Business owners and staff of 10 local businesses at the Crestwood Center on Old RR 12 in San Marcos face an uncertain future as closure could be on the horizon as a result of water shutoff by the city.

Initially set to shut off March 18, the city has granted the Crestwood Center an extension through March 31.

The businesses are:
  • AJ's Ranch Road Grill;
  • Gray Horse Saloon;
  • Iglesia Cristiana Vida Nueva;
  • Meadows Insurance Agency;
  • The Pita Shop;
  • Peachy Clean/Cabana Clean;
  • Shaolin-Do School of Martial Arts;
  • Steger's Chiffonade;
  • Studio San Martian; and
  • Three Six General.

The shopping center runs off a septic system for wastewater, which is out of compliance and poses a health and safety risk to the community, San Marcos Director of Communications Lauren Surley told Community Impact in an email.

“In response to the ongoing health and safety risk the failed septic system poses to the community, there is a potential that the city of San Marcos will be forced to cut off water service to the shopping center, but that decision is still pending action on the part of the property owners,” Surley said.

In March 2022, Tom Holman, one of the property owners of the land and business next to the Crestwood Center, went before the City Council to request annexation into the city.

“We’re asking for annexation because we have an agreement that I didn’t realize when we bought the property with the adjacent property owner, and we have to process all their sewer on-site. It’s become a problem; the septic system is obsolete, and it's overflowing,” Holman said. “By annexing, we’ll be able to tie into the city sewer line. ... At that point, we’ll be able to force the adjacent property owner to abandon our septic system as well, and we’ll be able to shut it down.”

James Umstattd and Thomas Umstattd are the owners of the Crestwood Center, filed under the business name UC2 LTD, according to documentation from the city of San Marcos and the Hays County Appraisal District.

On March 18, 2022, the Umstattd’s were notified by lawyers representing Holman’s company, Holman Farrar Holdings LLC, that they would need to make arrangements for the Crestwood Center’s water and wastewater services.

“As part of our client's agreement with the city of San Marcos, they are required to terminate the easement agreement with you,” the statement read. “We are trying to give you as much notice as possible about the changes that are occurring. The city of San Marcos is willing to provide water and sewer services to your property at the same time they begin to service our client’s property.”

In the months that followed, tenants of the Crestwood Center received a letter from the Hays County Development Services Department notifying them of the septic system issue.

“This existing septic system is failing and is planned to be discontinued and abandoned as of March 18, 2023,” signed off by the county’s Chief Environmental Health Specialist Eric Van Gaasbeek.

Van Gaasbeek was not available for comment as of press time.

Mattison Bills, owner of Three Six General in the Crestwood Center, wrote a statement about the ongoing situation to her business's website.

"After getting two quotes from engineers, it's certain to cost $1 million to connect to the city sewer. The city is willing to pay $500K and no more. Crestwood has secured $210K and they've managed to get written confirmation from Hollman to pay $100K," Bills wrote.

Christian Umstattd, property manager of the Crestwood Center, told Community Impact that they are working to raise the remaining near $200,000 in order to connect to the city's sewer system and keep the center in business.

"We are trying everything we can to keep the businesses running," Umstattd said. "We don't want it to go down."