iLand Development’s Leander Lagoon Project Denied Changes

The developers of a $1 billion project in Leander were dealt another setback by the Austin suburb.

Austin-based iLand Development Group’s updated plans for the 78-acre Leander Springs project was denied by the Leander City Council last week, Austin Business Journal reported. The unanimous vote denied amendments to its public utility district agreement with the city, further delaying any dirt moving on the ambitious mixed-use project centered around a 4-acre artificial lagoon, which was first announced five years ago.

The developer requested amendments to reduce the required number of apartments from 1,600 to 1,200, as well as some changes to the timeline. It asked for removal of the date required for certificate of completion on the lagoon, and to remove the time requirement for hotel construction and delivery. The PUD requires the hotel to be complete by the end of 2028.

The amendment also would’ve removed the requirement that the Lagoon be open to the public, with admission offered at a discount to Leander residents.

Key sticking points in moving the development forward have been water usage, stakeholder investment, a terminated $22 million city incentive package — lost by tapping the federal EB-5 program, which trades permanent resident status to foreign investors and their families in exchange for investment in commercial enterprises. The Texas Commission on Environmental Quality’s website lists a permit application for an entity tied to the project to discharge up an average of 1.4 million gallons of treated effluent and stormwater per day. Leander Mayor Christine DeLisle has long been skeptical of the project due to concerns over water usage.

Another request in the PUD amendment was to designate the lagoon as a “non-essential use” in terms of water so that it would have had to comply with conservation.

After the Aug. 21 meeting, iLand said in a statement that the company is eager to move forward with the project, and that the water management plan presented to the City Council and residents is robust. iLand dropped Miami-based Crystal Lagoons as the lagoon developer, and Austin-based VVater has replaced it.

The setbacks don’t stop with just water-use concerns for the project, at FM 2243 and the 183A frontage, intended to transform Leander into a Central Texas destination. Since announcing the project in 2020, iLand has faced setbacks that include $3 million in liens to contractors.

— Eric Weilbacher