San Marcos Mercury | Local News from San Marcos and Hays County, Texas

December 3rd, 2010
Despite protests, county purchases 50 acres adjacent to Jacob’s Well

Jacob's Well near Woodcreek in western Hays County. FILE PHOTO

Jacob’s Well near Woodcreek in western Hays County. FILE PHOTO

News Reporter

Hays County’s plan to purchase of 50.199 acres adjacent to Jacob’s Well came under fire last week from the deal’s opponents, who include at least two incoming commissioners court members and some Hays Trinity Groundwater Conservation District (HTGDC) board members.

Commissioners voted 4-1 in August to buy the 50.199 acres, though negotiations with landowner Westridge Joint Venture (JV) have continued for months, reviving hopes among the plan’s critics that the deal might not happen.

After hours of discussion among the public, commissioners, and other interested parties, the court voted 4-1 last week to buy the 50.199 acres and thereby end a protracted two-year struggle to extricate the City of Woodcreek and the Wimberley Valley Watershed Association (WVWA) from their legal battles with Westridge JV. In the same motion, the court agreed to deliver up to $100,000 to a title company specified in an option agreement, which had not been included in the deal commissioners approved in August.

The county’s purchase of the 50.199 acres has not been finalized, nor have the legal battles ended. Once the option agreement has been signed, a specific closing date will be specified. The county may close on the property by the end of the month, and if it does, Westridge will drop the lawsuits.

Westridge JV, owner of the 50.199-acre tract, filed suit against WVWA and the City of Woodcreek three years ago. Westridge JV sued WVWA for access to the springs so it could build a road across from Jacob’s Well for a proposed residential resort on the tract. Westridge JV sued Woodcreek to avoid being subject to the city’s water quality protection ordinance. The ordinance limits impervious cover in the recharge zone of the Trinity Aquifer. Jacob’s Well Natural Area is in the recharge zone.

Proponents of the land deal say Westridge’s proposed development would pose a threat to water quality and quantity in the area, decreasing nearby property values in the long term.

Seven of the 13 members of area residents who addressed the court last week either opposed the county’s purchase of the 50.199 acres or asked commissioners to wait until three commissioners elected in November take their oaths in January.

“I asked for a two-week stay before the vote so that we could clarify some of the issues,” Hays County Judge-elect Bert Cobb (R-San Marcos) said after the meeting. “I had read the contract and the contract was an abomination, in my opinion, because some critical elements were not spelled out clearly. And you saw that late in the evening when we were talking about easements, and who’s got what, and how the money was apportioned, and where it was going to be spent. I slept real well last night (after the meeting) knowing that I’d done the very best I could for the people of Hays County, to get the issues out on the table. And if we’re going to spend that kind of money, we need to be very clear about what we’re buying with our money.”

Hays County Judge Liz Sumter (D-Wimberley) cast the lone vote against the 50.199-acre purchase. Sumter also cast the sole vote against the same item when it came up for vote in August. In August, Sumter said she is concerned about regulating access to Jacob’s Well when some nearby residents have easements granting them access to the spring. Sumter said she was concerned about future costs to the county associated with maintaining the approximately 80-acre preserve.

Commissioners agreed to acquire the 50.199-acre tract near Jacob’s Well from Westridge JV with $850,000 in parks and open space bond funds and with $850,000 loaned from The Nature Conservancy (TNC). Commissioners agreed to pay off the loan over three years using whatever funds can be raised from public and private sources. There will be about $1.559 million remaining in un-expended parks and open space bond funds after the Jacob’s Well purchase.

The Jacob’s Well Natural Area will be managed by WVWA for three years and be open to the public, under the terms of an agreement between the two parties. The original management agreement approved in August stipulated a five-year term, but commissioners shortened it at the last minute last week to placate the deal’s critics. Skeptics of the deal said the county seemed to be giving too much power to WVWA, which one critic called “a neighborhood association.”

In 2005, WVWA acquired a 46-acre tract including Jacob’s Well with a $2 million private loan and a gift of $1 million. In 2008, commissioners gave WVWA $3 million in parks bond funds to pay off the debt on the land and continue the restoration, management, and the building of capital improvements on the site. WVWA hosts educational events and seminars at Jacob’s Well, offers free public tours and sponsors field trips there for schools and community groups. WVWA owns and operates Dancing Waters Inn on its property near Jacob’s Well.

Hays County Precinct 4 Commissioner-elect Ray Whisenant (R-Dripping Springs) said that while the county’s purchase of the 50.199 acres “is a worthy cause,” the deal itself will pose an undue liability and “an administrative problem” for the county.

