Shoreline property owners across Emerald Bend filled the city chambers March 4 looking for a clarification on about 100 acres of water lots adjacent to their property.
The issue is confounding for most of the property owners since they believed they owned the water lots in the first place. The City Council explained that is not the case.
“Right now you have a problem whether you know it or not,” Mayor Randy Kruger said.
Lago Vista vs. Robert Eckert
About five years ago, Point Venture resident Robert Eckert contacted one of the original developers of the North Shore, National Resort Communities, and bought deeds for water lots adjacent to land lots on the Emerald Bend shoreline. The sale also included strips of land inside the city.
City Manager Bill Angelo said Eckert approached the city in 2003, announcing he had bought the water lots and other strips of land, which included most of the city’s right of way. Angelo said Eckert was willing to give some of the property back to the city for other services.
“I got the impression he wanted to extend utilities to certain properties without a fee,” Angelo said. “We basically told him no.”
The issue of ownership over the water lots and strips of land was not a new issue for the city, Angelo said. Strips of property have been fought over between different property owners since the city has been established. But Angelo said the Eckert’s case spurred the city to take action.
The city filed suit with the Lago Vista Property Owners’ Association against Eckert and any other property owners in dispute with the city to find ownership of the properties.
In February 2009—after years of litigation—the city received a declaratory judgment ruling it would receive ownership of all water lots bought by Eckert. In June 2009, the City Council began discussion on ways to bring ownership of the water lots to the adjacent lot owners.
The issue became even more vexing to the Council since state law does not allow the city to sell property under fair market value. The city hired an appraiser, which set the lowest appraised value at 17 cents per square foot. The city attorney then recommended the city retain a recreation easement on the water lots, lowering the value to 7 cents per square foot and thus a lower price to sell to the adjacent lot owners.
The city engineer then prepared plats of the water lots along the lines of the original NRC plats, which were created by property lines heading straight toward the center of the lake. The platting caused a variety of sizes for water lots, the biggest being nine acres and the smallest less than a third of an acre. The cost to purchase water lots ranged from $457 to about $27,000. To date, the city has spent $9,500 on platting the water lots, city documents show.
Assistant City Manager Frank Robbins suggested the Council approve rezoning the water lots and creating conditional use permits to allow for boat docks, but only after adjacent lot owners purchased the water lots. The Council said the city could not allow boat docks on city-owned property because of a liability issue.
Another suggestion by city staff would allow adjacent lot owners to purchase only a portion of the adjacent water lot in order to build a boat dock, and leave the rest of the water lot under city ownership. Robbins estimated re-platting a water lot would cost about $500, adding to the overall cost of purchase.
Residents respond
But throughout the city’s existence, Emerald Bend lot owners were not aware of the different lots. Because of this, many have built boat docks on property owned initially by NRC, then Eckert and finally by the city.
City records show 38 out of 49 water lots now under city ownership contain a boat dock. Six of those boat docks are adjacent to vacant land, with some located on a neighbor’s property.
In order to receive input on the rezoning change, the City Council and city planning and zoning commission held a joint public hearing March 4. The hearing allowed residents to comment on rezoning the lots to allow for boat docks and allowing the sale of water lots back to adjacent lot owners.
Emerald Bend residents filled the city chambers, with nearly everyone in attendance speaking their mind on the city’s actions. While many remained skeptical on the issue—one resident commented on possible litigation—many residents were simply trying to make sense of the idea that property they thought to have owned was simply not theirs.
Kruger explained the city’s actions before opening questions to the Council, P&Z and property owners.
“The only option that we saw is to put a price on this property and give it back to the adjacent lot owners,” he said. “This is the best solution we could come up with.”
Councilman Pat Dixon followed Kruger’s comments, saying the city reselling the lots back to property owners is a reasonable solution. Councilwoman D’Anne Gloris said the city’s actions were on behalf of the property owners, and Eckert’s actions were legal. “It’s not ethical, but it’s legal,” she added.
Resident comments opened with with Mohsen Anami, who said he remained neutral on the issue since he did not fully comprehend the city’s actions. A few comments later, resident Diana Dworaczyk asked a series of questions about the appraised value of water lots and whether or not they matched real property values. She also questioned the validity of the city owning the water lots since it did not hold a clear title on the lots. Kruger answered that the city owned the lots under the court order, but could not specifically say the city held a clear title.
Hector Aguilar asked the city not to allow boat docks on the LVPOA-owned Emerald Park shoreline. The city currently owns the water lots adjacent to the parkland.
Bryan Wilkie commended the city for its actions and showed his frustration over his land’s plat, which showed he owned the water lot. He later found his deed did not include the lot.
“I think the city is doing a favor for us, so thank you,” he said.
Lloyd Rodenbeck said he conducted nearly a week’s worth of research before attending the public hearing. After consulting an attorney, he had a number of questions for the Council.
“I don’t believe I’m buying a lot,” he said. “I believe I’m buying my right to put a boat dock there.”
Rodenbeck asked if buyers would have to pay for back taxes on the water lots, which Kruger answered they would not. He also urged the Council to conduct one or more appraisals on the water lots to receive a lower appraisal.
“It’s a huge impact to a family,” he said of purchasing the water lot.
Kelley McFadden asked how she could know with certainty if she would own the property after buying it from the city.
“If I buy this property now, who is the next person I’m going to have to buy it from?” she asked.
Lots for sale
The case of water lots having a different owner than adjacent shoreline lots is not new to the North Shore. Ron Carmichael, who lives on Cornell Cove, said a real estate agent approached him about buying the water lot in front of his property. Carmichael then investigated the property lines, and found there were even more lots platted further into the lake adjacent to his property.
Carmichael said the real estate agent, who Angelo later identified through city documents as Matt Natuszewski, was not following “your typical American Dream.” He said Natuszewski offered upwards of $5,000 for the water lot.
“To me it was both folly and spite to think I’d pay him a huge amount of money,” Carmichael said. “I just wasn’t having any of it.”
Carmichael said at least one of his neighbors opted to buy the water lot from Natuszewski in order to keep their boat dock on the property. But Carmichael said he had no plans to use a boat dock or sell his property.
“I decided I didn’t need it. I don’t have a boat. I don’t intend to have a boat dock,” he said.
Angelo said the lawsuit against Eckert was meant to avoid a situation like the one Cornell Cove residents had.
A solution
The Council has no timeline in which to take action on rezoning the water lots, so Angelo said city staff will research possible alternatives and comments raised at the March 4 public hearing. The issue will first go to the P&Z, which will give a recommendation to the Council for approval or disapproval.
Angelo understood the issue had potential for controversy, but said the Council did well in explaining its actions.
“We don’t see this as a revenue source,” he said. “We’re just trying to get it back in the hands of the people as cheaply as possible.”