December 2022

• All real estate developers and investors will eventually have to deal with local government officials.
• When doing so, there is no substitute for knowing the local ordinances and statutes.
• And having a good working relationship with the officials can be very beneficial to getting goals accomplished.

As a real estate investor or developer in Texas – or likely, anywhere in the United States – you are going to eventually have to deal with the local municipality. Whether that’s through requests for zoning variances, code enforcement issues, or whatever, dealing with the local city and/or county is an inevitability.

And it does not matter if you are dealing with a large city like Dallas or a smaller town like Lago Vista. Dealing with the local government is just a fact of life.

So this week, I am writing about some things to think about when the next time you are dealing with that local city or county. We have had a lot of opportunities to deal with local government officials on behalf of our clients. And, as a result, can share some of the knowledge we have gained. To be clear, though, we are NOT land use attorneys. That is a specialized area of real estate and, as of now, we do not practice in it.

No Substitute for Knowing the Law

I started my career at a big law firm in Houston. And one of the best things I ever learned there – and that was repeatedly pounded into our heads as a young associate – is there is no substitute for knowing the law. And that means reading the statute. As a lawyer, its something we have to do and the starting point for all discussions.

That same rule applies to dealing with local government officials. When you are working with a city or county official, that person is operating subject to local ordinances and statutes. And if they are citing your property or want you to do something at it, they are following other local rules.

Well you cannot have a meaningful discussion with the local official if you do not know the ordinance that person is citing. This includes not only knowing the statute or ordinance that the government official is citing but also other ones that may be relevant.

I am stating the obvious when I say that local governments are highly regulated by statutes. They are required to follow strict procedures and policies. But not everyone knows those rules. That’s why it is so vital to make sure you – or your attorney – fully understands the laws. There’s just no substitute for it.

Dealing with the Local Official

Once you fully understand the ordinances and/or statutes that govern the situation you are dealing with, the next step is to actually engage with the local official. Unfortunately, this can often be contentious. But we work very hard to try to forge a good working relationship with the local official. Usually we all want the same goal – we just may disagree the best way to get there.

Our first step, therefore, is to personally engage the official on the ground and figure out exactly what the issue is. And see if we can come to an agreement on the best way to resolve it. While this will often lead to resolution, unfortunately that is not always the case.

That is why its very important to know your options if you think the first point of contact official is being unreasonable. We try, therefore, to also forge good working relationships with the higher level government officials who are more responsible for the implementation of the policies in the ordinances and statutes. Sometimes they can be more reasonable and understand the overarching goal of the legislation.

And, of course, the last step can always be to head to the local elected official directly and see if its possible to get a resolution there. They are responsible to the constituents and also the government official who most understands the policy goals.

Dealing with a local government agency does not have to be a stressful process. If you understand the laws and have a good working relationship with the officials, it can hopefully be a relatively painless transaction.

• The Austin City Council approved a redevelopment plan for the old Austin-American Statesman site.
• It will include six towers of residential, office, and retail.
• As always, Austin has a severe housing shortage. So these new units are a welcome development.

I do not usually report news in this blog. I generally just comment on it. But there was a pretty big development in the Austin real estate market last week. So I thought it would make sense to talk about it this week.

On December 2, the Austin City Council finally approved plans for a grand new development that will help to transform downtown. Once the development is built, it will provide much needed new residences and add significantly to the Austin skyline.

I am, of course, talking about the old Austin American Statesman site just south of the river. It’s a large site for which Endeavor has been working to get approval for a redevelopment. And last week, it finally received that approval from the City Council.

Struggle to Get Approved

As you probably know, Endeavor has been working to get the Statesman site redevelopment approved for at least a year now. It allegedly went through lots of negotiations with the City Council. And also had to respond to objections by the local neighborhood groups.

But on December 2, the third and final reading of the redevelopment plan at the City Council passed the resolution by an 8-2 vote, with one member abstaining. The no votes were from Kathie Tovo and Allison Alter.

What will the Development Entail

The Cox family owns the 19 acre site and it is working with Endeavor to redevelop it. The proposal is for a new PUD that will consist of:

• 1,478 residential units;
• 5 million square feet of office space;
• A 275 room hotel; and
• 150,000 square feet of retail and restaurant space.

This will all be contained in six separate towers on the Statesman site.

Usually, to get a development like this approved, the developers will have to agree to provide some affordable housing units in its development plan. But here, instead of including those units directly in the plan, the developer has agreed to pay the City $23 million dollars. The City will then use those funds to build affordable housing elsewhere around town.

I have talked about this a lot in this blog – but Austin has a critical housing shortage. And it needs all the development it can get. So adding an additional 1,478 units is great news. And while Endeavor undoubtedly will not break ground for at least a year, I look forward to the day we can explore the new towers at the old Statesman site.