Looking Back on the Champions Tract Rezoning

Does this development belong in this particular corner of the Hill Country?

Champions Tract 3 nestles into the corner of FM 2222 and City Park Road.

Champions Tract 3, a slim triangle of undeveloped land along FM 2222 in what still looks like relatively unspoiled Texas Hill Country, may soon have a new landmark. Rezoning and special exceptions that the Austin City Council granted last Novem­ber would allow a five-story, 325-unit apartment complex to be built there, just before the turnoff onto City Park Road. But the proposed construction‚ which faced strenuous objection by area residents, now approaches another hurdle: A lawsuit filed June 5 alleges a lack of governmental transparency – or more specifically, a failure to comply with the Texas Open Meetings Act – and adds to locals' long-held list of grievances with the development, including unmanaged traffic, risks to water quality, environmental degradation, and a general disregard for relevant rules and processes.

Residents of Glenlake, Shepherd Moun­tain, Two Coves, and other neighborhoods around the 45-acre tract pleaded their case to Council and city commissioners over the previous calendar year – and in a run-off election in December (after losing at Coun­cil), took their dissatisfaction to the polls. Now, four of the strongest opponents of the project, as Lake Austin Collective Inc., have sued the city in a Travis County district court. Their suit, filed by local attorney Bill Aleshire, demands that Council's Champions vote be voided – and if reposted, that the city properly describe the environmental waivers and other exceptions this rezoning vote would cover.

Whether this development belongs here, in this particular corner of the Hill Country, has proven a thorny question.

The lawsuit, similar to one Aleshire filed (and won) last year over improperly posted Council Items concerning the Pilot Knob project, is the latest in a series of chess moves complicating efforts to develop the tract. Residents in these affluent neighborhoods say they know development there is inevitable. Some welcome the idea, saying the area needs more services and amenities close to their suburban homes. And they recognize that Austin's growth calls for more housing. But whether this development belongs here, in this particular corner of the Hill Country, has proven a thornier question.

The history of Tract 3 and the other Champion sister properties dates back to the Seventies. But for many of the residents who became involved in the current wrangle over its fate, the story began early last year, when information began to filter through neighborhood associations that a new development was in the works for the tree-covered tract, a confirmed habitat for endangered golden-cheeked warblers. Thousands of single-family homes and condominiums lie on the other side of the tract, many clustered along City Park Road, where residential and park visitor traffic has already become an issue.

Some, like Shepherd Mountain resident Marisa Lipscher and longtime development watchdog Carol Lee, had been following earlier failed efforts to develop the tract. But others, like Linda Bailey, a Glenlake resident who became a key spokesperson for traffic safety, said she'd never paid much attention to such issues. She and others are aware now: "We're concerned, we're interested, and we're here for the long term." (Lipscher, Bailey, Lee, and Susan Kimbrough would later spearhead the lawsuit as Lake Austin Collective Inc.)

For those new to the matter, there was a definite learning curve. Aside from the daunting technicality of a regular zoning and development case, Champions was complicated by the fact that the land use was already governed by a settlement agreement reached in 1996 between the city and the Champion sisters (surviving daughters of the family that once owned more than 250 acres of land in the area now divided by FM 2222 and Highway 360). That agreement superseded rules and ordinances that would have otherwise applied to the land. The tract had already been the subject of several lawsuits. Most recently, the Champions had entered into a contract to sell the tract, and authorized the prospective buyer, local developer Joe Lamy, through his attorney, Richard Suttle, to request and handle rezoning.

Distrust in the Process

Lamy wanted zoning that would allow for the construction of residential units, and to increase the "trip cap" limiting traffic. The tract lies along an area regulated by the Hill Country Roadway Ordinance, which restricts certain types of building. He submitted a rezoning request to the city in December 2015, which quickly attracted attention: At least a dozen residents turned out to voice concerns to the Zoning and Platting Com­mission last May, when the rezoning case was first heard. There, too, was Suttle, the well-known land use attorney, who represented Lamy and was authorized to act as an agent for the Champions. Suttle proved a sharp needle and resilient thread who kept the deal moving, weaving deftly through and around the obstacles residents mustered, and delivering the project in a display of expertise in navigating city processes.

