harper-park-two-lp-v-city-of-austin-texas-greg-guernsey-solely-in-his ( 2011 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-10-00506-CV
Harper Park Two, LP, Appellant
v.
City of Austin, Texas; Greg Guernsey, Solely in his Capacity as Director of the Watershed
Development Protection and Development and Review Department of the City of Austin,
Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
NO. D-1-GN-09-003295, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING
OPINION
Under chapter 245 of the local government code, once an application for the
first permit required to complete a property-development “project” is filed with the municipality or
other agency that regulates such use of the property, the agency’s regulations applicable to the
“project” are effectively “frozen” in their then-current state and the agency is prohibited from
enforcing subsequent regulatory changes to further restrict the property’s use. See Tex. Loc. Gov’t
Code Ann. §§ 245.001-.007 (West 2005); Shumaker Enters., Inc. v. City of Austin, 325 S.W.3d 812,
814-15 & n.5 (Tex App.—Austin 2010, no pet.). However, these vested-rights protections are, in
effect, lost or forfeited to the extent that the development being pursued constitutes a new or
different “project” from the one for which the initial permit was sought. See City of San Antonio
v. En Seguido, Ltd., 227 S.W.3d 237, 242-43 (Tex. App.—San Antonio 2007, no pet.). This appeal
presents questions concerning how one identifies the relevant “project” to which vested rights attach
under chapter 245. We address these questions in the context of a dispute between a property owner,
appellant Harper Park Two, and the City of Austin (City), appellee, over whether the identification
of a single lot as “office” use in an application for a preliminary plan for a larger mixed-use
commercial development project—a label that the parties agree would not have bound the owner to
“office” use at the time—established that the relevant “project” with respect to that individual lot
was limited to construction of an office building and did not extend to construction of a hotel. The
district court rendered judgment declaring that chapter 245’s vested-rights protections would apply
only to development of the lot for office use and that any other type of commercial development
must comply with the City’s current—and more restrictive—land-use regulations. We disagree,
and will reverse.
BACKGROUND
Regulatory backdrop
As a general rule, “the right to develop property is subject to intervening regulations
or regulatory changes.” Quick v. City of Austin, 7 S.W.3d 109, 128 (Tex. 1999) (op. on reh’g).
However, “the Texas Legislature [has] significantly altered this rule by requiring that each permit
in a series required for a development project be subject to only the regulations in effect at the
time of the application for the project’s first permit, and not any intervening regulations.” Id. At
times relevant to this appeal, chapter 245 of the local government code has provided:
(a) Each regulatory agency shall consider the approval, disapproval, or
conditional approval of an application for a permit solely on the basis of any
orders, regulations, ordinances, rules, expiration dates, or other properly
adopted requirements in effect at the time the original application for the
permit is filed.
2
(b) If a series of permits is required for a project, the orders, regulations,
ordinances, rules, expiration dates, or other properly adopted requirements in
effect at the time the original application for the first permit in that series is
filed shall be the sole basis for consideration of all subsequent permits
required for the completion of the project. All permits required for the
project are considered to be a single series of permits. Preliminary plans and
related subdivision plats, site plans, and all other development permits for
land covered by the preliminary plans or subdivision plats are considered
collectively to be one series of permits for a project.
See Act of May 11, 1999, 76th Leg., R.S., ch. 73, § 2, 1999 Tex. Gen. Laws 432, codified as
amended, Tex. Loc. Gov’t Code Ann. § 245.002(a)-(b).1 The effect of these requirements, as
previously noted, is to “freeze” most of the regulatory authority’s land-use regulations as they existed
at the time the first permit application is filed through completion of the “project.” See Shumaker
Enters., Inc., 325 S.W.3d at 814-15 & n.5.2 On the other hand, if there are subsequent regulatory
changes that “enhance or protect the project,” chapter 245 entitles a permit holder to “take
1
Amendments in 2005 added language elaborating that vested rights are triggered by the
filing of a permit application “for review for any purpose, including review for administrative
completeness” or a “plan for development of real property or plat application” that “gives the
regulatory agency fair notice of the project and the nature of the permit sought,” and further
providing that an application or plan is considered filed on the date sent by certified mail. See Act of
Sept. 1, 2005, 79th Leg., R.S., ch. 6, § 2, 2005 Tex. Gen. Laws 5-6, codified at Tex. Loc. Gov’t Code
Ann. § 245.002(a), (a-1) (West 2005). Both parties cite the current version of the statute and neither
party suggests on appeal that the 2005 amendments would have any substantive impact on
our analysis. On the other hand, in the district court, the City, responding to Harper Park Two’s
arguments that the initial permit application gave the City “fair notice” of a “project” that could
include a hotel, emphasized that “the fair notice provision didn’t apply until 2005,” suggesting a
view that the amendment, if anything, would have inured to Harper Park Two’s benefit. However,
the amended language, strictly speaking, is not before us. See id. § 245.002(g) (West 2005)
(specifying that 2005 amendments to section 245.002, subsection (a), and addition of subsection (a-
1) “apply only to a project commenced on or after the effective date” of those amendments).
