Development rights swap coming to Council

The City Council Planning and Neighborhoods Committee voted 3-0 Thursday, with Mayor Pro Tem Kathie Tovo abstaining, to recommend that the full Council enter into an agreement that will remove a longstanding auto salvage company from the banks of Bull Creek, remediate the contamination and transfer impervious cover credits to the owner for sale to a developer.

Roy Cavanaugh, who owns Ace Auto Salvage as well as a glass business at 6308 Spicewood Springs Road, intends to build a dog kennel and storage units after cleaning up the property. He agreed Thursday to reduce a planned six-story building to three stories. The approximately 6-acre site includes 2.64 acres in the critical water quality zone outside of the drainage easement.

The property is in Council Member Sheri Gallo’s District 10. She made the motion to approve the staff recommendation, with some tweaks. Gallo and Tovo want to make sure that Cavanaugh will live up to his side of the agreement and not come back to Council asking for money if he has trouble selling the impervious cover credits.

The agreement does not allow Cavanaugh to use the credits in environmentally sensitive areas.

Gallo also asked that a city transportation planner research an alternative entrance to the property, because neighbors have expressed concerns about traffic safety at the current entrance. Planning Director Greg Guernsey assured her that they would look into it before next week’s Council meeting, when the item will be on the agenda.

City Environmental Officer Chuck Lesniak explained why Council members might be leery of committing to an agreement that includes transferable impervious cover credits, citing the city’s experience with developer Bill Walters and the Friesenhahn tract on the banks of Barton Creek.

The city had entered into a conservation easement and in return had granted Walters impervious cover credits. However, Lesniak said, “There were a lot of limitations on where those credits could be used. Mr. Walters came back a few years later, saying he couldn’t sell the impervious cover credits and that they were useless to him.”

Lesniak said that as part of the agreement, because Walters had not gotten value from the contract he had with the city, Council ended up paying him a certain amount of cash and giving him credits in exchange for permitting fees because he was a developer.

Lesniak said city staff has been working with Cavanaugh over the past five or six years — and Lesniak himself for three — to try to reach an agreement.

He explained that the city is giving Cavanaugh milestones. “So if you get a certain amount of it done, we’ll give you half the credits,” Lesniak said. “And then once you get the rest of it done, we’ll give you the other half of the credits. So it gives him an incentive to keep moving.”

Cavanaugh wants the credits so he can sell them to developers and get cash to work on the property as soon as he can. He told the committee Thursday that he would abide by the agreement, but wanted to get the impervious cover credits before completing the work. That seems highly unlikely, given the experience Council had with the Friesenhahn tract.

Tovo said she was cautiously optimistic, but still abstained on the vote. Later she explained, “It’s a pretty complicated deal, and I feel like I need to ask more questions to understand fully what rights the property owner is retaining and which are actually being incorporated into the development agreement.” Tovo added that she had not been aware that the kennel was still part of the plan.

“The only other time we did transfer impervious cover rights, we had a developer who came back to the city to be compensated,” she said. “I want to be extremely careful that we’re not in that situation again.”