Critics of the deal said commissioners want to buy the property at too high a price. WVWA Executive Director David Baker said two appraisals of the 50.199 acres came to $2.45 million and $1.4 million, respectively, compared to the $1.7 million purchase price. Hays County Precinct 3 Commissioner Will Conley (R-Wimberley) said it is not unusual for land to be appraised and purchased at a much higher value than the appraisal district’s assessment.

The county’s purchase of the 50.199 acres enables the Jacob’s Well Natural Area to increase to about 80 acres of public access preserve. WVWA, which owns an approximately 46-acre tract adjacent to the 50.199 acre parcel, agreed to deed about 31 acres of their property to the county. WVWA will retain the remaining approximately 15 acres in fee simple ownership as a headquarters and base of operations. The 31 acres to be transferred to the county includes Jacob’s Well.

The waters of Jacob’s Well emanate from the Trinity Aquifer and feed Cypress Creek, which flows downstream through Woodcreek, Wimberley, the Blue Hole swimming area, and into the Blanco River, thereby contributing to the recharge of the Edwards Aquifer and the San Marcos Springs. Jacob’s Well is also one of the longest underwater caves in Texas.

Sumter said the management agreement for the Jacob’s Well Natural Area should guarantee that the 15 acres retained by WVWA will remain as accessible to the public as the other land in the preserve. Before voting against purchasing the property, Sumter told her colleagues that the composition of the Jacob’s Well Natural Area Advisory Board should be determined before the county agrees to buy the land. A memorandum of understanding indicates the county, TNC, and WVWA will select the board members. One citizen who spoke at the court meeting last week said the county should be guaranteed more representation on the board if it buys the land.

Henly resident Jimmy Skipton, one of the principal opponents of the land deal, offered public comment at the commissioners court meeting last week and joined others in asking the court to at least postpone action on the matter.

Skipton questioned the WVWA’s competence to manage the nature preserve and cited as evidence a flier advertising a “love-in yoga retreat” that occurred at the well under WVWA’s supervision in October. Participation in the event cost $150 and featured, according to the psychedelically-colorful flier, swimming, meditation, yoga, kirtan, bonfire, and hiking.

During last week’s commissioners court meeting, Skipton told the court that it seemed as though Westridge JV had reneged on a deal to help pay for an appraisal of the property. Skipton said Westridge JV’s portion was $7,500.

“That’s who you’re dealing with,” Skipton said to commissioners. “You’re dealing with people who will sign a document, and they don’t pay.”

Hays County District Attorney’s Office Civil Division Chief Mark Kennedy, who is involved in the land negotiations, said he does not know whether Westridge JV paid the land appraiser for half of the appraisal.

Skipton then asked commissioners to “be very careful” and avoid wasting taxpayer dollars by rushing into the deal.

“That’s why we’re trying to get them away from our well,” Conley said in reply. “Because they are those types of people. We don’t want them anywhere close or associated with treasures or assets in our community.”

Skipton also asked about a proposal he said involved a $1.426 million payout to Westridge JV for the land, and a payment of $1.089 million to Austinites Rob Haug and Vince Wood, the principal members of Westridge JV. Of that loan, said Skipton, $815,000 would be donated back to the county for a tax write-off. Conley replied that the county viewed the proposal as “bogus” and had declined to accept it.

Skipton said the opportunity for wasted tax dollars in the deal was high, and noted that Haug and Wood seemed to be making more than $1.7 million on the land deal by their receipt of payments from WVWA and other parties.

WVWA President Jack Hollon said WVWA gave Haug and Wood $50,000 in compensation for the six-month delay in land negotiations. Hollon said the parties expected the deal to be finalized in May after a tentative settlement was reached in February. The tentative settlement was reached on the night before which the matter would have gone to court, said WVWA board member Malcolm Harris. Hollon said the request for $50,000 seemed reasonable.

Haug and Wood asked the City of Woodcreek for a monetary contribution in return for dropping their lawsuit. Under that proposal, Westridge JV would have reserved the right to re-file the lawsuit if the county failed to purchase the land.

“They wanted to have their cake and eat it, too,” Woodcreek Mayor Eric Eskelund said. “We decided not to agree to that.”

Eskelund spoke to commissioners in favor of the land purchase. Eskelund said the costs associated with the three-year lawsuit had strained the small city’s finances. Eskelund said the city agreed to contribute $25,000 towards the purchase of the 50.199 acres.

Wood declined to comment on the allegation that Westridge JV reneged on a promise to pay for half of an appraisal. Wood said he cannot comment on any matter regarding the Jacob’s Well deal because land negotiations are ongoing.