2
Certain types of regulations, none of which are at issue here, are exempted from
chapter 245’s limitations. See id. § 245.004 (West 2005).
3
advantage” of the changes “without forfeiting any rights under this chapter.” Tex. Loc. Gov’t
Code Ann. § 245.002(d). These vested rights, furthermore, attach to the “project,” not to a
particular property owner or permit holder and, as such, “follow” any conveyances or transfers of
rights related to the project. See En Seguido, Ltd., 227 S.W.3d at 242-43 (citing Op. Tex. Att’y Gen.
No. JC-0425 (2001)) (explaining that rights vest in a project, and are not affected by transfer of
ownership). But the applicability of these protections, again, assumes that the same “project” is
being pursued. See id.3
The obvious intent of chapter 245 is to prohibit land-use regulators from changing
the rules governing development projects “in the middle of the game,” thereby insulating already-
underway development and related investment from the vicissitudes and uncertainties of regulatory
decision making and all that may influence it. That intent is further confirmed by the Legislature’s
explicit findings regarding chapter 245’s purpose: to combat “administrative and legislative
practices that often result in unnecessary governmental regulatory uncertainty that inhibits the
economic development of the state[,] increases the costs of housing and other forms of land
development[,] and often resulted in the repeal of previously issued permits causing decreased
property and related values, bankruptcies, and failed projects.” See Act of May 11, 1999, 76th Leg.,
R.S., ch. 73, § 1(b), 1999 Tex. Gen. Laws 432; see also Quick, 7 S.W.3d at 128 (purpose of
chapter 245’s statutory predecessor, former chapter 481 of the government code, was to “establish
requirements relating to the processing and issuance of permits and approvals by governmental
regulatory agencies in order to alleviate bureaucratic obstacles to economic development”).
3
Vested rights attaching to a “project” may also be lost if a “project” is deemed “dormant.”
See id. § 245.005 (West 2005). That provision is not at issue here.
4
Moreover, as an incidental matter of historical fact, the legislative record reflects that bill proponents
advocated chapter 245 as an appropriate response to instances when the City of Austin had
purportedly imposed new regulatory restrictions retroactively on development projects that were
already underway, causing project failures, bankruptcies, and regulatory uncertainty for developers
and landowners.4
The initial permit application
On July 30, 1985, the predecessor-in-title to Harper Park Two filed with the City an
application for a preliminary plan—an initial step in platting a subdivision—for a subdivision of
roughly 98 acres to be known as Harper Park. The property is located along U.S. Highway 290, and
is situated to the west of what were then the City’s municipal boundaries. However, because the
property came within the City’s extraterritorial jurisdiction, it was subject to the City’s limited
authority to regulate platting and subdivision of land,5 in particular a pair of City ordinances
governing subdivisions built in the Barton Creek Watershed, the area where Harper Park would be
located. Simply described, these ordinances (the “Barton Creek Watershed ordinances”) imposed
certain limitations on the location and density6 of two categories of “development”7 over the
4
See House Research Organization, Bill Analysis, Tex. H.B. 1704, 3-4, 76th Leg.,
R.S. (2005).
5
See Tex. Loc. Gov’t Code Ann. § 212.002 (West 2008).
6
Including impervious cover restrictions.
7
Defined as including “buildings and other structures; construction; and excavation,
dredging, grading, filling, and clearing or removing vegetation.” Austin, Tex., City Code ch. 41A,
art. I, § 41A-101.4(b) (1981); Austin, Tex., City Code ch. 9-10, art. V, § 9-10-305(b) (1982).
5
watershed: (1) single and two-family residential housing units, and (2) “commercial” development,
which included “all development other than one or two-family residential housing structures.”
Austin, Tex., City Code ch. 41A, art. I, § 41A-101.4(b) (1981); Austin, Tex., City Code ch. 9-10,
art. V, § 9-10-305(b) (1982).