Traffic safety was front and center then, with public concern ranging from daily congestion and hazardous driving conditions (blind curves, steep slopes) to a potentially bottlenecked evacuation in the event of wildfire. Speakers were appalled by the idea that additional traffic would be approved for an already hazardous and congested area, without assurances that safety concerns would somehow be addressed. City engineer Scott James acknowledged flaws in the traffic impact analysis supporting the rezoning request, whose scope was set in 2014. But he nevertheless stood by the determinations that adding 2,100 daily trips to the area would not be problematic. Commissioner Betsy Greenberg voiced discomfort with increasing trips without more complete and current traffic analysis data, but other opinions prevailed, likely thanks to concessions Suttle made, such as committing his client to spending $5,000 on signal timing improvements.

Lake Austin Collective Inc. (l-r): Marisa Lipscher, Linda Bailey, Carol Lee, Susan Kimbrough (photo by Jana Birchum)

Commissioners voted 7-3 to recommend raising the trip limit, along with the other conditions requested by the applicant and supported by city staff. While several commissioners seemed skeptical that residents' traffic fears should slow the project, Susan Harris, an appointee of the district's council member at the time, Sheri Gallo, was especially pointed in her dismissal: "I don't believe you can burden 325 units with a solution to a citywide traffic issue generated by yourselves and others, myself included." She called the traffic impact "negligible."

But even Harris took comfort in knowing the commission would again review the project "at site plan," which Suttle had reassured commissioners would happen. In the end, additional commission-level review was bypassed as part of the agreement approved by Council – one of many procedural upsets that intensified distrust in the process for those who opposed the project.

Postponements and Petitions

A lot happened between the May hearing and City Council's approval of the rezoned tract in early November, much of it outside of the public forum. Council approved the case on first reading on June 23 and on second reading that September, despite continued opposition. In letters and before Coun­cil, residents cited traffic safety, but also a potential degradation to the Bull Creek Watershed, on which the tract sits, and a potential desecration of the Hill Country Roadway Ordinance. Brad Rock­well, an attorney hired by several residents, told Council that the city was already at fault with respect to protecting the endangered warbler habitat. "The city of Austin is making permitting decisions that are destructive to habitat and not even following their own obligations under the Fish and Wildlife permit," he later explained.

Even residents who didn't want the deal blocked didn't necessarily like it. Carol Torgrimson, a Long Canyon resident, told Council on Sept. 22 that the proposed agreement was "the best bad deal we could come up with," and urged members to move forward. It's an "opportunity to do something positive with that site which has the least probable negative impact of anything else we could do there," she said.

Council decisions were postponed at least five times, usually at the request of members or staff. At least some of the delays were specifically granted to give Suttle and staff more time for deliberations to craft a deal that both the city and developer could support.

What is less clear is how area residents were faring, despite statements made by both Suttle and CM Gallo that they were working hard to address those residents' concerns. For instance, Gallo requested that the public comment period be kept open to allow concerned residents to continue reacting to developments on the case; she also asked staff to respond to a written list of neighborhood concerns. And on the night of the final vote, Suttle told Council, "I'll say it again. I've never worked so hard for such a small apartment project on 45 acres."

Carol Lee, one of the deal's harshest critics, told the Chronicle via email that there were "many, many meetings with various combinations of attendees: Joe Lamy, Richard Suttle, Kimley Horn engineers, Council staff, city staff, and residents." But those meetings, she said, "wasted a tremendous amount of time." The "real negotiation" went on behind a "dark curtain."

Meanwhile, Gallo publicly voiced her hopes that the parties would resolve their differences, seeming to take on the role of facilitator rather than advocate for the issues her constituents raised. "I want to say that unless we can get to a resolution that addresses the additional concerns that the neighborhoods have, that we will look very closely at voting for this on a final third reading," she declared at that late September meeting.

Against this backdrop, the pending contract drove the agenda. In one instance, Mayor Steve Adler questioned the wisdom of rescheduling a meeting because it would coincide with discussion of another high-profile development project, to which Plan­ning and Zoning staffer Jerry Rust­hoven replied: "I believe we have to, because Mr. Suttle has a deadline with regard to a contract." Suttle added that the Sept. 22 deadline was "imperative" to his client. Yet at the same meeting, he admitted, "I didn't get my legal work done and your law department didn't quite get theirs done," while discussing reasons for the delay.

Alison Alter (photo by John Anderson)

The legal work referred to revisions to the original settlement agreement now being negotiated privately, in addition to the rezoning request. The postponement, however, was recorded as a request by staff, not Suttle – a detail that may have significantly affected the final outcome.

