The city of Bee Cave plans to add nearly 400 acres into its extraterritorial jurisdiction, or ETJ, including a proposed mixed-use project, Sweetwater East, on the south side of Hwy. 71 adjacent to the Lake Travis ISD bus depot. A city’s ETJ lies outside of city boundaries and does not receive city services but is able to be annexed into city borders under certain conditions.[polldaddy poll=9270939]
Bee Cave City Council approved a development agreement Dec. 8 between the city and WS-COS Development partners, which also does business as Wheelock Street Capital and is the developer for the Sweetwater project; the Lazy Nine Municipal Utility District No. 1A, which provides water and wastewater service to Sweetwater; and Matthews-Barnes Brothers Investment, which represents Covert Automotive Group.
The project will also include a proposed Covert automotive dealership, a facility which residents strongly opposed two years ago. 
Development agreement terms
Under the agreement, the Lazy Nine MUD 1A will annex the 393-acre tract, and since the tract is outside the jurisdiction of any city, select Bee Cave’s ETJ as the tract’s designated jurisdiction. The parcel will then become part of Bee Cave’s ETJ instead.
“[This agreement] will give us a lot more authority to regulate this land because it’s not in our ETJ now, and we wouldn’t have any authority if it were not for the agreement,” Bee Cave City Attorney Patty Akers said.
The tract is planned to be developed in a style similar to the western Sweetwater development under construction and slated to include a residential component—single, patio and/or
multifamily homes—as well as possibly an assisted-living facility, an active adult community, office space and retail, WS-COS development managing member Mike Rafferty said. A section of the agreement outlines development standards the project must meet.
“It has been a complex [process to produce the Sweetwater East development agreement], but we think that it is truly a win-win for all of us,” Rafferty said.
The Sweetwater East development will constitute the commercial component of the Sweetwater project, with the existing Sweetwater component comprising part of the project’s residential portion, Akers said. The lengthy development agreement—including 13 exhibits—illustrates the intended quality of the project, which is important to the developers who want to preserve the value of the existing residential portion, she said.
“This development agreement provides an alternative to typical city regulatory processes for development in its ETJ,” stated the council’s Dec. 8 agenda materials. “It encourages innovative and comprehensive planning of the [MUD] tract while providing for certain regulatory requirements throughout the term of this agreement. The development agreement encourages the creation of a high-quality community for the benefit of the present and future residents of the city and the project.”
Although the new property will be located in the city’s ETJ, under the terms of the agreement, Bee Cave cannot annex the tract into its full-service borders until either Dec. 8, 2045, or until the vast majority of the project’s infrastructure, parks and recreation facilities are complete—whichever occurs first.
“I think [Akers has] really outlined [in the agreement] the high points that we’ve been working on toward meeting some of our city goals as well as working with the developer to have a project that is synergistic with the city of Bee Cave even though it won’t be within the city limits,” Bee Cave Mayor Caroline Murphy said. “There’s a lot of mutual consensus that this is a good thing for all of the parties.”
Development standards
An architectural committee will be formed to review applications for developing parcels within the tract and ensure the Sweetwater development standards set out in its master development agreement are maintained.
WS-COS Development agreed to comply with Bee Cave’s ordinances with a couple of exceptions, Akers said. However, construction standards for the subdivision’s streets and public works will be governed by Travis County, she said.
Automobile dealership
The development agreement also provides that Covert—which purchased a 32-acre parcel in the new tract from WS-COS Development in July—may construct an auto sales and service center on the site. However, as a condition of Covert buying and building on its new parcel, the original 23-acre tract Covert owns on West Hwy. 71 just outside the Falconhead West neighborhood will be zoned as neighborhood services and not for automobile service uses.
“There were a lot of negotiations that took place regarding the types of uses, the quality of development, the nature of the development, and the process by which the development would be approved and how it would fit within the Hill Country scheme and the community of Bee Cave,” Akers said.
In 2013, Covert’s proposal for a dealership on its tract outside Falconhead West was met with vocal opposition from residents citing lighting, noise and safety issues from cars test driving in the neighborhood. Council Member Kara King, a resident of Falconhead West, opposed the original Covert dealership site abutting the neighborhood.
“It’s been two long years, but [the agreement] is a positive direction,” she said.
Covert dealership principals agreed to “some significant setbacks” from Hwy. 71 in order to build the automotive facility on the Sweetwater East tract, Akers said. By agreement, the automotive center will be the only automotive service provider allowed on the property, she said.
“[The Covert family] regret[s] that we had a controversial time the last time we appeared before the council on the other tract,” Covert Automotive Group attorney Mike McKetta said to Bee Cave City Council. “[The family] appreciate[s] the work that has occurred over the last year and a half and looks forward to a healthy relationship.”
What’s next?
The LTISD tract—including its bus depot—will be annexed into Bee Cave’s ETJ along with the new Sweetwater tract but will not be subject to any terms of the development agreement.
The city of Bee Cave and Lazy Nine MUD 1A will sign a strategic partnership agreement outlining the land ownership changes of Dec. 8, with required public hearings set by Bee Cave City Council for Jan. 26 and Feb. 9.
“It’s nice to have a pathway to a future solution,” Murphy said.