The preliminary plan application proposed that Harper Park would be a mixed-use
development of “Condo, Office, Commercial,” and illustrated a configuration of thirteen lots
with roads and other infrastructure. There were no metes and bounds descriptions. Each of the lots
illustrated on the plan was labeled with a use that included “retail,” “multi-family,” “athletic club,”
and “office.” One of these lots, approximately six acres in size and labeled “office,” is at the center
of the present dispute.
There is no dispute that the labels on the preliminary plan application were not
mandatory and were not binding on the property owner at the time. Under the City’s applicable land-
use regulations at the time, which consisted solely of the Barton Creek Watershed ordinances, the
labels merely identified “commercial” development that would be subject to the ordinances’
corresponding location and density limitations. As the City concedes, it had no further power to
control use of the land, as its zoning authority did not extend beyond its municipal boundaries. For
example—and significantly for this case—the City acknowledges that as long as the watershed
ordinances were complied with, it could not have prevented construction of a hotel on the six-acre
lot instead of an office building.
There is likewise no dispute that the filing of the Harper Park preliminary plan
application, from the standpoint of these proceedings, invoked the vested-rights protections
6
of local government code chapter 245 with respect to the “project.”8 Consequently, the City was
required to apply only its “orders, regulations, ordinances, rules . . . or other properly adopted
requirements” that were in effect at the time the Harper Park preliminary plan application was
filed—i.e., only the Barton Creek Watershed ordinances—as “the sole basis for consideration of all
subsequent permits required for the completion of the project.” Act of May 11, 1999, 76th Leg.,
R.S., ch. 73, § 2, 1999 Tex. Gen. Laws 432; see Tex. Loc. Gov’t Code Ann. § 245.002(a), (b).
Subsequent events
The City approved the Harper Park preliminary plan in November 1985. Later that
same year, the City annexed the subdivision, thereby gaining zoning authority over it. The owner
requested zoning in 1986. As conditions of the requested zoning, the City insisted that the owner
agree to restrictive covenants imposing height limits and building-material restrictions, as well as
dedicate streets to public use. Due to financial difficulties encountered by the original owner, the
zoning was ultimately not approved until 1992.9 The zoning ordinance identified the lots by metes
8
See Tex. Loc. Gov’t Code Ann. §§ 245.001(1) (defining “permit” as “a license, certificate,
approval, registration, consent, permit, . . . or other form of authorization required by law, rule,
regulation, order, or ordinance that a person must obtain to perform an action or initiate, continue,
or complete a project for which the permit is sought”), (4) (“regulatory agency” is “the governing
body of, or a bureau, department, division, board, commission, or other agency of, a political
subdivision acting in its capacity of processing, approving, or issuing a permit”), .003 (chapter
applies to “project” in which a “permit” application had been filed or a permit issued before
September 1, 1997, and was still in progress as of that date) (West 2005).
9
The Austin City Council adopted first-reading zoning ordinance approval for the property
in 1986. However, the owner, who had taken bankruptcy in late 1980, could not execute the
restrictive covenants and street deeds on which the City had conditioned its zoning approval. As a
result, it was not until 1992, when a subsequent owner—a bank—executed the covenants, that the
ordinance received its third and final reading, at which point the zoning requested in 1986 was
approved by adoption of zoning ordinance 920123-E.
7
and bounds descriptions and zoned some lots “General Office,” some “Limited Office,” some
“Community Commercial,” and others “Multifamily Residence” and “Townhouse and Condominium
Residence.” The six-acre lot at issue was zoned “GR-CO”—“Community Commercial,” with a
conditional overlay. While this zoning permitted construction of an office building on the lot, it did
not limit the lot’s use to an office, either, and it is undisputed that permissible commercial uses under
this zoning included building a hotel.
In the mid-1990s, the then-owner of the Harper Park subdivision submitted a revised
preliminary plan that proposed to use a large portion of the property as a private school campus.
Other portions of the preliminary plan—including the six-acre lot labeled “office”—were unchanged.
Ultimately, the owner filed and obtained approval for a final plat for “Harper Park Section One,”
which encompassed 74 of the 98 acres of the original property. On this portion of the original
preliminary plan had been nine lots with indicated uses that included retail, two lots labeled “office,”
a lot labeled “athletic club,” and two lots labeled “multi-family.” The final plat replaced this lot
configuration (and the only lots in the entire development that had been labeled “retail” or “multi-
family”) with two larger lots used solely as a private school campus—that of the St. Andrews
Episcopal “upper school”—and eliminated several roads.
By the time of these filings and approvals, the statutory predecessor to chapter 245
had taken effect. In connection with the filings, the owner requested a determination from the City
(termed an “HB 1704” determination, after the statute’s bill number) as to whether the proposed
changes were within the scope of the Harper Park “project” so as to retain vested-rights protections
and be subject to review under the City’s land-use regulations in effect when the original preliminary
8
plan application was filed, June 30, 1985. The City issued a determination that the property would
remain protected.
