02 C14-2025-0064 - Circle C Tract 110; District 8 - Protect Circle C Coalition Letter — original pdf

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August 12, 2026 Via Email Mayor Kirk Watson Members of the Austin City Council Trish Link and AJ Urteago, City of Austin Legal Department Nancy Estrada, Zoning and Platting Commission City of Austin 301 W. 2nd Street Austin, TX 78701 Re: Case No. C14-2025-0064, scheduled for ZAP hearing (August 18, 2026) and City Council vote (September 10, 2026) (1) Challenge to the Unauthorized Recording and Validity of the First Amendment to the Amended and Restated Declarations of Restrictive Covenants (2) Request for Postponement of the August 18, 2026 ZAP Hearing and the City Council Vote Currently Scheduled for September 10, 2026 (3) Request for No Action on the Zoning Request and the Fourth Amendment to the 2002 Development Agreement and Ordinance No. 020801-31 (Circle C Ranch) Dear Mayor Watson, Members of the City Council, Ms. Link, Mr. Urteaga and Ms. Estrada: We write as concerned residents and members of the Protect Circle C Coalition to urgently request that the Zoning and Platting Commission postpone its August 18, 2026 hearing in Case C14-2025-0064, and that the City Council take no action on the Stratus zoning request at its September 10, 2026 hearing or any subsequent hearing. Basis: The case relies on a restrictive covenant amendment, the validity of which, the Circle C residents are actively challenging, and it has since it has come to light that it was filed without authorization. See specifically the details for July 29, 2026 and July 31, 2026 below. Background The Circle C HOA and Stratus Properties are parties to an Amended and Restated Declarations of Restrictive Covenants, dated September 9, 2011, which prohibits vehicular access to Dahlgreen Avenue from Tract 110. That covenant is central to the zoning application Stratus has filed in this case: Stratus wants Dahlgreen to serve as a full residential access point for its proposed 1,000-unit multifamily development. Dahlgreen has been deliberately protected since 2002 because it is a cross street and school zone for Kiker Elementary School, and Circle C residents oppose opening this two-lane interior residential street to development traffic. 02 C14-2025-0064 - Circle C Tract 110; District 81 of 23The chronology below explains why the validity of the covenant amendment is now in dispute: ● May 2025 – Stratus files its zoning conversion application requesting upzoning from office to multifamily for its proposed development of Tract 110 in Circle C. Note: this case pre-dates the effective date of SB 840. ● September 2025 after SB 840 went into effect (approx.) — In its update conversations with the CCHOA, Stratus told the CCHOA that SB 840 applied to its upzoning request for Tract 110. (This was false — Circle C is governed by the 2002 Development Agreement, to which SB 840 does not apply. Additionally, SB 840 was not intended to apply to zoning requests retroactively, and this zoning case was filed in May 2025.) ● September 22, 2025 — Stratus via its agent, Drenner Group, requested (through Nancy Estrada) a City of Austin Legal interpretation of the applicability of SB 840 in the zoning case. The City of Austin Legal Department interpretation stated that SB 840 did not apply because the 2002 Development Agreement governed development in Circle C. (see Attachment A, City of Austin Legal interpretation of the applicability of SB 840). ● November 2025 – January 2026 — Over the next few months, relying on Stratus's continued false representation that SB 840 applied to the zoning case for Tract 110, the CCHOA Board voted to take certain actions in support of Stratus’s zoning request, having been told it had no other options because of SB 840. ○ On December 10, 2025, the Board sent a letter to the City of Austin, indicating it would not oppose the zoning request because of the applicability of “recent State Law changes”. ○ On January 28, 2026, the Board voted to amend the restrictive covenant and grant Stratus the access point it sought on Dahlgreen. Language included in the amendment stated “Paragraph 7.B. of the Declaration provides that the Declaration may be amended with the consent of the owners of seventy-five percent (75%) of the aggregate of the Property (as defined in the Declaration) and CCHOA (whose consent shall be expressed through the