I recently read the the case of Harper Park Two, LP vs. City of Austin. The case tested the City’s interpretation of Chapter 245 and is certainly worth reading for a developer or land development consultant working in the City of Austin.
Chapter 245 of the State of Texas Local Government Code provides regulatory guidelines for obtaining vested development rights on a specific project, often referred to as grandfathering rights. Commonly, the existence of vested rights is often referred to as “1704 Entitlements”. In fact, Texas House Bill (HB) 1704 has become codified as Chapter 245 of the Local Government Code.
In Harper Park Two, the appellant argued that his “commercial” project was subject to the development regulations that were in effect at the time of the initial project application. For this project, that date correlates to the date the first preliminary subdivision plan was filed on July 20, 1985.
In this specific case, the commercial project started as an office land use initially (with the corresponding label shown on the preliminary plan), but the current land owner argues that commercial is commercial regardless of the land use being proposed as office, hotel, retail, etc. The landowner now desires to build a hotel on the property and wants to use the regulations in effect in 1985.
The City of Austin disagreed with the developers argument. Instead putting forth the position that the office and hotel land uses would be considered different land uses. And as a result, changing from one to the other would in effect make any grandfathering rights null and void. This position has merit, as evidenced by support of the district court.
The district court first rendered judgment declaring that Chapter 245’s vested-rights protections would apply only to development of the lot for office use. Which would mean that the hotel land use now proposed must comply with the city’s current, and more restrictive, land-use regulations.
The court of appeals however believes that the district court decision was in error, and reversed the decision. The Court of Appeals decided that the project must be viewed in the context of the applicable land-use regulations in effect at the time the initial permit application was filed. In 1985, the City had two land use categories – commercial and residential. Thus, at the time, the office use was really in the more generic “commercial” category, and such a category would include the hotel land use.
Officially the district court’s judgment was reversed and rendered in part, and remanded in part. While each case is unique and must stand on its own merits and facts, Harper Park Two will no doubt have lasting effects on future Chapter 245 claims for projects in the City of Austin.