The Austin Chronicle

Developing Stories: The Mistake on the Lake

The murky depths of ' v. City of Austin'

By Katherine Gregor, September 21, 2007, News

In following the twists and turns of fact, historical fable, and incendiary allegations related to's lawsuit against the city, it helps to have the tenacity of a bulldog litigator. The suit seeks to make the city honor legal protections for the natural open space along the shores of what is now Lady Bird Lake, as contained in the original 1986 Waterfront Overlay Ordinance. A Travis Co. dis­trict judge has upheld the validity of the lawsuit; the city has appealed. The lawsuit raises intriguing questions: Was the entire Land Development Code – the laws that specify what can be built in Austin and where – illegally rewritten in 1999? Have developers and their attorney-lobbyists created pockets of undue influence or even corruption in city government?

The Disappearing Height Limits

As the advocacy group explains it, " filed suit against the city to reinstate height limitations that preserve the historic Town Lake Corridor." Yet the Waterfront Overlay Ordinance, as it's currently on the books, includes no explicit height restrictions. In a 1999 "plain English rewrite" of the Land Development Code, the height limits in the original 1986 WO Ordinance were removed – in the course of revising a progressive "bonus provision" system, under which developers originally could earn "bonuses" of additional height (now floor-to-area ratio, or FAR) by following design guidelines and providing community benefits. The bonus system was forward-thinking: Only today, two decades later, is a similar system of density bonuses being proposed for Downtown.

One murky point: and its pro bono attorneys, Bradley Clark and Scott Hendler, hold that the law's original 1986 intent was to limit height absolutely. In practice, that's the effect WO height limits had, except for a few tracts (such as those with "L" base zoning described in "Developing Stories" last week) already entitled to greater heights. But city legal is claiming, and advising council members, that is wrong. Said Lee Leffingwell recently: "This is a point of disagreement between the city attorney and the Save Town Lake folks. It may be that the only way to get clear on this is to rewrite the WOO and revisit the height limits directly."

However the height interpretation goes down, the lawsuit raises a more far-reaching issue. The plaintiffs allege that these changes to the WO Ordinance in 1999 were illegal – and thus voidable. If a court finds in their favor, it could call into question the legality of the entire Land Development Code rewrite.

Changes of Substance

In Texas, thanks to the Open Meetings Act, a city can't change its laws without first putting its citizens on notice and holding public hearings. If substantive changes are to be made – such as removing all height limits in a zoning category – they must be publicly posted. The lawsuit says these postings never occurred. Indeed, it appears that the entire set of 1999 changes to the Land Development Code was instead posted – and adopted by council – as "nonsubstantive." The transcript of the February 1999 council session shows no prior discussion nor public comments. But then-Mayor Kirk Watson and council members do describe the "plain English rewrite" as "nonsubstantive" and "purely housekeeping."

Why were the bonus provisions and height limits removed? A 1999 Chronicle article ("Condo Clash" by Jenny Staff Johnson, Oct. 1, 1999), provides a clue. At the time, opponents of the Gotham, another reviled high-rise condo project then being contested in the Waterfront Overlay, were surprised to find that the WO height restrictions had vanished from the code earlier that year. Notes the article:

"A memo from city attorney Andy Martin disputed that the Waterfront Overlay contained height limits. The 35- to 60-foot limits, which some interpreted as height limits, were instead height 'bonuses' that allowed increases above the height allowed by a given zoning category. But because of ambiguities regarding where the bonuses could apply [emphasis added], they were removed in the course of the rewrite. Assistant City Manager Toby Futrell, who oversees the city's land development regulations, says she will revisit the issue, and that height limits and bonuses could be reinstated in the code."

In the WO code on the books today, bonus provisions exist but without reinstated height limits. (The current ordinance allots bonuses as additional floor area, which can translate to additional height.) attorney Clark thinks the whole account of cleaning up "ambiguities" sounds fishy – and illegal. It's no secret that Futrell has been most congenial toward developers and their lobbyists, he points out. Was no one on watch as developer-friendly changes to city law got made in the name of housekeeping?