approval of a majority of the Board of Directors of CCHOA).” While the CCHOA Board voted to approve the amendment on January 28, 2026, it withdrew its approval of the amendment on July 29, 2026 (see below) upon learning of misrepresentations made by Stratus. The amendment also contained a provision stating it would become effective upon recording with the Travis County Real Property records. It remained ineffective and unrecorded until July 31, 2026, when it was filed electronically by some unknown individual. ● May 5, 2025 ZAP Hearing – Despite having received the City of Austin Legal Department interpretation stating SB 840 did not apply, the Drenner Group continued to cite it as the basis for the zoning conversion during the ZAP hearing (see Attachment B, Screenshot of Drenner Group May 5th ZAP presentation, as well as hearing playback at minute 8:30 https://austintx.new.swagit.com/videos/385884). The Zoning Change 2 02 C14-2025-0064 - Circle C Tract 110; District 82 of 23 Review Sheet itself also referred to applicability of SB 840 to this case, even though Nancy Estrada facilitated and received a copy of the City of Austin Legal interpretation that stated otherwise. ● May 14, 2026 — The Protect Circle C Coalition submits a Public Information Request. ● May 21, 2026 — Following the May 5, 2025 ZAP hearing, Lisa Lyons with the Protect Circle C Coalition raised concerns directly with Stratus about the possibility of a premature recording of the covenant amendment. The Coalition requested assurances that Stratus would only file the covenant amendment in the event of City Council’s approval of the zoning request. Stratus's Melissa Neslund confirmed in writing that Stratus would not record the amendment unless the City Council approved both the Dahlgreen connection and the zoning request (see Attachment C, May 21, 2026 email from Melissa Neslund to Lisa Lyons). ● June 26, 2026 — Drenner Group provides Lisa Lyons with a copy of the September 22, 2025 City of Austin Legal Department interpretation after multiple requests. ● July 29, 2026 — At the regularly scheduled HOA meeting, the Protect Circle C Coalition and residents presented the CCHOA Board with information showing Stratus had concealed the September 22, 2025 legal interpretation, as well as other mischaracterizations relating to the case. Based on the information presented, the CCHOA Board unanimously voted to withdraw its approval of the covenant amendment. ● July 30, 2026 — The Protect Circle C Coalition receives the first batch of documents responsive to its PIR. ● July 31, 2026 — Two days after the CCHOA Board voted to withdraw approval of the restrictive covenant amendment, it was recorded electronically with the Travis County Real Property Records as Instrument No. 2026091422. The Travis County Clerk was unable to identify who initiated the recording, stating only that it was submitted through Simplifile. Our HOA manager has confirmed the CCHOA did not initiate the recording, leaving the remaining parties - Stratus, its law firm (Armbrust & Brown), the Drenner Group, or some other unknown party as probable actors (see Attachment D, First Amendment to the Amended and Restated Declaration of Restrictive Covenants). Because the amendment was recorded on July 31st after the CCHOA Board had voted to withdraw its approval on July 29th, its validity is being challenged by the CCHOA and the residents, separately. The CCHOA Manager has confirmed that the CCHOA’s legal counsel is challenging the recording of the amendment (see Attached E, email between Karen Hibpshman and Lisa Lyons, dated August 10, 2026). The Circle C residents, who will be irreparably harmed by the recording of the amendment, also intend to challenge the validity of the amendment and are examining all available legal avenues. Separate from, but related to, the zoning application are the proposed Fourth Amendment to the 2002 Development Agreement and Ordinance No. 020801-31, which we understand are being processed concurrently with the zoning case. This matter is currently scheduled for Zoning and 3 02 C14-2025-0064 - Circle C Tract 110; District 83 of 23 Platting Commission consideration on August 18, 2026, and for City Council consideration on September 10, 2026. Requested Action The zoning request, the proposed Fourth Amendment, and the ordinance all rely on, and are premised on the validity of, the First Amendment to the Restrictive