The present dispute
Four lots, including the six-acre tract at issue here, were not part of Harper Park
Section One; they remained an unfinished part of the project. In 2007, appellant Harper Park Two
applied for a final plat of the six-acre lot, which it called “Harper Park Section Two.” The
application described the use of the property as “Commercial-Retail.” Harper Park Two also
requested a vested-rights determination that its final plat application would, pursuant to chapter 245,
be reviewed under the City’s land-use regulations in effect on July 30, 1985. The City rejected the
application, asserting that the label “office” on this area of the 1985 preliminary plan precluded
retail uses. In order to get the final plat approved while maintaining the right to develop the property
under the 1985 regulations, Harper Park Two revised its application to eliminate the reference
to “retail” use, instead specifying “Commercial-Office.” As both parties acknowledge, the terms
“Commercial-Retail” and “Commercial-Office” do not appear anywhere in the City Code and are
merely shorthand descriptions of intended land uses. Harper Park Two also emphasizes that the label
“office” was not included on the final plat, and that plat note 14 specifies that the property shall be
developed in accordance with the Barton Creek Watershed ordinances—which, as previously noted,
define commercial development to include all development other than one- and two-family
homes—“or such other water quality ordinance as may be agreed upon between the owner and
the City at time of site plan approval.” See Austin, Tex., City Code ch. 41A, art. I, § 41A-101.4(b)
9
(1981); Austin, Tex., City Code ch. 9-10, art. V, § 9-10-305(b) (1982). The City approved the final
plat for Section Two in December 2007.
In October 2009, Harper Park Two submitted a site plan application to build a hotel
on Section Two. Harper Park Two sought to have the site plan reviewed under the regulations in
effect as of June 30, 1985. However, the City asserted that a hotel was a different “project” from the
one initiated by the 1985 preliminary plan application and that only an office could be developed on
Section Two under the 1985 regulations. If Harper Park Two desired to construct a hotel on the lot,
the City maintained, the development would have to comply with the City’s current land-use
regulations, which are more restrictive than those in effect in 1985.10
Harper Park Two sued the City and its Director of Planning and Development Review
Department, in his official capacity, seeking a declaratory judgment that it “is entitled to develop
[Section Two] as a hotel or any other commercial or office use” consistent with the rules,
regulations, ordinances, and requirements in effect on July 30, 1985.11 It also sought attorney’s fees
as permitted by the Uniform Declaratory Judgments Act.12 Following a bench trial, the district court
rendered judgment declaring “that Plaintiff’s proposed hotel project is a change in project under
Chapter 245 . . . and, therefore, is not entitled to be developed pursuant to the regulations in effect
10
Harper Park insists that imposition of the current regulations—particularly, the current
impervious cover limitations—would effectively preclude any commercial development of the six-
acre lot, given the relatively small dimensions of the property.
11
Chapter 245 waives a political subdivision’s governmental immunity from suit to the
extent of a suit for declaratory, injunctive, or mandamus relief to enforce the statute’s protections.
See Tex. Loc. Gov’t Code Ann. § 245.006 (West 2005).
12
See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2008).
10
on July 30, 1985,” and “that Plaintiff is not entitled to develop its property as a hotel, or for any
commercial development, pursuant to the rules, regulations, ordinances, and requirements in effect
on July 30, 1985, save and except for office.” The court further rendered judgment that Harper Park
Two take nothing on its claims. It subsequently entered findings of fact and conclusions of law. The
findings included, “[t]he project on July 30, 1985, was an office,” and “[a] hotel is not the same
project as an office.”
Following trial, Harper Park Two moved for new trial or to reopen the evidence
based on the allegation that it had since uncovered a City document that had been responsive to its
discovery requests but that the City had failed to produce. The document was a 1995 memorandum
from the City’s then-director of planning and development, titled “SB 1704 Guidelines,” consisting
of instructions to City staff concerning their implementation of chapter 245’s statutory predecessor.
The SB 1704 Guidelines directed staff that, with respect to development projects initiated in the
City’s extraterritorial jurisdiction, a “new project” would be presumed if there had been a change
between two “major use categories.” Those two “major use categories” were—consistent with the
basic regulatory structure of the Barton Creek Watershed ordinances—(1) “Single family/duplex”;
(2) “All others.” Following a hearing, the district court denied the motion. This appeal followed.
