City of San Antonio and Toyota Motor Manufacturing Texas, Inc. v. Southside Affordable Development, LLC

Court of Appeals of Texas·Decided July 16, 2025·No. 04-24-00371-CV·Published

Opinion

Fourth Court of Appeals San Antonio, Texas

OPINION No. 04-24-00371-CV

CITY OF SAN ANTONIO AND TOYOTA MOTOR MANUFACTURING TEXAS, INC. Appellants

v.

SOUTHSIDE AFFORDABLE DEVELOPMENT, LLC Appellee

From the 285th Judicial District Court, Bexar County, Texas Trial Court No. 2023CI2553 Honorable Rosie Alvarado, Judge Presiding

Opinion by: H. Todd McCray, Justice

Sitting: Lori I. Valenzuela, Justice H. Todd McCray, Justice Velia J. Meza, Justice

Delivered and Filed: July 16, 2025

REVERSED AND RENDERED

The City of San Antonio (“COSA”) appeals the trial court’s interlocutory order denying its

plea to the jurisdiction. Because the trial court lacks subject-matter jurisdiction over Southside

Affordable Development, LLC’s (“Southside”) claims, we reverse and render judgment dismissing

Southside’s lawsuit with prejudice. 04-24-00371-CV

BACKGROUND

In 2003, COSA and 16 other parties, including the State of Texas, entered into the Project

Starbright Agreement (“the Agreement”) with Toyota Motor Manufacturing North America, Inc.

(“Toyota”), to bring a Toyota manufacturing plant to land COSA had annexed in 2002. 1 Under 0F

paragraph 2.3 of the Agreement, COSA and other local entities also agreed to the terms and

obligations of a separate agreement with Toyota, (the “City Agreement”). 2 Under Paragraph 24(a) 1F

of the City Agreement (“Paragraph 24(a)”), COSA agreed to work in good faith with Toyota in

establishing zoning regulations to Toyota’s satisfaction within a three mile perimeter of the Toyota

manufacturing plant (the “Enhanced Zoning Area”).

The City agrees to initiate appropriate zoning cases and revisions to its Unified Development Code to zone the larger geographical area surrounding the Project Site located within the City’s zoning jurisdiction and within three (3) miles of the perimeter of the Project Site (the “Enhanced Zoning Area”) The City agrees to commence such zoning process as soon as is practicable after the Effective Date and to work with Toyota in accordance with procedures required and authorized by law to zone the area which will include the creation of an appropriate new zoning overlay district (a “Target Industrial Development Area”) with the objective of imposing upon the Enhanced Zoning Area appropriate land use guidelines that satisfy Toyota regarding use, density, set-back and other restrictions consistent with Project Starbright. Toyota may designate a representative to work with the City, and the City will work in good faith with such representative, in the development of land use planning initiatives in the Enhanced Zoning Area and the Target Industrial Development Area, as well as any other land use planning initiative that affects the general area of the Project Site.

1 The other parties to the Agreement were Bexar County, Texas; City of San Antonio, Texas, Starbright Industrial Development Corporation; Texas Department of Transportation; Texas Workforce Commission; Alamo Workforce Development, Inc.; Texas Department of Economic Development; Texas Commission on Environmental Quality; Texas Comptroller of Public Accounts; San Antonio Water System; (San Antonio) City Public Service; San Antonio Economic Development Foundation; Greater Kelly Development Authority; Southwest (San Antonio) Independent School District; Bexar Metropolitan Water District; and Bexar County Rail District. 2 The other parties to the City Agreement were San Antonio Water System; (San Antonio) City Public Service; City of San Antonio, Texas, Starbright Industrial Development Corporation; San Antonio Economic Development Foundation; Alamo Workforce Development, Inc.; Greater Kelly Development Authority; and Bexar Metropolitan Water District.

-2- 04-24-00371-CV

On May 22, 2003, COSA’s City Council (“City Council”) passed Ordinance 97650,

approving the Agreement and authorizing the City Manager to execute it on COSA’s behalf. Terry

Brechtel, then city manager of COSA, and then Mayor Ed Garza, executed the Agreement on

behalf of COSA on June 26, 2003.

On September 5, 2002, months prior to the execution of these agreements, COSA approved

Ordinance 96557, which added 8,358 acres to COSA. The Enhanced Zoning Area, as defined in

Paragraph 24(a), is located within this tract. Southside currently owns approximately 97 acres of

property within the Enhanced Zoning Area (the “97-Acre Tract”).

Initially, COSA zoned the entire 8,358 acre tract as DR (Development Reserve). But Presto

Tierra LLC, the prior owner of the 97-Acre Tract, requested a zoning change for some of this tract,

including the 97-Acre Tract. On January 15, 2004, about seven months after the adoption of the

Agreement, COSA approved the rezoning request via Ordinance 98711, which changed the zoning

classification of the 97-Acre Tract from DR to M1-1 (mixed light industrial use). Under this

classification, multifamily residential use is not permitted.

On January 23, 2017, Presto Tierra LLC submitted another rezoning application,

requesting that COSA change the zoning of the 97-Acre Tract from M1-1 to C-2 AHOD

(commercial). The application presented the following reason for seeking the change:

The reason for this zoning request is to give the “Preserve” development zoning categories that are more in keeping with the rest of mixed-use projects in San Antonio. The current zoning categories are left over from the City South Management Authority, which entity has been dissolved. This project has always been a mixed-use development of commercial along Hwy. 16 . . . For the 100 acres fronting Hwy. 16. we are requesting C-2 . . . . The C-2 portion is not compatible with the current land use in the Heritage South Sector Plan . . . .

On April 20, 2017, COSA approved Ordinance 2017-04-20-0279 which changed the zoning

classification of the 97-Acre Tract to C-2 as requested.

-3- 04-24-00371-CV

Presto Tierra LLC conveyed the 97-Acre Tract to Southside two months later, on June 29,

2017. 3 2F

In February of 2022, Southside requested rezoning of approximately 34.5 acres of the 97-

Acre Tract from C-2 to R-5 (Residential Single-Family). City staff recommended denying the

request, but the zoning commission recommended approving the application on April 5, 2022. The

zoning request was then placed on the City Council’s agenda for August 4, 2022. Before the City

Council’s scheduled vote on the application, however, Southside obtained formal postponement

of its case. The matter was reset on the City Council’s agenda for December 15, 2022, but

Southside again postponed the vote, noting that the requested zoning change to R-5 might not suit

the proposed development. Southside then amended its application in May of 2023, to request the

34.5 acres be rezoned to MF-33 (multi-family residential).

Southside represents that, in June 2023, the councilwoman for the district containing the

97-Acre Tract, Dr. Adriana Rocha Garcia, advised Southside she was not supportive of the zoning

change. On September 1, 2023, representatives of Southside met with the City Attorney, members

of his staff, Dr. Garcia, an Assistant City Manager, and the Director of the Neighborhood &

Housing Services Department. On October 6, 2023, the City Attorney’s office advised Southside

by email that COSA would not support the project. Southside has since postponed a vote by the

City Council on its requested zoning change.

On December 4, 2023, Southside filed a lawsuit asserting Ordinance 97650 violated the

Texas Constitution by improperly delegating COSA’s zoning authority to Toyota, and that

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