Dog’s Head Detractors Bark Back With Lawsuit

Back in July, Save Our Springs Alliance attorney Bobby Levinski warned that the city of Austin was walking into a lawsuit over the planned Dog’s Head development. That lawsuit has arrived. 

SOS, People Organized in Defense of Earth and Her Resources, and a group of Dog’s Head neighbors filed suit against Austin and City Council on Monday, challenging the legality of the two major actions city leaders have taken thus far on the proposed development east of Downtown, which is to be built over 4 square miles of land next to the airport and is imagined as a city within the city. 

The lawsuit’s first challenge is to Council’s unanimous approval in May of the 45-year development agreement with the company that has been buying up land in the Dog’s Head over the last several years, the Endeavor Real Estate Group. The second is to Council’s July approval of a Tax Increment Reinvestment Zone for the project, which would give Endeavor over a billion dollars from future property and sales taxes collected in Dog’s Head to reimburse the company for their construction of roads, utility lines, and other infrastructure. 

The amount of taxpayer money that would ultimately flow to Endeavor has been estimated at $1.5 billion, but the Dog’s Head lawsuit pegs the figure at $2 billion. “The $2 billion rebate over 35 years is only a guesstimate from Endeavor; we actually have no idea how much the rebate will actually be since the rebate commitment is not capped and expressed only as a percentage of future taxes generated on the Dog’s Head land,” Levinski said in a press release announcing the lawsuit. 

Susana Almanza, executive director of PODER, pointed out that city leaders have raised taxes and fees while cutting services in recent budgets, saying, “The last thing Austin should be doing is diverting billions in future public revenue away from libraries, parks, public safety, and affordable housing to subsidize private development that was already moving forward.”

Endeavor responded to the lawsuit by invoking a vision of what it wants to create on Dog’s Head. “The Dog’s Head project would transform a former sand and gravel mining site into a mixed-use community with jobs, housing, public infrastructure, and more than six miles of public trails along the Colorado River,” the statement reads. “The property voluntarily annexed into the city of Austin, creating new city tax revenue that would not otherwise exist. The developer funds the infrastructure upfront, with eligible reimbursement tied only to that new tax revenue. It isn’t using today’s tax dollars. It’s creating tomorrow’s tax base to help fund parks, public safety, infrastructure, and other city services.”

In his July warning about a Dog’s Head lawsuit, Levinski called attention to a similar suit filed against the city in 2023, after Council approved a TIRZ for the South Central Waterfront, a redevelopment of the old American-Statesman site on the south shore of Lady Bird Lake, which the city argued was blighted. A Travis County judge disagreed, ruling that the TIRZ created for the project violated the state law requiring TIRZs to only be placed in areas where development “would not occur solely through private investment in the reasonably foreseeable future.” The ruling stopped an estimated $354 million in future taxpayer dollars from being sent to the project’s developers, one of which was Endeavor.

The lawsuit filed Monday relies on the same argument. “The Dog’s Head property is not a stranded, blighted area, waiting helplessly for public rescue necessary to spur development,” it reads. “It sits in one of the fastest-growing development corridors in the nation and the region, bordered by major highways, adjacent to Austin-Bergstrom International Airport, and anchored by Tesla’s Gigafactory. It’s an area positioned for and already experiencing rapid growth.”

The lawsuit also argues that Council violated the Texas Constitution when it adopted the May development agreement giving Endeavor powers that rightfully belong to the city, such as control over zoning, water quality, and land development regulations. The agreement allows the developer to veto any changes in regulations that the city might try to enact for the next 45 years. 

“The result is an unconstitutional delegation of legislative authority,” the lawsuit reads, “because future Councils cannot make effective zoning or development regulation changes for thousands of acres of Colorado River frontage unless Endeavor – through its affiliate whose property benefits from the lack of regulation – agrees. Such landowner vetoes have long been regarded as unconstitutional by the Texas Supreme Court.”

The lawsuit also details the lightning-fast approval of the development agreement. It states that the city posted the first reference to the project’s existence on May 8, setting a time for Council to consider the agreement, and that the actual text of the agreement was made public on May 15. Six days later, on May 21, Council approved it. 

“That gave the public less than one week to review the actual agreement before Council action,” the lawsuit reads. “There were no prior public meetings, no newspaper notice, no mailed notice to nearby residents, and no review by any city boards or commissions, including the Planning Commission, even though such review is ordinarily required for proposals involving land development regulations.”

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