DISCUSSION
Harper Park Two brings two issues on appeal. In its first issue, Harper Park Two
challenges the legal and factual sufficiency of the evidence supporting the district court’s legal
conclusion that the relevant “project” on the date the initial preliminary plan application was filed
(July 30, 1985) was solely an office, such that the vested-rights protections of chapter 245 would
11
extend only to that sort of development and not to the desired hotel building. In its second issue,
Harper Park Two urges in the alternative that the district court abused its discretion in refusing to
reopen the evidence or grant a new trial in light of the late-discovered 1995 “SB 1704 Guidelines”
memorandum. We need only address the first issue.
Although couched as an evidentiary-sufficiency complaint, Harper Park’s first issue
turns principally on construction of chapter 245 of the local government code and its application to
undisputed material facts. Statutory construction presents a question of law that we review de novo.
State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). Consequently, we do not defer to any
construction of chapter 245 by the district court that is reflected in its findings or conclusions. See
In re E.I. DuPont de Nemours & Co., 92 S.W.3d 517, 522 (Tex. 2002) (proper construction of a
statute “is a legal issue on which the trial courts’ views are not entitled to deference”); Hartsell
v. Town of Talty, 130 S.W.3d 325, 327 (Tex. App.—Dallas 2004, pet. denied) (“Because
construction of Chapter 245 is a question of law, we do not defer to the trial court’s findings.”).
Our primary objective in statutory construction is to give effect to the Legislature’s
intent. See Shumake, 199 S.W.3d at 284. We seek that intent “first and foremost” in the statutory
text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006). “Where text is clear, text
is determinative of that intent.” Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437
(Tex. 2009) (op. on reh’g) (citing Shumake, 199 S.W.3d at 284; Alex Sheshunoff Mgmt. Servs.
v. Johnson, 209 S.W.3d 644, 651-52 (Tex. 2006)). We consider the words in context, not in
isolation. State v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002). We rely on the plain meaning of the
text, unless a different meaning is supplied by legislative definition or is apparent from context, or
unless such a construction leads to absurd results. See Entergy Gulf States, Inc., 282 S.W.3d at 437;
12
City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008); see also Tex. Gov’t Code Ann.
§ 311.011 (West 2005) (“Words and phrases shall be read in context and construed according to the
rules of grammar and common usage,” but “[w]ords and phrases that have acquired a technical or
particular meaning, whether by legislative definition or otherwise, shall be construed accordingly.”).
We also presume that the Legislature was aware of the background law and acted with reference to
it. See Acker v. Texas Water Comm’n, 790 S.W.2d 299, 301 (Tex. 1990). We further presume that
the Legislature selected statutory words, phrases, and expressions deliberately and purposefully. See
Texas Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010); Shook
v. Walden, 304 S.W.3d 910, 917 (Tex. App.—Austin 2010, no pet.). Our analysis of the statutory
text may also be informed by the presumptions that “the entire statute is intended to be effective”
and that “a just and reasonable result is intended,” Tex. Gov’t Code Ann. § 311.021(2), (3)
(West 2005), and consideration of such matters as “the object sought to be attained,” “circumstances
under which the statute was enacted,” legislative history, “common law or former statutory
provisions, including laws on the same or similar subjects,” and “consequences of a particular
construction.” Id. § 311.023(1)-(5) (West 2005). However, only when the statutory text is
ambiguous “do we ‘resort to rules of construction or extrinsic aids.’” Entergy Gulf States, Inc.,
282 S.W.3d at 437 (quoting In re Estate of Nash, 220 S.W.3d 914, 917 (Tex. 2007)).
The parties’ dispute centers on the meaning of “project” as used in chapter 245.
Chapter 245 defines “project” as “an endeavor over which a regulatory agency exerts its jurisdiction
and for which one or more permits are required to initiate, continue, or complete the endeavor.”
Tex. Loc. Gov’t Code Ann. § 245.001(3). The “endeavor” that characterizes a “project,” the parties
agree, would necessarily be reflected in the contents of the initial permit application, here the
13
1985 preliminary plan application. However, the parties differ, as a threshold matter, as to whether
we are to look to the entirety of the endeavor contemplated in the application or solely to the
portion of the plan relating specifically to the six-acre lot at issue. Harper Park Two urges the former
interpretation, while the City, insisting that the preliminary plan application identified multiple,
separate “projects” applicable to individual lots, asserts the latter view. Only Harper Park Two’s
construction finds support in the statutory text.
