By JONATHAN LEE, Austin Monitor

The Planning Commission threw a wrench into a business owner’s plans to cash out on his property and allow it to be developed, voting last week against removing a restrictive covenant that prohibits anything but a plant nursery.

The owners of the longtime tree nursery Ted’s Trees Ltd. – who happen to also be longtime Steiner Ranch residents – hope eventually to let the land be developed as housing, but the restrictive covenant, as well as site-specific zoning rules, stands in the way.

The tree farm sticks out in the mostly single-family neighborhood. Though the 3.78-acre tract at 1118 Tillery St. was originally zoned Family Residence (SF-3), during the drafting of the Govalle Neighborhood Plan in 2003, neighbors agreed to let the nursery’s zoning change to General Commercial Services – Mixed-Use (CS-MU) zoning – but only if the site was heavily constrained. This led to the restrictive covenant plus a conditional overlay, both of which essentially prohibit anything but a nursery. 

“He’s part of the neighborhood,” neighborhood activist Daniel Llanes said of Ted Lopez, the owner of Ted’s Trees. “We didn’t want to get in the way of his business.” Llanes participated in the neighborhood planning process and is currently chair of the Govalle-Johnston Terrace Neighborhood Plan Contact Team. 

Llanes said the neighborhood signed the restrictive covenant to prevent any development that isn’t single-family homes. The agreement says if the site is used for something other than a plant nursery, the city has the right to rezone the property to Single Family-Small Lot (SF-4A). Now that the restrictive covenant is under threat, Llanes and other neighbors oppose terminating the agreement so that the site won’t be developed in the future. “I don’t want (the neighborhood) to turn into apartment complex isolation with no political clout or anything,” Llanes said, saying he prefers single-family homes so the area is “on par with any other neighborhood in the central city.”

An online petition opposing the change has gained traction with nearly 300 signatures. The petition warns that removing the restrictive covenant will give the owners “a blank check to develop whatever they want.” Leah Bojo, representing the property owner, pointed out that the petition is misleading. “This is not a blank check to develop anything at all,” Bojo said. “That conditional overlay, which we are not touching – that is really where all the prohibitions on uses and things lie.”

While no development is imminent, removing the restrictive covenant is the first step in priming the property for development. The project is likely a residential project of single-family or “missing middle” density according to Bojo. If City Council removes the restrictive covenant, the developer will likely ask for a zoning change. 

One neighbor, Edgar Handal, did speak in favor of denser development in the area. “Whatever the path is to getting something more affordable and more dense there than what is currently built in the neighborhood, that’s really what I would like to see.” Handal noted that some single-family homes in the area sell for over $1 million.

While neighbors have also filed a formal petition to the city, it won’t force a supermajority vote at City Council. Only zoning changes – not restrictive covenants – force a valid petition. 

Adding to the case’s complexity, the city’s Law Department is not inclined to enforce the covenant, according to city staffers. This means that the city would likely not decide to change the zoning to SF-4A if the use on the site changes. Neighbors, on the other hand, insist the city must adopt SF-4A zoning if the use changes.

Planning commissioners were wary of recommending Council void a legal document that neighbors had trusted would be enforced. 

“If we want neighborhoods to engage in planning processes, if we want neighborhoods and developers and Council and this land use commission that we’re on to be able to find agreement, we can’t just willy-nilly start blowing up documents,” Commissioner Grayson Cox said. Cox’s motion to deny the termination of the restrictive covenant passed 10-0-3, with commissioners Awais Azhar, João Paulo Connolly and Rob Schneider abstaining.

The case now moves on to Council for a final decision. 

Austin Monitor, an online, nonpartisan, 501(c)3 nonprofit publication that covers local government and politics in and around Austin.