Austin Suburb Bee Cave Ramps up Battle with Velocis

The city of Bee Cave has ramped up its legal battle to stop the construction of a large industrial development planned near the affluent Austin suburb.

In an updated legal filing, the city of Bee Cave alleges that Velocis, the Dallas-based developer behind the 270,000-square-foot West Austin Business Park, deliberately concealed the true nature of the development, which the lawsuit claims could bring “irreparable harm” to the community, the Austin Business Journal reported.

The city contends that Velocis, led by co-founders Mike Lewis and Fred Hamm, left local officials “in the dark” for more than a year by providing incomplete and misleading information regarding the development.

“Instead, defendants’ tack was to dribble out incomplete information in a belated and informal manner to create a false narrative of good intentions, while hoping to argue that their untimely and deficient disclosures somehow constituted adequate notice to the city,” the filing stated.

The dispute centers around a 2015 development agreement between Bee Cave and WS-COS Investments that outlined plans for a residential and commercial project on the 23-acre site, near State Highway 71 and Sweetwater Village Drive. The city claims that industrial use violates the agreement.

Bee Cave also accuses an independent three-person Design and Review Committee of “rubber-stamping” the plans without proper scrutiny. The city alleges that the committee members have been kept secret, raising further questions about transparency in the development process.

Velocis, which acquired the land last year. Because the site is in Bee Cave’s extraterritorial jurisdiction and not within the city limits, Velocis maintains that it is not subject to the city’s zoning ordinances.

The firm has expressed a desire to find an amicable solution, offering mediation with Bee Cave and neighboring suburb Lakeway, to settle complaints about its West Austin Business Park development. Velocis declined to comment on the updated lawsuit.

The controversy has also drawn criticism from nearby property developers. Eppright Homes, a builder active in the upscale Madrone Canyon neighborhood near the business park, claims that it was similarly misled about the project’s scope.

Eppright CFO Katie Zunker believes the developer intentionally kept everything vague and under wraps to push the project through as quickly as possible, concealing it from the public and the community, only to apologize after the fact. Home sales in Madrone Canyon have stalled since construction on the business park began, she said.

“The only remedy to the situation is for the West Austin Business Park to be torn down,” Zunker said.

The city of Bee Cave has stated in its court filings that the industrial development poses a significant threat to the area and is seeking an injunction to halt construction immediately.

— Andrew Terrell