Real estate group says use of eminent domain at state park site sets 'dangerous precedent'

AUSTIN (KXAN) — The state's largest group of real estate professionals has called upon Parks and Wildlife leaders to reverse its decision to use eminent domain to take over a state park, saying the decision sets a "dangerous precedent."

The Real Estate Council, which calls itself the largest commercial real estate organization in Texas, sent a letter to the state's Parks and Wildlife Commission Tuesday, urging it to reconsider the planned use of eminent domain at Fairfield Lake State Park.

The Parks and Wildlife Commission voted June 10 to condemn the 5,000-acre property, which includes the 1,460-acre state park. The park, about 70 miles east of Waco, was leased to TPWD by Vistra Energy, which formerly owned a power plant on the lake, for about 50 years. The company sold the land to Todd Interests as of June 1, after years of failed negotiations with the state to purchase the property.

"Pursuing eminent domain at the expiration of a government lease creates a problematic precedent for property owners who lease to state agencies and for future real estate transactions related to these leases," wrote Linda McMahon, president and CEO of The Real Estate Council, in the letter.

"Allowing state agencies the power to do so without oversight and support from the Legislature is extremely troubling, and the local government where the property is located, Freestone County, does not support or endorse this action," McMahon said.

Freestone County Commissioners voted last week to send a similar letter to Parks and Wildlife commissioners, saying they were "extremely disappointed" and called the use of eminent domain an "infringement on private property rights."

A spokesperson for the Parks and Wildlife Department confirmed to KXAN the department did receive the letters but offered no comment in response.

Lawmakers did consider the use of eminent domain in this case earlier this year. Companion House and Senate bills failed to make traction, while another bill focusing on water rights at the lake passed the House but not the Senate.

Todd Interests, the new landowner, is turning the site into the 'Freestone' community, marketed as a "luxury lake and golf enclave encompassing the largest privately owned body of water in the United States." In addition to 400 lakefront homes, the development will feature "amenities a family should expect from a world-class resort," including a clubhouse, restaurant, resort pool and a "championship-level" golf course.

How does the eminent domain process work?

The first condemnation steps for the Fairfield Lake property include a formal written offer from TPWD, followed by a final written offer on or after 30 days. The final offer has to be equal to or greater than the land’s appraised value.

Cory Chandler, deputy communications director for TPWD, told KXAN Friday an initial offer has been sent via certified mail. The landowner has the right to decide whether to keep the offer amount confidential or disclose it publicly.

Shawn Todd, CEO of Todd Interests, told KXAN his bank recently appraised the value of the property’s water rights alone at $238 million. The property had been listed for sale by Vistra for more than $110 million. Todd told KXAN his company paid "just north of $100 million" for the land.

After receiving the final offer, Todd has 14 days to consider. If the offer is not accepted, the Texas attorney general can petition to condemn the land. Three special commissioners, appointed by a district court judge, would hear evidence and give the property owners the current fair market value of the property. TPWD would then pay the amount and take possession of the property.

If either party objects to the special commissioners’ findings, the case would move to a civil trial.