Covenants for Tract 110. Because each depends on a covenant amendment whose legal effect is presently in dispute, any Council action taken now would rest on an unresolved and contested legal foundation. Proceeding with the ZAP hearing, or entertaining the zoning request or the Fourth Amendment, while this challenge is pending would be premature and could cause significant harm to residents, including: ● Council action based on a restrictive covenant amendment that may ultimately be invalidated or substantially modified; ● Confusion and inconsistency between the City's development regulations and the governing covenants applicable to the community; and ● The need to potentially revisit or unwind City action if the underlying covenant recording is set aside or amended as a result of the pending challenge. We are not asking the City to take a position on the merits of the HOA’s or the residents' challenge to the recorded First Amendment. We are asking only that the City defer action on the zoning case, the Fourth Amendment, and the ordinance until that underlying dispute is resolved, so that any Council decision rests on a settled and undisputed legal record. This request for postponement does not prejudice the applicant, but to deny the request causes irreparable harm to residents of Circle C. We further request that the Protect Circle C Coalition be formally noticed of: ● Any change to the August 18, 2026 Zoning and Platting Commission hearing date or the September 10, 2026 Council hearing date, including any rescheduling; and ● Whether the zoning request, the Fourth Amendment, and the ordinance are, or are not, planned to be considered contemporaneously by the City Council. Residents are entitled to know whether these matters will be taken up together or separately so that they can meaningfully participate in whichever hearing or hearings are relevant to their interests. We appreciate the City's attention to this matter and would welcome the opportunity to discuss 4 02 C14-2025-0064 - Circle C Tract 110; District 84 of 23 these concerns further before the scheduled hearings. Please direct any questions or correspondence regarding this request to the undersigned. Respectfully submitted, Protect Circle C Coalition Lisa Lyons Tammy Boehman Anna Elisa Baker Kristen Devick Fares Bagh Jennifer Leeper Alicia Keswani Denise Waid Richard “RJ” Jackson Kraig Kujawa 5 02 C14-2025-0064 - Circle C Tract 110; District 85 of 23 Attachment A City of Austin Legal interpretation of the applicability of SB 840 6 02 C14-2025-0064 - Circle C Tract 110; District 86 of 23 On Sep 22, 2025, at 5:42 PM, Estrada, Nancy <Nancy.Estrada@austintexas.gov> wrote: Hi Kate, The Law Dept. has provided the following responses concerning SB840 and the Circle C rezoning case and Development Agreement amendment. 1. Zoning Conditional Overlay: SB 840 supersedes a conditional overlay (CO) that prohibits multifamily residential use or mixed-use development use as defined in SB 840. But for the Circle C Development Agreement, multifamily residential use or mixed-use development use is allowed when developing under SB 840. 2. Development Agreement: The Circle C Development Agreement is not superseded by SB 840. To allow for multifamily residential use or mixed-use development use on the subject property, the Circle C Development Agreement must be terminated or amended to allow this type of development. The Circle C Development Agreement is not a zoning regulation. The Circle C Development Agreement is a bi-lateral agreement which requires consent of both the property owner and City. Please let me know if you have any questions. Thanks! Nancy <image001.png> Nancy Estrada Planner Principal, Current Planning Division Planning Department 512-974-7617 nancy.estrada@austintexas.gov 02 C14-2025-0064 - Circle C Tract 110; District 87 of 23 Please note: E-mail correspondence to and from the City of Austin is subject to required disclosure under the Texas Public Information Act. From: Kate Kniejski Sent: Friday, September 12, 2025 10:43 AM To: Estrada, Nancy <Nancy.Estrada@austintexas.gov> Cc: Amanda Swor Neslund, Melissa ; Adler Schneider, Kylie Subject: SB-840 Interpretation Request: Circle C Tract 110 Zoning and Development Agreement External Email - Exercise Caution Hi, Nancy: I am writing to request an interpretation from the City of Austin Law Department of Senate Bill 840 (SB-840) as it relates to (1) zoning conditional overlays and (2) existing development agreements. 