The Legislature defined “project” in chapter 245 in terms of a single “endeavor”
that may require a “series” of permits to complete. Id.; see id. § 245.002(b). It further provided that
“[a]ll permits required for the project,” including “[p]reliminary plans and related subdivision plats,
site plans, and all other development permits for land covered by the preliminary plans or
subdivision plats[,] are considered collectively to be one series of permits for a project.” Id. It is
the filing of “the original application for the first permit in that series,” furthermore, that triggers the
vested rights under the statute. Id. From these interrelated provisions, it is evident that the relevant
“project” is, as Harper Park Two contends, the single “endeavor” reflected in the “original
application for the first permit in th[e] series”—not, as the City suggests, individual components
of the larger, original “project”/“endeavor” that may subsequently require separate permits. See
Hartsell, 130 S.W.3d at 328 (rejecting Town’s argument that subdivision “project” should be divided
into an infrastructure planning project and a home-construction project, and noting that “the
definition of ‘project’ contemplates ‘one or more permits’ may be ‘required to initiate, continue, or
complete the endeavor’”); see also BMTP Holdings, L.P. v. City of Lorena, 2011 Tex. App. LEXIS
4207 at *14 (Tex. App.—Waco June 1, 2011, no pet. h.) (op. on reh’g; mem. op.) (“[c]hapter 245
has been held to encompass the entire development process from the preliminary plat to the
14
construction of a structure within the subdivision, which does not change unless the scope of the
‘project’ changes, regardless of changes in ownership” and “the project includes the entire process,
not the discrete components”); see also DeQueen, 325 S.W.3d at 635 (we presume that the
Legislature selected statutory language deliberately and purposefully); Jones v. Fowler, 969 S.W.2d
429, 432 (Tex. 1998) (“legislative intent should be determined from the entire act, and not simply
from isolated portions” so “we must read the statute as a whole and interpret it to give effect to every
part”). Consequently, the relevant “project” under chapter 245 is the Harper Park subdivision as a
whole, as reflected in the 1985 preliminary plan application, not the six-acre lot viewed in isolation.
Relatedly, Harper Park Two urges that the “office” label on the six-acre lot in
the 1985 preliminary plan application does not, as a matter of law, limit the nature of the
relevant “project” solely to an office building. What mattered instead, Harper Park Two asserts,
was the application’s characterization of the overall development as mixed-use “Condo, Office,
Commercial.” It also emphasizes that under the City’s land-use regulations applicable at the
time—the Barton Creek Watershed ordinances—offices, hotels, and other forms of development
other than single and two-family residential units all came within a single regulatory classification
of “commercial” development. See Austin, Tex., City Code ch. 41A, art. I, § 41A-101.4(b) (1981);
Austin, Tex., City Code ch. 9-10, art. V, § 9-10-305(b) (1982). Assuming the “commercial”
development was constructed in a manner consistent with the requirements of the Barton Creek
Watershed ordinances, as Harper Park Two observes, the City had no authority at the time to control
whether the development was an office, a hotel, or some other type of commercial development. The
City, in fact, acknowledges that the use labels on the preliminary plan application were not
15
mandatory or binding and that it had no authority on June 30, 1985, to prevent construction of a hotel
rather than an office on the six-acre lot.
We agree with Harper Park that the “project” identified in the 1985 preliminary plan
application was—with respect to both the six-acre lot and the entire property—“commercial”
development, as defined under the then-applicable Barton Creek Watershed ordinances, and
was not limited to an office building or any other specific type of “commercial” development. To
hold otherwise would amount to retroactive imposition of limitations and distinctions that did not
exist in the City’s “orders, regulations, ordinances, rules, expiration dates, or other properly adopted
requirements in effect” on June 30, 1985, the date when “the original application for the first permit
in th[e] series” of permits required for the project was filed. Tex. Loc. Gov’t Code Ann.
§ 245.002(b). Such retroactive “changing of the rules” governing a development project squarely
violates chapter 245. See id. In other words, what matters under chapter 245, as Harper Park Two
suggests, is that the 1985 preliminary plan application, viewed in the context of the applicable land-
use regulations at the time, gave notice to the City that the Harper Park Two subdivision would be
a mixed-use “commercial” development subject to the corresponding requirements of the
Barton Creek Watershed ordinances. It is this identification of the contemplated development as
“commercial” in nature that defines the nature and scope of the “project,” not narrower descriptive
terms or labels that all parties agree had no legal effect at the time.
