Our Springs Ordinance.

In the first ruling on June 15, District Judge Lora Livingston sided with the city of Sunset Valley, the Save Barton Creek Association, and the Save Our Springs Alliance, agreeing that a six-vote "supermajority" of the Austin City Council was required to approve the Lowe's settlement. The council narrowly approved the agreement last December on a 4-3 vote after a harried series of 11th-hour deal breakers.

The SOS ordinance, which voters adopted in 1992, requires six council votes to approve development projects that don't adhere to strict water quality regulations within the Barton Springs watershed. (Previous controversial development deals, such as 2002's settlement with Stratus Properties, earned the votes of at least six council members.) The Lowe's project includes 40% impervious cover – nearly three times more than is allowed under SOS. City attorneys had argued that a supermajority vote wasn't necessary because the council was voting to approve a lawsuit settlement, not to amend SOS itself.

Three days after Livingston's decision, District Judge Darlene Byrne dealt Lowe's a big blow with a temporary restraining order that brought construction to a halt for two weeks. The parties will return to court July 1 for a hearing on a temporary injunction order. Regardless of the outcome, this case and its anticipated appeals could be left hanging for a while, unless both sides are able to reach an out-of-court settlement.

The legal turn of events adds another layer of complexity to what had already been a multilayered case, starting when the city of Sunset Valley ceded the Lowe's property to Austin, with the idea that Austin would enforce SOS. Lowe's filed suit against Austin when the city balked at its site plan, and then went to the Texas Legislature for some extra cushion: House Bill 1204, which aimed to place the development under Travis County's much-less-stringent jurisdiction. For that reason, city officials say they opted to negotiate a settlement that included water-quality control measures and other environmental features. "My best hope today remains what it was last year when we negotiated a settlement, that is, to not have Travis County rules apply," said Mayor Will Wynn. "My worst fear is that this legal case will in fact cause Travis County rules to apply."

Last week's rulings also raise questions about what happens to the $1 million that Lowe's has already paid the city in mitigation fees as part of its settlement, which the city has already spent to acquire conservation land. Moreover, Lowe's has already cleared the Brodie Lane site and poured concrete for the 162,000 square-foot store; right now, the site may already be out of compliance with SOS impervious cover limits.

When the council voted on the Lowe's deal late last year, Council Members Daryl Slusher, Raul Alvarez, and Danny Thomas cast the dissenting votes. Council Member Brewster McCracken had campaigned on a platform that promised no big-box stores over the aquifer, but six months later voted "yes" on Lowe's, arguing that the combination of legal and legislative action left the city little choice but to settle. McCracken, an attorney, said Monday that it's likely the city would appeal Livingston's ruling "because we've taken the $1 million and already spent it."

At the time, he said, "The challenge we all believed we faced was that if we did not settle and went to trial, we would face a very challenging case against us. If [Livingston's] ruling is correct," he added, "and if we had known that it was the law, we wouldn't have voted for the settlement."

Slusher said he voted "no" because he didn't believe the agreement measured up to prior settlement agreements, like Stratus, that offered the city less impervious cover and no big boxes. He remembers the discussion of the supermajority issue differently from McCracken. "Everybody on all sides knew that it was risky to approve it with only four votes," he said, "but Lowe's wanted to go forward with it, and the majority of council wanted to go forward. I made my decision based on whether I thought it was in the best interest of the city."

From the plaintiffs' perspective, David Frederick, an attorney representing Sunset Valley, says it's likely that his client and the two environmental groups will prevail when they return to court next week. "I don't know where the city of Austin ever got off thinking that just because it was a settlement agreement that it was not in violation of SOS," he said. "It would be nice if the city would apply more weight in defense of SOS. Of all the ordinances that have been passed over the years, this is the one that they should be defending, because it was a citizens initiative, not just some political deal at City Hall."

Brad Rockwell, the lead attorney on the case for the SOS Alliance, says his group would be open to negotiations with Lowe's – as long as the final agreement met the city's SOS requirements. "I would like to see Lowe's permanently stop construction, or I'd like to see Lowe's or someone else use that property in a way that's consistent with the SOS Ordinance," he said. Lowe's did agree to a number of water-quality controls and other environmental measures, but even with a sign on site that boasts, "This is a Green Building," those promises seem hollow against a messy backdrop of construction rubble.