1. Zoning Conditional Overlay We represent the property owner of the Circle C Tract 110 property (the “Property”), addressed as 11010 1/2 S. Mopac Expy. The current zoning designation of the property, CS-MU-CO (General Commercial Services – Mixed Use Combining District – Conditional Overlay), prohibits multifamily residential uses per a conditional overlay, see Part 2.10 of Ordinance No. 020801-31 (files linked here). We submitted a zoning application to remove this prohibition of multifamily residential condition, per City of Austin case number C14-2025-0064. SB-840 permits multifamily residential uses in zoning classifications that allow office, commercial, retail, warehouse, or mixed-use or development as an allowed use under the classification. The CS zoning classification meets the above requirements SB-840 of allowing commercial uses. We would like to request an interpretation from the Law Department of the effect of SB-840 on zoning conditional overlays placed on commercial base districts which prohibit multifamily residential uses, as is the case under Part 2.10 of Ordinance No. 020801-31. 2. Development Agreement 02 C14-2025-0064 - Circle C Tract 110; District 88 of 23 In connection with the zoning case C14-2025-0064 (described above), we submitted an amendment to the existing Circle C Development Agreement, Instrument No. 2002151984 of the Travis County Real Property Records (and later amended under Instrument Nos. 2004135909, 2004236024 and 2005054993, Travis County Real Property Records) to allow multifamily residential uses on the Property, and to amend the density limitation of residential uses to permit a future multifamily residential project on the Property. The original Development Agreement and subsequent Amendment instruments are also linked here. We would like to request an interpretation from the Law Department of the effect of SB-840 on the Circle C Development Agreement, as amended, as it relates to the multifamily residential use and density limitations on the Property. I appreciate your time and attention to this request, please do not hesitate to contact me with any questions. Thank you, Kate Kniejski, AICP | Senior Project Manager Drenner Group, PC | 2705 Bee Cave Road | Suite 100 | Austin, TX 78746 Office: (512) 807-2900 | Direct: (512) 807-2905 | www.drennergroup.com CAUTION: This is an EXTERNAL email. Please use caution when clicking links or opening attachments. If you believe this to be a malicious or phishing email, please report it using the "Report Message" button in Outlook. For any additional questions or concerns, contact CSIRT at "cybersecurity@austintexas.gov". CAUTION: This is an EXTERNAL email. Please use caution when clicking links or opening attachments. If you believe this to be a malicious or phishing email, please report it using the "Report Message" button in Outlook. For any additional questions or concerns, contact CSIRT at "cybersecurity@austintexas.gov". CAUTION: This is an EXTERNAL email. Please use caution when clicking links or opening attachments. If you believe this to be a malicious or phishing email, please report it using the "Report Message" button in Outlook. 02 C14-2025-0064 - Circle C Tract 110; District 89 of 23 Attachment B Screenshot of Drenner Group May 5th ZAP presentation 7 02 C14-2025-0064 - Circle C Tract 110; District 810 of 23 02 C14-2025-0064 - Circle C Tract 110; District 811 of 23Attachment C May 21, 2026 email from Melissa Neslund to Lisa Lyons 8 02 C14-2025-0064 - Circle C Tract 110; District 812 of 23 02 C14-2025-0064 - Circle C Tract 110; District 813 of 2302 C14-2025-0064 - Circle C Tract 110; District 814 of 23First Amendment to the Amended and Restated Declaration of Restrictive Covenants Attachment D 9 02 C14-2025-0064 - Circle C Tract 110; District 815 of 23 02 C14-2025-0064 - Circle C Tract 110; District 816 of 23 02 C14-2025-0064 - Circle C Tract 110; District 817 of 23 02 C14-2025-0064 - Circle C Tract 110; District 818 of 23 02 C14-2025-0064 - Circle C Tract 110; District 819 of 23 02 C14-2025-0064 - Circle C Tract 110; District 820 of 23 Attachment E Email between Karen Hibpshman and Lisa Lyons, dated August 10, 2026 10 02 C14-2025-0064 - Circle C Tract 110; District 821 of 23 02 C14-2025-0064 - Circle C Tract 110; District 822 of 2302 C14-2025-0064 - Circle C Tract 110; District 823 of 23