A fight over wastewater in Dripping Springs is flushing H-E-B’s expansion plans down the drain.
A long-running legal fight over treated wastewater disposal is stalling major commercial developments in one of Austin’s fastest-growing suburbs, the Austin Business Journal reported.
Dripping Springs’ population surged over 20 percent last year, and the average home price is nearing $800,000. But the city of 8,700 is rapidly nearing its wastewater treatment capacity, meaning retail projects can’t move forward until the bottleneck clears.
H-E-B secured approvals earlier this year to demolish its existing Dripping Springs store and build a new one twice the size, but those plans are on hold indefinitely. The San Antonio-based grocery chain won’t move ahead “until the city resolves their wastewater challenges,” a spokesperson said.
The issue dates back to 2019, when the Texas Commission on Environmental Quality approved the city’s request to expand treatment capacity from 300,000 to 822,500 gallons per day.
But environmental groups, led by Save Our Springs Alliance, sued to block the expansion over concerns about treated effluent flowing into Onion Creek. The Texas Supreme Court heard arguments last year, and a ruling is expected this summer.
The lawsuit led city officials to establish a moratorium on development, lasting almost a year, from November 2021 to September 2022. Dripping Springs has now stopped accepting new wastewater service applications, Deputy City Administrator Ginger Faught told the outlet.
Builders have resorted to short-term workarounds, like temporary land application permits and piggybacking on adjacent properties’ unused capacity. Those options are more feasible for housing — over 5,000 new homes are underway — but not for retail, which usually lacks the land needed for its own disposal infrastructure.
The region has a trade area of 100,000 people, but projects are on pause because Dripping Springs can’t compete with nearby towns offering simpler permitting, said Aaron Farmer, Dripping Springs resident and president of market research firm the Retail Coach. Target and other major retailers are interested but hesitant, he said.
City officials say they’re ready to move on expansion the moment the court allows it.
— Judah Duke
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