In advocating a different conclusion, the City insists that determination of the nature
or scope of the relevant “project” turns instead on a fact-intensive assessment of the owner or
developer’s subjective intent or state of mind at the project’s outset and whether the specific
development later attempted was specifically contemplated at the project’s inception. It suggests
16
that the first-hand testimony of the original owner or developer would be the best evidence of
that intent, but barring that, a fact-finder could glean indicia of intent from permit applications and
other filings. Under this analysis, the City insists that the “office” labels over the six-acre lot in the
1985 preliminary plan application and 1997 revised plan that preceded the Harper Park One plat can
be considered evidence of specific intent to develop the lot solely as an office building and nothing
else. As an additional layer of the analysis, the City further reasons that ascertainment of the owner
or developer’s subjective intent might well turn on the individualized perceptions of whichever
City staffers examined the filings (a view that the City offers in downplaying the significance of the
1995 SB 1704 Guidelines memo and its 1997 determination that a private school was part of
the original “project” even while a hotel was not in 2009). But the Legislature followed a different
approach in chapter 245, looking instead to objectively ascertainable standards—the legal
implications of the initial permit filing under the “orders, regulations, ordinances, rules, expiration
dates, or other properly adopted requirements” in effect at the time. Tex. Loc. Gov’t Code Ann.
§ 245.002(b). We would further observe that the City’s approach strikes at the heart of a statute that,
as previously noted, is intended to combat regulatory uncertainty.
Beyond this, the City insists that “project” under chapter 245 must be construed
“narrowly,” and a “narrow” construction, it urges, compels the conclusion that a “project” that
includes an office building is not the same as one that includes a hotel. In support, it cites
En Seguido, Ltd., 227 S.W.3d at 242-43, and an attorney general opinion cited therein Op. Tex. Att’y
Gen. No. JC-0425, for the proposition that “a project is specific” and has “a narrow meaning.” The
basis for the City’s assertion is the En Seguido court’s recognition that “rights vest in a particular
project and are no longer vested if the project changes.” Id. at 242-43. However, nothing in this
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statement, especially when read in context with En Seguido as a whole, embraces or implies that the
relevant “project” must be viewed narrowly.
The question in En Seguido was whether En Seguido, the landowner, could subdivide
a 27-acre, single-lot tract it had purchased into 154 lots and still maintain vested rights in the
“project” for which the initial owner had filed a subdivision plat in 1971. Id. at 239-40. In addition
to supplanting a single lot with a great many more, the changes entailed adding a considerable
number of roads and other infrastructure. The trial court nonetheless granted summary judgment in
favor of En Seguido, declaring that the regulations dating back to 1971 would control development
of the 154-lot subdivision. Id. at 239. The court of appeals reversed the summary judgment on the
basis that “genuine issues of material fact were raised with regard to the nature of En Seguido’s
vested rights.” Id. at 245. However, as Harper Park Two observes, the court’s disposition
indicates that on a different summary-judgment record, the 154-lot subdivision might have been
considered the same project as the original single-lot development, notwithstanding the dramatic
changes. Nothing in this analysis adopts a “narrow meaning” of “project.” At most, En Seguido
merely restates the basic proposition that whatever a “project” was at its inception is entitled to
chapter 245 protection. The same is true of the attorney general opinion. See Op. Tex. Att’y Gen.
No. JC-0425 at 3.
In any event, we are to construe chapter 245 in a manner consistent with the
Legislature’s intent, and whether that leads to a particularly “narrow” or “broad” application is
entirely a function of the words the Legislature has chosen. See DeQueen, 325 S.W.3d at 635 (“We
presume the Legislature selected language in a statute with care and that every word or phrase
was used with a purpose in mind.”); see also City of Waco v. Texas Comm’n on Envtl. Quality,
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No. 03-09-00005-CV2011, Tex. App. LEXIS 4644, at *62 (Tex. App.—Austin June 17, 2011,
no pet. h.) (op. on reh’g) (noting that statute’s text, not perceived subjective intent of Legislature,
controlled whether it operated “narrowly” or “broadly”). The words that the Legislature has chosen
in chapter 245 guide us to view the relevant project in the context of the applicable land-use
regulations in effect at the time the initial permit application was filed. In this case, that analysis
leads us to conclude that the “project” was “commercial” development that would encompass a
hotel. To the extent that anything in En Seguido’s analysis or that of the Attorney General could be
seen as inconsistent with that view, we would respectfully disagree with them.
Finally, both parties emphasize events subsequent to the filing of the
1985 preliminary plan application. Harper Park Two emphasizes the 1992 zoning of the six-acre lot
as Community-Commercial—a classification that, again, would allow a hotel—suggesting that it
was entitled to “take advantage” of the zoning “without forfeiting any rights under this chapter.”