Mark Key, an HTGCD board member, also opposed the purchase. WVWA Executive Director David Baker is Vice President of the HTGCD board and a political opponent of Key and Skipton. Hollon is a former board member of HTGCD.

Conley said much of the opposition to the Jacob’s Well deal stems from “broader politics and personalities in the western part of the county in relation to the Hays Trinity board, and some of the differences that some of the elected officials have on that board.” Conley said friction from HTGCD politics spilled over into the Jacob’s Well deal.

Some opponents of the Jacob’s Well deal said the county may run into trouble if the property switches hands, because a conservation easement on part of WVWA’s Jacob’s Well property may soon be subject to bankruptcy court proceedings. Save Our Springs (SOS), the holder of the easement, has an unpaid debt, though it is not clear whether the easement is worth anything to the creditor or what bearing it has on the matter.

Conley declined to comment on that issue because he is unaware of the legal aspects, though he said he is not worried about it. WVWA’s attorney said the easement is probably worth nothing and should have no effect on the Jacob’s Well deal. The attorney representing the creditor said he is unsure of the easement’s value and has no stake in whether the county purchases the land or not. Kennedy — the court’s general counsel — said he anticipates the bankruptcy hearing’s outcome to pose no problem for the county.

San Marcos resident Lenee Lovejoy said the county would do better to use only parks bond funds for purchase of the 50.199 acres, rather than accept the terms of the purchase agreement. The agreement calls for $850,000 back at six percent interest per year, compounded monthly. Conley said the court has weighed all options carefully during the last two years and the current arrangement is the best possible, given what he said are severe time constraints. Conley said that if the court delays action on the matter, the whole deal would fall through. Harris, who is also WVWA’s attorney, said the litigation between WVWA and Westridge JV would proceed to the trial phase if commissioners did not immediately approve the amended purchase agreement.

Critics of the Jacob’s Well deal took issue with the lack of a mutual “no-cause” termination clause in the management agreement between the county and WVWA. Kennedy said the “with-cause” clause is balanced by the county’s lack of an obligation to provide funding for management of the preserve beyond the approximately $400,000 already allocated.

One resident who spoke in opposition to the Jacob’s Well deal said the planned conservation easement to include the whole property will render the land worthless, adding that the county should be able to at least retain the $1.7 million it will invest. Conley said the county is protecting the investments of all landowners in the area by keeping the springs pristine. Conley said there is broad support for the Jacob’s Well deal in his precinct, among regular citizens and government entities.

“We had this developer come out that wanted to put this hotel/condo development next door to Jacob’s Well that would be, I believe — and in full consensus of everybody involved in my precinct — would be a severe detriment to Jacob’s Well, and therefore to Cypress Creek,” Conley said. “Without the well flowing, we don’t have Cypress Creek. The studies we have done with the university and our stakeholder groups show that the value of land — if that creek runs dry, in the Wimberley Valley along the creek — drops immediately. All estimations show, on the very conservative level, a 30 percent decrease in value. The highest estimations show 50 percent. You want to talk dollars, we can talk serious dollars.”

Conley said the permanent drying of Jacob’s Well would imperil Blue Hole, into which $9 million in funds from the State of Texas, local organizations, and the county has been invested, he said. Conley said the county has invested almost $4 million million in Blue Hole Regional Park.

“This is essential to our quality of life and to our economy in the Wimberley Valley,” Conley said of the Jacob’s Well deal. “Part of this investment is environmental. Part of this investment for us is economics. You talk about job creation, you talk about hard times — our community up there is based off of tourism. Our beds and breakfasts, our downtown area, our restaurants. Without these natural resources and public access to these natural resources, that’s a detriment to our economy and our way of life. It’s a detriment to our land value, which has an impact on our emergency services, has an impact on our county budget, and has an impact on our local jurisdictions’ budgets.”

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0 thoughts on “Despite protests, county purchases 50 acres adjacent to Jacob’s Well

  1. Conley’s claims are without merit. The county could have purchased the land and retained the investment the county made. Instead, the county is paying a premium but won’t get the property it is paying for. The “appraisals” were based upon the property prior to imposition of the conservation easement by TNC. The county should not be paying the “unburdened price” for the “burdened property”.

    This deal is so bad for the county taxpayers in so many ways. Only WVWA and SOS are presently given authority to enforce the “conservation easement” over the existing 46/48/55 acres (area depends upon which WVWA story is to be believed). The county has no reciprocal authority to enforce the same easement against WVWA’s hotel operation. WVWA also expects to have the county property conveyed back to WVWA if the conservation easement is removed. Why should WVWA wind up with unencumbered property that the taxpayers have paid for over and over again? Why should SOS get a windfall from provisions that trigger payments to SOS at taxpayer expense?