By Nov. 3, when the project's final vote was scheduled, tensions were running high. That morning, neighbors had submitted a petition to the city opposing the rezoning. It was signed by nearly 40% of those who lived directly along the boundary of the area to be rezoned. The petition, if validated, would mean that the rezoning would need the support of at least nine council members. Dozens of area residents had come to testify before Council, or had donated their time to other speakers.

Then came Suttle's request for postponement. Adler appeared hesitant, but deferred to a staff recommendation that it was "Council's custom" to grant a first official request. With the final vote deferred one week, neighborhood advocates still opted to provide more than an hour of public comment, while others saved their time for the day of the final vote. Speakers once more outlined how the development would cause traffic fatalities, hurt the environment, and endanger the water supply – while providing little benefit for Austinites in return.

Jim Duncan, a former city land development services director and nationally renowned urban planner, as well as affected resident, condemned the plan, calling it a "total violation of Imagine Austin" and "a decimation of the two key ordinances which regulate the Hill Country" – the Hill Country Roadway Ordinance and Lake Austin Water­shed Ordinance, both of which limit specific types of construction or development to protect the natural features and water sources. Jim Rumbo, president of the West­minster Glen Homeowners Associ­a­tion, lamented a broken process in which the city deprived residents of due process and circumvented its own rules. "Are you so set on the development that you can't hear what's being said?" he asked.

Things moved quickly that next week. Staff notified the applicant that a petition had been submitted – standard procedure, Rusthoven attests. By the following Tues­day, Suttle's law firm, Armbrust & Brown, had emailed newly prepared survey documents and a request for a new boundary on the rezoning case to city staff. A request went out for an expedited revised map that would be ready for the Nov. 10 Council meeting, where Rusthoven announced that the petition, validated the day before, had been invalidated – no residents now lived within 200 feet of the proposed rezoning.

Residents there were shocked and angry. Mayor Pro Tem Kathie Tovo commented on their surprise, and briefly questioned the development, asking Rusthoven whether more time would give the residents additional recourse. They had none, Rusthoven told her, and the proceedings continued on.

Jim Duncan later told the Chronicle he believed the city could and should have asked the developer to restart his application in response to the boundary change. Rusthoven disagreed: Applicants can request changes throughout the process, he explained. Only an increase in the boundaries or a request to increase intensity would trigger a need to restart the process.

A Good Deal for the City?

That the Champions Tract 3 project was approved can, in part, be attributed to the persistence of Richard Suttle. But its success also stands as testament to the efforts of city staff, who see their job as a balancing act between honoring the rights of property owners and enforcing rules meant to protect broader public interests. Enter Chuck Lesniak, the city's environmental officer and a primary counterforce brought to bear on making the development project acceptable, at least in terms of environmental considerations.

No one disputes that watershed and other protective ordinances will be violated, sometimes grossly, in the deal the city struck for Champions Tract 3. (For instance, the developer will be allowed to "cut and fill" significantly more of the hillside and to build a much taller structure than would normally be permitted.) But Lesniak was convinced that the owner's original entitlements made development inevitable, and that he was able to get something valuable for the city in return for the exceptions he offered. Chief among these gains was the protection and preservation of a large portion of the tract.

Sheri Gallo (photo by John Anderson)

Neighbors asked how approving this five-story, 300,000-square-foot building, to be "shoehorned" into the side of the hill so close to a watershed, could possibly be environmentally superior to the modest 30,000-square-foot office building they believed the existing (non-rezoned) agreement would have allowed. Some argued that the eastern half was no gift and would never have been developed anyway, due to the steep slopes and deep gorge separating the two sides of the tract. They struggled to understand how the city could willingly agree to violate so many of its own values and rules, and were outraged that it seemed more interested in making the deal work for the Champions, who wanted to sell their land, and for the potential buyer, who wanted assurances about what he could build if he bought it, than for those already living in the area.

But to Lesniak, the entitlements given to the Champions in their earlier settlement with the city would have allowed for more dispersed development across the tract and would ultimately create more environmental disturbance. He felt the city was well-served by the deal environmentally. "The development that got approved has significantly less potential to impact Bull Creek negatively than what might have been built under the entitlements that they had," he told the Chronicle. Lesniak also felt some sense of urgency was justified in bringing the deal to closure with this particular developer, who was willing to agree to the preserve, describing it as a "bird in the hand" that would bring some certainty regarding protections to the land.

