By Jason Hogan
University officials and Verano Land Group’s CEO confirmed that shovels will hit soil in either the first or second quarter of 2014, beginning a long awaited community development project along University Way, home of the university’s permanent campus located off I-410 and S. Zarzamora Street.
Although the land developer is on track to begin the community development project, according to Tim Bartlett, CEO of Verano Land Group, the company has fallen into a litigation matter over land developer rights with a group of partners formerly affiliated with them known as VTLM Texas LP.
The project entails a 2,500-acre master plan which was outlined last year to include a university housing complex, a 75,000 square foot building and 100 townhomes.
As an incentive for project completion, the city of San Antonio would pay the land developer an estimated $250 million under their designated TIRZ 28 agreement. But the deal was instead sealed with the development group VTLM rather than Verano. At the heart of the legal dispute is Verano’s claim that the agreement was made without their knowledge. So, at this point, all rights to money under the tax investment reimbursement zoning rights (TIRZ) agreement are currently ceded to VTLM.
Public-private partnership
In 2006, a public-private partnership was struck between Texas A&M-San Antonio and Verano Land Group.
By Sept. 6, 2007, the city of San Antonio approved Verano as the land developer through what is known as a memorandum of understanding, according to a housing and neighborhood services department final project plan published on Nov. 20, 2008 and amended June 24, 2010.
Diedrie Brewton, executive legal assistant to former City Attorney Michael Bernard, who resigned Wednesday, said a memorandum of understanding is essentially an arrangement between two parties which outlines each party’s position in the relationship and what is expected of them.
In the same city document, VTLM was listed as being employed by and acting on behalf of Verano in the business venture with the university and responsible for maintaining quarterly reports detailing the project status.
How VTLM eventually became the primary land developer remains a huge question that participants in the case refused to answer.
Dispute history
In June, a few years after the deal with this university was grafted and well into realization, the litigation matter began between Verano and VTLM Texas, LP over land developer and (TIRZ) rights.
Mediation began Sept. 16 among Bernard and two mediators: former judges Michael P. Peden and Victor H. Negrón.
In a phone interview, Manuel Peláez-Prada, attorney for Verano, said all parties had shown up to the table with the hopes of resolving this matter. But it is important for the mediators to do their job and help the parties come to an arrangement, he continued.
The City of San Antonio is attempting to broker a deal out of mediation, Peláez-Prada said. He added that all parties involved are working hard to arrive at a mutually agreeable deal.
Mediation is a voluntary procedure by which parties engage with a third party to reach a resolution, Peláez-Prada said. A settlement is a one-on-one talk without mediation, he said, making a clear distinction.
“This litigation is something that no one wanted,” Peláez-Prada said. “Suffice it to say, I do believe everyone has looked forward to this mediation,” he said.
Unfortunately, since the matter is still pending possible litigation following mediation results, no one familiar with the proceedings can comment; this includes the city attorney’s office, Verano or lawyers. Neither VTLM leadership, nor attorney Matthew Wymer, responded to inquiries prior to publication.
Attempts were made to gather further details from the city attorney’s office, but, as of Sept. 24, Brewton confirmed the matter is still in mediation.
“Until it is out of a mediation setting — anything that could possibly turn into litigation or is in litigation — we are not allowed to comment. Period,” she said.
The path to mediation
A&M-San Antonio’s development partnership with Verano dates back as far as 2005 when the city of San Antonio offered its support to the university.
Greg Garcia, assistant vice chancellor for governmental relations at A&M-San Antonio, said former mayors Ed Garza and Phil Hardberger and City Manager Sheryl Sculley helped establish the relationship with the university and Verano donated 694 acres of land space, in addition to $1 million dedicated to student scholarships.
The partnership is essential to enacting quicker development, Garcia said, adding that eventually people will see housing development. However, he could not say how near in the future that would occur.
As far as Main Campus’ continued development, Kenneth Mitts, vice president for finance and administration, said if the mediation results in VTLM relinquishing developer rights to Verano, he believes that will be the impetus for Verano moving forward with development.
Mitts said there was no specific timetable set up for Verano to begin breaking ground off University Way.
More recently, Mitts said Verano needed to finalize negotiation deals. They had issues associated with VTLM, leadership changes on the developer’s side — that set them back a little bit, he continued.
But, confirmation to Bartlett’s timetable, the first or second quarter designation for groundbreaking is precisely what university officials have been hearing, Mitts said. “I’m pretty confident that’s going to happen,” he said.
The university maintains consistent communication with Verano. Mitts said they have met as recently as Sept. 4 for a meeting detailing landscape arrangements for the site Verano is due to develop.
The university’s outlook is forward-thinking.
Mitts offered one final thought:
“Our (university officials) goal is for Verano Land Group and VTLM to settle this issue surrounding ownership and development that involves the TIRZ agreement. My personal opinion is that is what is holding up development. Verano needs that [TIRZ agreement] in their name so they can have development move forward.”