Whistle-Blower Memo

Someone did blow the whistle. A memorandum on file at the Austin History Center gives evidence that council was alerted to the substantive changes. An Aug. 21, 1998, memo from Alicia Reinmund, a Smart Growth focus group member, was sent to Mayor Watson and Council Members Jackie Goodman, Daryl Slusher, and Bill Spelman (the council subcommittee for the LDC rewrite). Copied were Futrell and the other focus-group members. Reinmund recently appeared before the Parks and Recreation Board to verify the memo.

In it, Reinmund had alerted council: "The rewrite of the Land Development Code has included changes in content. City legal staff tells us that their rewrite does not include changes, only language simplification. Some Focus Group members believe that staff is making changes in the code, not just simplifying the code."

Reinmund's memo also expressed frustration that council members were not adequately involved in, or attentive to, the group's work. That included "simplifying the code." She expressed concerns that Futrell, rather than council members, had been defining the group's work products and that its members' input was being ignored. And she recommended that council members, not staff, should start leading the meetings. Reinmund said recently that the mayor and council began paying more attention and attending meetings after her memo.

The massive code rewrite was a long and tedious project. As attorney Clark notes, the WO portion alone is perhaps a half-inch in a 2-foot stack of LDC documents; the code being simplified in 1999 was one-third longer than today's. Futrell told the Chronicle that all concerns raised about substantive changes were vetted appropriately at the time. Yet somehow – by someone – such changes got made. Did council members carefully read the rewritten WO section? Did their eyes glaze over, or did they knowingly ignore the fact that staff members were altering city laws in significant ways?

Attorneys for the plaintiffs have moved to depose numerous actors in this drama, including Futrell. According to Clark, the legal department Futrell directs has taken a highly antagonistic stance to prevent the case being heard on its merits. Tom Cooke, vice president of, said, "The city needs to quit using legal road blocks and delay tactics when it is clear the city made serious misrepresentations to the citizens of Austin. ... The mayor and members of the City Council need to take responsibility and correct the situation now." (Mike Martinez said this week that council could direct the city manager to try to amicably settle the lawsuit, possibly at its Sept. 27 session.) Clark said elected officials and city staff will have immunity, even if fraud is found. But if the lawsuit does expose violations of Open Meetings Act ... well, it won't be pretty.

Futrell recently responded to the Chronicle by e-mail regarding the allegations. "The plain English rewrite of the Land Development Code you reference was part of the 1999 Council Subcommittee on Smart Growth," she explained. She took care to spread responsibility for the rewrite process: "The Council Subcommittee was led by Mayor Watson and three other council members and included a task force of some 18 community stakeholders appointed by the Council Subcommittee to equally represent neighborhoods, environmentalists and developers."

Futrell also distanced herself from the rewrite, calling it "a non-substantive language clarification, clean up and reorganization of the Land Development Code" that was "spearheaded by the Law Department." Not my department? Yet as assistant city manager over development, Futrell was entrusted with oversight of the code. And the Reinmund memo described a process in which the city manager, not council, was steering the rewrite boat.

Alert and Aware

However the lawsuit evolves, already has stirred the civic waters to good effect. In addition to the height limits, its lawsuit cited another developer-friendly code change: Stripping citizens of the right to appeal WO variances to council. Developers, meanwhile, kept their council appeal rights. (Futrell says citizens always retained the right to a council appeal for an overall site-plan approval, when it entails WO variances.) In May, the city drafted a new ordinance specifically (re)es­tab­lishing the right of a registered interested party to appeal WO variances to council.

Most importantly, council and the whole community is now on high alert. There's talk of strengthening design guidelines and environmental protections for the Town Lake Corridor. Martinez, Lee Leffingwell, and other council members have warned that they oppose WO variances. "I'm not going to support any individual variance requests as it relates to the setback," said Martinez recently. "In principle, I've made a decision." He said he and his colleagues may decide it's now timely to review and tighten the "wonderful" Waterfront Overlay Ordinance, but only "as a comprehensive policy decision. It must be holistic."

For this reinvigorated passion for protecting natural open space on Lady Bird Lake, Austin owes a debt of gratitude not just to watchdog neighborhood associations and but also, perversely, to CWS Capital Part­ners and its agent, Richard Suttle. Had the site plans that CWS filed for its 17-story shoreline condo towers not presumed such greedy setback variances, been so outrageously out of scale, and been so blatantly disrespectful of WO values, never would have formed. Few things galvanize this town as powerfully as a developer in a black hat.

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