Sunday, August 24, 2008

'Poster child' of Austin's desired development zone along Texas 130 toll road corridor falls apart

Austin-backed Texas 130 development mired in money woes

Bankruptcy proceedings, ownership changes probably will delay development of 1,700 acre Wildhorse Ranch.

August 24, 2008

By Kate Miller Morton
Austin American-Statesman
Copyright 2008

The Texas 130 toll road was supposed to spur the development of thousands of homes and millions of square feet of commercial space in the long-planned, 1,700-acre Wildhorse Ranch project near Lake Walter E. Long.

But more than a year after the massive roadway opened, nothing has been built, and a portion of the high-profile property is entangled in complicated bankruptcy proceedings. At least 715 acres of Wildhorse are now being sold through the proceedings. Dallas development group PegasusAblon Properties recently put 300 acres under contract, but a spokesperson for the group said it did not yet have any plans for the property.

Austin has a vested interest in the project. The city agreed to reimburse developers up to $30 million for water and wastewater improvements in hopes that it would spur more development along the Texas 130 corridor.

City officials say those agreements, along with zoning that allows nearly 5,900 homes and 5.4 million square feet of retail and office space to be built, will remain in place regardless of who owns it.

Austin's Wildhorse reimbursement agreement was the largest such deal the city has ever signed. It was done through the Austin Water Utility and isn't tied to land use, according to the utility's assistant director, David Juarez.

Juarez said the deal was intended to help the city get much needed water and wastewater capacity to the area around Texas 130 faster and cheaper than it otherwise could because the developers will front the money to build the facilities and pay for the engineering work.

A major wastewater facility has already been built at Wildhorse by the project's original developers, and so far they have been reimbursed about $3 million.

The property's current zoning allows some flexibility about what and how much is built where, but any major change would require city approval.

Pete Dwyer, one of the project's original developers, said even if major changes aren't made, it will still be more difficult to create a cohesive, mixed-use, master-planned community with multiple owners.

"If it gets busted up, then you run the risk that the sum of the pieces will not add up to what the whole was intended to be," he said.

Wildhorse was intended to be "the poster child" of Austin's desired development zone, according to Dwyer.

Thousands of houses, townhouses and apartments at various prices were planned next to workplaces and stores and surrounded by trails, parks and public amenities not usually found in the low-cost subdivisions previously built in the area.

The project matched the goals of Austin leaders who thought high-density, mixed-use developments generated much more in tax revenue than they consume in services, accommodated more of the city's growing population on less land and generated less traffic than traditional suburban subdivisions.

Last year, Dwyer and his partners sold the property to an eclectic group of investors that included Brooklyn, N.Y., condominium developer Vitaly Zaretsky and former Manor Mayor Jeff Turner.

The new group said it planned to ask the city to increase the entitlements to as much as 7,000 houses and 7 million square feet.

The group divided the land among at least five different ownership entities as it sought to finance the aggressive build-out, but they ran out of money before the first building was ever built.

It is unclear what happened.

Zaretsky couldn't be reached for comment.

Turner said he was not involved in the day-to-day work and hasn't been in contact with the other owners in five months.

"I don't know what happened or why it fell apart," Turner said.; 445-3641

© 2008 Austin

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