Lakeway officials approved several changes to plans for The Square at Lakeway mixed-use community at the Jan. 20 City Council meeting but held off on considering a proposed $47 million economic incentive package for the project.

The big picture

The 63-acre Square at Lakeway planned unit development, or PUD—formerly The Square at Lohmans—has been in the works at 1935 Lohmans Crossing Road since the 2010s. City Council approved PUD designation for the project in 2021, allowing for a mix of residences, office and retail, a new Main Street, and publicly accessible open space at the property.Austin-based Legend Communities formally broke ground on The Square in 2022 with an estimated one-year completion timeline for its first phase, but construction has stalled. Development planning remains in progress, and the project team recently requested its fourth amendment to the PUD outline, with several items receiving City Council's support this month.

Zooming in

Some changes to The Square at Lakeway PUD approved Jan. 20 were proposed by the development team, while some were set by council members. They included:

• Requiring the new Main Street accessible off Lohmans Crossing Road to be completed by Jan. 31, 2027—later than the previous June 30, 2026, deadline but ahead of the applicant's requested April 30, 2027
• Decreasing the project's office footprint by 10,000 square feet and increasing retail space by 72,000 square feet
• Allowing slightly less parking space for commercial areas
• Reducing the project's phasing from eight smaller portions to two main ones
• Requiring a majority of the project's eastern Phase 1 to be completed within five years, and western Phase 2 within 10 years

Some changes sought by the developer weren't accepted by council, like the addition of 44 for-sale or rental multifamily units across and a decrease in required parking tied to housing. The approved updates keep the project within previously approved daily traffic limits.

The Square's fourth PUD amendment passed 5-2, with Mayor Pro Tem Louis Mastrangelo and council member Matt Sherman voting against.

What they're saying

During council's discussion, some officials questioned the development team's repeated changes to project plans since 2023 and years of delays.

“My concern is just continual scope creep—that in a couple years the market changes again, we get a new PUD and the same valid argument for it, for a new PUD amendment five," Sherman said. "I’m done. I like it as it is.”

Legend founder and principal Haythem Dawlett defended the project timeline so far, saying construction had been disrupted by economic conditions and unforeseen utility issues at the property.

“When you move the utilities, it just doesn’t happen overnight. Everything else had to change, the plans had to be revised. ... That’s where we lost almost two years," he said. "Sequentially, the residential was the first phase, and then everything just backed up."

The Square's residential construction is now expected to kick off later this year, Dawlett said, followed by work on Phase 2 starting in late 2027.

Some officials had no issue with the extra multifamily housing proposed, given that buildings would still cover the same footprint on the property as originally planned. On the other side, Mastrangelo said community members wouldn't want to see the impact of dozens more units and residents.

“People don’t want density. Not because it’s more building; they don’t want the traffic, they don’t want the drain on resources. They just don’t want all that goes with it," he said. "It’s a little bit of this, a little bite of that, a little bite of that. Forty-four [units] is, what, 88 more residents, 40-80 more cars on the road. Nope, I think we’ve done enough.”

DTJ Design CEO Chris Moore, who's been involved with the project since the 2010s, said the call for an increase unit count across The Square's flats came as those residences were "right-sized” in development plans to support the community overall.

"We’re trying to get population in the square. People during the day, people at night help to activate the square, and more residents really help to promote that success of the square," he said.

Also of note

Council members were also posted to consider a multimillion-dollar economic development agreement in January, but it was withdrawn by the applicant.

The 35-year incentive deal under Texas' Chapter 380 program would have offered a series of city tax rebates to the PUD developer to support the project. Mayor Thomas Kilgore said the item could be considered down the road.

“There’s still an economic request out there, we did a lot of work on a 380 agreement. I’m not sure we really got anywhere; I think we learned we didn’t know what we didn’t know," he said.

After a brief debate without reaching council consensus, Kilgore closed discussion and said staff will return with updates in the future. Sherman also asked that Lakeway develop a broader Chapter 380 framework the city could apply to any future economic proposals.

“Withdrawn or postponed, my comment would still remain that I think we need a first foundational document, policy, consensus on what we want to see out of an agreement, what are some of the guardrails we want to have in place. And not try to do it on the fly based on this agreement," he said.