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The Save Our Springs Alliance (SOS), People Organized in Defense of the Earth and her Resources (PODER) and Austin residents filed a civil lawsuit late Friday challenging a City of Austin development agreement for East Austin’s 2,600-acre Dog’s Head development. Plaintiffs claim that the city unconstitutionally diverted public funds to Dog’s Head, while improperly conceding legislative oversight to its developer: Endeavor Real Estate Group.
The city entered into a Dog’s Head development agreement with Endeavor in May followed by a July Tax Increment Reinvestment Zone (TIRZ) deal to finance development. The TIRZ reinvests most of the growth in property and sales taxes on the Colorado River’s Dog’s Head peninsula in infrastructure projects there for 35 years. Seventy-five percent of additional taxes will be diverted to Endeavor for the first 20 years and 66% for the remaining 15 years.
Without the TIRZ, those taxes would go into Austin’s general fund to finance public safety, parks, libraries and other amenities citywide. The city estimates the TIRZ could capture $1.75 billion in tax value, though the true value remains to be seen.
“We actually have no idea how much the rebate will actually be since the rebate commitment is not capped and expressed only as a percentage of future taxes generated on the Dog’s Head land,” Bobby Levinski, a senior staff attorney with SOS, stated in a press release.
Dog’s Head sits along the only free-flowing section of the Colorado River south of the Longhorn Dam and its banks are part of the endangered Blackland Prairie ecosystem. The site has been heavily used for gravel and mining operations, leading Endeavor lobbyists to describe it as “blighted land” that would never have been developed “but for” a TIRZ.
“I’ve been accused of saying that this is a bombed out mine pit. Well, I stand by that,” Richard Suttle, a lawyer representing Endeavor, told the city council on July 23. “Virtually all this agreement does is provide for a mechanism for our city to extend infrastructure so that development can occur.”
The Texas Constitution generally prohibits city governments from administering public tax dollars directly to developments or corporations, with one exception. If a development of a site would not occur “but for” the investments of public funds, the Texas Tax Code allows a city to create a “tax increment reinvestment zone” (TIRZ) to finance the development of such infrastructure as roads and utility lines.
Plaintiffs maintain that Dog’s Head does not meet that “but for” exception because that property situated between downtown and the Tesla Gigafactory will develop with or without the TIRZ. They argue city staff admitted development would proceed there without a TIRZ and that Endeavor bought Dog’s Head land tracts and started construction before signing any deals with the city.
The Dog’s Head deal turns “a narrow exception meant for genuinely unproductive, underdeveloped, or blighted areas into a lucrative handout to wealthy corporations that don’t need Austin’s tax dollars,” the plaintiffs’ press release states.
The plaintiffs also argue that the city violated constitutional law by surrendering its legislative authority over the site, granting Endeavor “veto power over future efforts by City Council members or Austin voters to strengthen Colorado River protections or change other regulations affecting the Dog’s Head area,” according to the press release.
“The Texas Supreme Court has cautioned against schemes that hand legislative power to private landowners, whose profit-driven interests inherently conflict with the public welfare those laws are meant to protect,” Levinski stated.
City council members who supported the deal paint it as a generational economic opportunity for the city. “This creates the foundation for a dense, tall urban development that generates tax money to support city services in future years. We are investing in ourselves and our future,” District 4 Council Member José “Chito” Vela wrote in a July 23 Facebook post.
The Austin City Council fast-tracked and unanimously approved the Dog’s Head development without the checks and balances that city boards and commissions typically provide. Notably, long-standing environmental and site development regulations for the project were waived. Community leaders said the development will accelerate the displacement of African American, Hispanic and lower-income people who live in or near Dog’s Head.
“Austin families are being priced out of the city,” PODER Executive Director Susana Almanza stated in the press release. “The last thing Austin should be doing is diverting billions in future public revenue to subsidize private development that was already moving forward.”
Many environmentalists, residents and critics have pointed out what they regard as shortcomings in the agreement. The deal allows Endeavor to develop Dog’s Head as mixed-use with 10% open space but minimal environmental protections, permits 79% impervious cover, and allows construction 200 feet from the Colorado River’s critical water quality zone. It also allows modifications to the floodplain.
“It’s horrifying what was approved,” Levinski wrote in the release. “The Development Agreement relaxes water quality standards, grants permission to build anything from data centers to industrial manufacturing along the river, and binds the council to approve zoning that conforms to it.”
The agreement contains an affordability commitment for 20% of any housing that gets built, but it does not mandate the construction of any housing. This has drawn criticism over displacement threats to Dog’s Head, as most current residents are lower-income people of color.
Under the development agreement, Endeavor can petition to remove the Dog’s Head from the city’s jurisdiction, at which point no tax revenue would go to the city and only essential services would be provided.
“The reality is that without this deal, you lose,” District 5 Council Member Ryan Alter wrote in an Austin Free Press opinion article. “You lose tax dollars that won’t support our City. You lose parks, open space, and environmental protections. You lose contributions that support transit.”
The city previously created the South Central Waterfront TIRZ around the former Austin American-Statesman property located where Congress Avenue hits the south shore of Lady Bird Lake. Chief beneficiaries of that designation would have been Endeavor and the Statesman’s former owners: the billionaire Cox family.
Responding to a lawsuit filed by Save Our Springs and Austin residents, however, a Travis County District Court struck down that TIRZ in 2024, finding that the South Central Waterfront did not meet the TIRZ law’s “but for” exception.
Piper Guinn is the health equity reporter for the Austin Free Press, covering the disproportionate health burden carried by the city’s most vulnerable. Piper is a native Texan and recent graduate of Whittier College, where she received a B.A. in political science.
Disclosure: Save Our Springs Alliance Executive Director Bill Bunch is a member of the Austin Free Press Advisory Board.
Support for the Austin Free Press’ reporting on government accountability and watchdog reporting comes from the Cynthia and George Mitchell Foundation. Sponsors do not influence AFP’s editorial decisions.