Tex. Loc. Gov’t Code Ann. § 245.002(d). Because we have already held that the original
1985 “project” was “commercial” development that would encompass a hotel, we need not reach
whether the 1986 zoning would have independently conferred those development rights if the
filing of the preliminary plan application had not. However, we note that because the then-owner
voluntarily accepted the 1992 zoning and related restrictive covenants, those limitations, along with
the Barton Creek Watershed ordinances, will govern development of the six-acre lot, as Harper Park
Two acknowledges.
In addition to citing various perceived indicia of the owner or developer’s subjective
intent to build only an office on the six-acre lot (an approach that, again, misses the point of
chapter 245), the City suggests that Harper Park Two would have waived any vested rights in regard
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to the lot by applying for a final plat that designated the lot’s use as “Commercial-Office.” The
district court did not make findings to support the City’s waiver theory; consequently, it was not
preserved. See Fielder v. Abel, 680 S.W.2d 655, 656-57 (Tex. App.—Austin 1984, no writ). In any
event, we agree with Harper Park Two that its actions in connection with obtaining the final plat
fall short of the sort of intentional relinquishment of a known right that characterizes waiver. See
In re General Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (“Waiver requires intent, either
the ‘intentional relinquishment of a known right or intentional conduct inconsistent with claiming
that right.’” (citation omitted)). In applying for the final plat in March 2007, Harper Park Two
specified its designated land use as “Commercial-Retail.” When the City rejected its application,
Harper Park Two changed its description of the intended land use to “Commercial-Office.” Neither
“Commercial-Retail” nor “Commercial-Office” appears in the City Code, and they are mere
shorthand descriptions of land use; neither term in itself had the legal effect of either prohibiting
or permitting construction of a hotel. Moreover, Harper Park Two noted on the application to
determine chapter 245 protection: “[f]inal plat consistent with approved preliminary.” Further, in
the letter accompanying its final plat application, Harper Park Two specified that it was not
identifying “any particular use” at that time, but instead intended to “final plat and build the
associated road which is consistent with the approved preliminary” and noted that the property was
zoned “GR”—Community Commercial, again a classification that would permit construction of a
hotel. These actions by Harper Park Two are not evidence that it acted inconsistently with asserting
its right to build a hotel on the six-acre lot under the land-use regulations in effect in 1985.
In sum, based on our construction of chapter 245 and the undisputed facts that are
material to its application here, Harper Park Two’s proposed hotel development is within the same
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“project” that was initiated by the 1985 filing of the preliminary plan application—“commercial”
development, as defined under the Barton Creek Watershed ordinances. Consequently, chapter 245
requires the City to apply the same “orders, regulations, ordinances, rules, expiration dates, or other
properly adopted requirements in effect” on July 30, 1985, “the time the original application for the
first permit . . . [was] filed . . . [as] the sole basis for consideration of all subsequent permits required
for the completion of the project,” along with the zoning and restrictive covenants that
were voluntarily imposed on the property between 1986 and 1992. Tex. Loc. Gov’t Code Ann.
§ 245.002(b). The district court erred in declaring otherwise. We sustain Harper Park Two’s
first issue, reverse the district court’s judgment, and render judgment declaring that Harper Park Two
is entitled to develop Section Two as a hotel, office, or any other commercial use consistent with the
rules, regulations, ordinances, and requirements in effect on July 30, 1985, and the aforementioned
zoning and restrictive covenants.
In the event we so held, Harper Park Two has requested that we also reverse the
district court’s take-nothing judgment on its attorney’s-fees claim and remand the claim for
reconsideration in light of its status as the prevailing party under our judgment. We will do so. See
Roberson v. City of Austin, 157 S.W.3d 130, 137 (Tex. App.—Austin 2005, pet. denied).
Having sustained Harper Park Two’s first issue, we need not address whether the
district court abused its discretion in denying Harper Park Two’s motion to reopen the evidence or
for new trial. See Tex. R. App. P. 47.1.
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CONCLUSION
We reverse the district court’s judgment and render judgment declaring that
Harper Park Two is entitled to develop Section Two as a hotel, office, or any other commercial use
consistent with the rules, regulations, ordinances, and requirements in effect on July 30, 1985, and
the zoning and restrictive covenants that the then-owners of the property voluntarily assumed
between 1986 and 1992. We also reverse the district court’s take-nothing judgment on Harper Park
Two’s attorney’s-fees claim and remand that claim for reconsideration in light of our judgment.
__________________________________________
Bob Pemberton, Justice
Before Justices Puryear, Pemberton and Rose
Reversed and Rendered in part; Reversed and Remanded in part
Filed: August 18, 2011
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