    The reporter also failed to point out that Baker’s allegations of the land’s value are suspect at best. Baker is a prime beneficiary in this deal – not a disinterested party. The true rationale for the “value” is that this what Baker needed to buy his organization out of a lawsuit he provoked.

    The reporter failed to mention Conley’s failure to address the Save Our Springs (SOS) bankruptcy case in this “deal”. (Just one of many unresolved issued in the rush to empty the coffers). Nearly 100% of the value of the WVWA land (that taxpayers paid for) is tied up in a “conservation easement” presently owned by SOS. Emails obtained via Open Records requests establish that Conley, Baker, and SOS were well aware that the bankruptcy court would frown on transfers made without the approval of the bankruptcy court. Yet SOS conveyed interests in real estate to WVWA to confer a significant financial benefit to the city of Woodcreek, Westridge JV, and of course WVWA. Did SOS and WVWA get approval of the court or creditors? Of course not. Is it really prudent for the county to entangle itself with these groups again in this fashion?

    SOS is trying to stay in bankruptcy but has already lost that argument in prior trials. SOS has appealed and the appeal will be heard on December 7th, 2010 before the 5th Circuit. If SOS loses at the 5th Circuit then the judgment creditors can unwind this transaction – with county taxpayer money at risk. If SOS “wins” then it will remain in bankruptcy court and will need to try to get court approval retroactively for their actions. Their conduct in conveying their property outside the purview of the court, however, is inconsistent with a debtor that wants the protection of the bankruptcy court. Given SOS’ prior conduct – well let’s just say it would be fun to see what happens when SOS tries to explain their actions to Judge Gargotta. The bankruptcy court can likewise unwind this transaction for the benefit of SOS’ creditors. Again county taxpayer money is at risk.

    One would think that at the very least, county commissioners would act prudently by waiting until after the December 7th decision instead of rushing to put another $1.7 million of taxpayer dollars at risk. Only one – the current county judge – expressed reservations about a “deal” where so much has been left unaddressed, the risk of failure is high, the gain is zero, the potential for loss is high, and other more attractive alternatives were available.

    WVWA and SOS got themselves into these lawsuits and deservedly so. How many times is the county expected to extricate Baker from his self-inflicted situations? This time, the county might just find itself sucked into the litigation vortex. Looking forward to letting the courts sort it out.

  2. @IC_deLight: Thanks for the comment, I hope it sparks dialogue here. The issue of the land’s real value and the Save Our Springs (SOS) bankruptcy case were issues we briefly touched on, but did not greatly explore, in the above article, which may be long enough, frankly, without those explorations. If this subject has not been made moot by the closing of the land deal, and nothing comes of the SOS easement issue in the wake of the bankruptcy hearing, then perhaps we can look at those two issues in more detail. In a shorter article.

  3. “Austinites Rob Haug and Vince Wood, the principal members of Westridge JV”- also the controversial developers of Windemere ranch in San Marcos.

    They must buy a lot of environmentally sensitive areas and then hold citizens hostage by threatening to develop the areas in destructive ways.

    Capitalism at its best.

  4. Take a close look at the way SM has done business for the last decade–cheap land unsuitable for development under any rationale scheme is bought with either adjacent or nearby acreage. Then we end up with new “open space” and nearby highly salable land, but which requires major regulatory compromises and possibly more government spending. Thus we pay twice, or once to an owner/set of owners locally and once to a shadow from the Metro. It has become quite the fad, with various experienced City Staffers having their objections or reservations “gagged.” And thus does a land-use issue become a money and political issue. But at least we get some rugged or flood-prone land uncovered by structures.

    And if the Land Development Code precludes such a plan, all one has to do is get a P&Z generous with variations, use a loophole, or re-write that section of the LCD. It’s not only IN the Record (no, not that one); it IS the record. There are even people and a methodology ever-ready to confuse the data and facts as the discussion goes along.

  5. The “we can’t develop the land if you don’t grant the variances” line gets pitched to P&Z (and the City Council) on a regular basis. It seems to work (achieving approval for the variances) more often than not.

  6. And they always say “I believe in private property rights.” Well, if the current code doesn’t allow for that land use and your belief in private property rights leads you to grant a variance, aren’t you legislating from the bench. What about the neighbors private property rights? The one who bought the land under the code and didn’t ask for any special treatment? Swindels and new speak lexiconvicts, if you ask me, but I know they won’t.

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