Suttle was persuasive, too. In what he called an effort to "bolster" the project's compliance with the city's comprehensive plan and Imagine Austin, the attorney interjected affordable housing into the mix moments before the final vote: 10% of the units would be made available for 40 years to those making 80% MFI (median family income), Suttle offered, if Council approved the item that night. A restrictive covenant detailing this requirement was later filed with Travis County.

That same night, traffic safety, by far the deepest source of public opposition to the proposed development, got reduced to concerns over a driveway. City staff gave reassurances that the development as proposed would be safe. Suttle told CM Leslie Pool, who was clearly concerned: "If you were to vote for this tonight, you are not saying anything about the driveway. The driveway comes at the site plan phase. We have to prove it's safe. We have to prove it's necessary." The measure passed moments later, with CMs Pool, Gallo, Ora Houston, and Ann Kitchen opposed.

The property's deed changed hands on Nov. 30, according to Travis Central Apprais­al District records. It was deeded not to Joe Lamy, but rather to 2222 Cap Texas LLC, an entity created to own the property, which will be developed and managed by Slate Real Estate Partners of Houston, according to J. Mark Stevenson, founding principal of the Houston-based firm. Stevenson told the Chronicle that Lamy's role was to assist in getting the rezoning accomplished and that Slate had always been the intended developer. Stevenson was aware of the environmental, traffic, and affordable housing issues raised during the rezoning process, but said, "We were not the entity that went through the zoning process," when asked what he thought of the handling of the neighborhood petition and redrawing of tract boundaries. Adding that the firm is "very proud" of the way the development will fit into the neighborhood, Stevenson said, "We never have a closed door," and that the firm would continue welcoming input.

County records also indicate that the tract, valued at $425,000 for the previous three years, is now valued at $1.7 million. Stev­enson declined to disclose the purchase price. Lamy did not respond to requests for comment on this story.

No Second Chances

Champions Tract 3 sits in District 10, the district Council Member Alison Alter won handily in December's run-off, although she trailed Gallo in November's general election. Her upset was largely attributed to intensifying opposition over North Central/Northwest developments like the Grove at Shoal Creek and Austin Oaks, and the feeling that Gallo, a real estate agent, was too close to developers.

But voters in and around Champions Tract 3 also played a part. In fact, while voters in the three precincts immediately adjacent to the tract had given Gallo 7% of her general election votes, the same areas gave Alter 9% of her total winning votes in the run-off, an impressive 1,307 given the sparse population and low turnout during the run-off. Marisa Lipscher's Nov. 3 statement to Council foreshadowed the upset: "We want to make sure you all understand very well today that we are not happy constituents. We are deeply, deeply unhappy. We do not feel represented at all. And we ask that you please listen to everyone today carefully and to all of these arguments. And to deny this rezoning."

Alter told the Chronicle she would have asked more questions had she been on the dais the night of the final vote, mostly about the environmental impact of the variances and the process by which the petition was invalidated. "It's just wrong that you can come up at the very last minute and change the boundaries of the zoning case and invalidate the petition without any time for the public to react," she said. "It is a clear manipulation of the process." Alter also had concerns about the way traffic safety was handled, a huge issue for the neighborhood and one she said points to a hole in the process: "Our mechanisms for evaluating the zoning cases don't allow us to factor in safety before somebody dies." She raised hope that CodeNEXT will help address some of those problems and calm the distrust many residents have in how city processes treat residents. Sheri Gallo did not respond to requests for comment.

Legal Limbo?

It remains to be seen how the court will respond to the Aleshire lawsuit, and if the original vote were voided, what a new vote would bring. Aleshire told the Chronicle he expects motions for summary judgment on the case by August or September.

If the Pilot Knob decision is any guide, the group may at least get another vote. In that case, Judge Stephen Yelenosky found that the city had not properly notified the public regarding a Council action that included waiving of development and water impact fees amounting to an estimated $50 to $80 million for the Pilot Knob PUD. Yelenosky's ruling voided Council's vote. In a letter explaining his decision, the judge said, "Matters of special interest require special notice because no individual can attend every meeting of every public body. Members of the public must make choices in their public and personal lives, and the purpose of notice is to enable them to do so intelligently."

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Champions Tract 3, Bill Aleshire, Champions Tract, Richard Suttle, Joe Lamy, Alison Alter, Sheri Gallo, CodeNEXT

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