Developer Wants to Remove Part of South Austin District from ETJ

The lead applicant, a developer whose company owns several plots of land in the area, wants to build a pedestrian path, citing ongoing pedestrian safety and accessibility issues in the area.

A portion of South Austin on Menchaca Road south of Slaughter Lane could be removed from the extraterritorial jurisdiction of the city of Austin under a new Texas law.

These jurisdictions, which encompass unincorporated areas within a 5-mile radius of Austin city limits, do not pay city property taxes but receive some city services and comply with certain city regulations, such as environmental and infrastructure policies.

The law — Senate Bill 2038 by Sen. Paul Bettencourt, a Houston Republican — requires cities like Austin to release land in an ETJ if a property owner’s petition meets certain requirements or allows registered voters in an ETJ to petition for an election on the issue.

Until recently, all cases under the new law involved direct waiver petitions, meaning the Austin City Council didn’t have to step in and the waiver was handled by the city secretary, according to a July 23 memo from Austin Planning Director Lauren Middleton-Pratt to Mayor Kirk Watson and City Council members.

However, a petition filed June 7 that seeks to remove about 96 acres of land from the South Austin ETJ could soon be on the ballot because the area “contains multiple parcels of land that are not owned by the petitioner,” according to Middleton-Pratt’s memo. The petition includes mostly commercial properties, a few single-family homes and one multifamily property.

James Stinson, a developer whose company owns several parcels of land in the area and who is the main contact for the petition, told the American-Statesman that he is seeking to have the land removed from the ETJ because he is in the process of building an Americans with Disabilities Act-compliant pedestrian path.

Citing ongoing concerns about public safety and accessibility, Stinson said the length of the permitting processes for development in the ETJ, which he said is two years or more, “is not going to work when lives are at stake.” Stinson suggested the permitting process could be faster if the land were not part of the ETJ.

“We’ve had five or more pedestrian deaths over the last few years due to pedestrians being crushed by cars in the immediate area,” Stinson told the American-Statesman in a written statement. “Currently, the ETJ area has no sidewalks, which makes it really difficult for people who need ADA accommodations to get around freely.”

The petition was signed by James Stinson, William Stinson and Albert J. Klinkovsky, according to a copy of the document obtained by the Statesman through the Texas Public Information Act. James Stinson is a principal developer at Austin NNN, a real estate investment and land development firm that operates in the Greater Austin area, according to the company’s website.

Austin NNN was one of several property owners and bars in the area who planned to invest more than $270 million to redevelop the area south of Slaughter Lane at Menchaca Road into a mixed-use neighborhood called the South Austin Entertainment District, connected by a nearly 1-mile-long trail, the Austin Business Journal reported in November 2023. The section of Menchaca Road where several of the bars are located is unlit and has no sidewalks.

The company owns about 28 parcels in the “immediate area,” James Stinson told the Statesman in a written statement, some of which are in the petition area and others on Allred Drive, Riddle Road, Slaughter Lane and Old Manchaca within the full Austin city limits. The company does not plan to build multifamily units on any of the parcels it owns in the area, but it does plan to build 14 more restaurants and parking lots over the next few years.

Stinson said he wants to complete “a pedestrian path to allow area residents and customers to access new locations along Menchaca Rd.”

“This ETJ filing is a process that we believe will help all of us realize the creation of this trail sooner rather than later as we work through landowner agreements and county permits for various sections of the trail,” Stinson said in a statement.

According to Middleton-Pratt’s memo, the new law gives the City Council the authority to decide in such cases whether to hold an election or vacate the property.

If the City Council decides to hold an election, “only registered voters residing in the designated area will be eligible to vote,” the memo states. If the City Council decides not to hold an election, city staff will prepare a motion for the council to vacate the area before the Nov. 5 general election.

Property owners have already used this law to be removed from Austin’s ETJ. Earlier this year, Tesla successfully freed its large factory campus from Austin’s ETJ and therefore no longer has to comply with several Austin environmental regulations, including those regarding water use and air quality.

The Texas Local Government Code originally granted cities the authority to regulate extraterritorial jurisdictions “to promote and protect the general health, safety, and welfare of the persons residing in and adjacent to the municipalities.” However, Bettencourt argued that this broad authority for municipalities “opened the door to abuse,” as stated in a May 2023 press release issued by his office after his legislation was passed, before it was signed by Gov. Greg Abbott.

Bettencourt framed his bill as “no regulation without representation,” since ETJ residents cannot vote in most municipal elections and have no elected representation in local governing bodies.

As the Austin Business Journal reported in December 2023, various Texas cities, including nearby Hutto and Lockhart, joined a lawsuit challenging the new law.