Arch Resorts, LLC v. the City of McKinney, Texas
05-15-01108-CV
| Tex. App. | Nov 2, 2015Background
- Arch Resorts bought a 43.4‑acre tract in Collin County located in the City of McKinney's extraterritorial jurisdiction (ETJ) and proposed an upscale RV resort with associated retail; development commenced in 2014–early 2015.
- Based on representations from City staff, Arch Resorts applied for and received multiple development permits from Collin County (including septic/drainage and site plan approvals) before February 3, 2015 (more than 90 days before McKinney’s May 5, 2015 annexation).
- The City of McKinney enacted an ordinance on March 17, 2015 purporting to extend its building code to the ETJ, then annexed and zoned the property on May 5, 2015 to a district that forbids the RV use.
- McKinney issued a stop‑work order on May 28, 2015, halting Arch Resorts’ completion and opening; Arch Resorts sued seeking a temporary injunction to allow completion under the prior County permits.
- The trial court denied Arch Resorts’ application for a temporary injunction (and also denied the City’s application). Arch Resorts appealed, arguing statutory protections (Tex. Loc. Gov’t Code § 43.002 and Chapter 245) and that the City lacked authority to apply building/permit requirements in the ETJ prior to an express ordinance.
Issues
| Issue | Plaintiff's Argument (Arch Resorts) | Defendant's Argument (City of McKinney) | Held (trial court) |
|---|---|---|---|
| 1) Whether the City may prohibit Arch Resorts from beginning/continuing the RV use after annexation when County permits were filed/issued more than 90 days before annexation | Arch Resorts says § 43.002 bars the City from prohibiting uses that were planned and for which a completed application was filed before annexation proceedings; here County permits/site plans satisfy the statute | City argues County approvals were unauthorized or insufficient to vest rights against municipal regulation | Trial court denied Arch Resorts’ temporary injunction (court did not enjoin City enforcement) |
| 2) Whether McKinney could require compliance with its building code in the ETJ prior to March 17, 2015 without an express ordinance extending the code | Arch Resorts: a municipality needs express statutory or ordinance language to extend building codes to the ETJ; the City’s pre‑March practice directed applicants to the County | City: contends various statutes/interlocal agreements and prior ordinances authorize enforcing building/construction codes in the ETJ | Trial court denied Arch Resorts’ injunction (Arch Resorts appeals) |
| 3) Whether Chapter 245 vests Arch Resorts’ project from later municipal regulation | Arch Resorts: Chapter 245 (and related caselaw) protects projects commenced with permit filings/approvals so later ordinance changes cannot be retroactively applied | City: contends Shumaker/other authorities limit vesting where municipality has authority or where county approvals were invalid | Trial court denied Arch Resorts’ injunction |
| 4) Whether Collin County had authority to issue the permits relied upon and whether City may collaterally attack those approvals | Arch Resorts: County approvals were authorized, relied upon, and the City’s attack is an improper collateral challenge without joining the County | City: disputes scope/validity of County approvals and argues Arch Resorts should have sought City permits | Trial court denied Arch Resorts’ injunction |
Key Cases Cited
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (temporary injunction standards; extraordinary remedy)
- FM Props Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (city authority to regulate ETJ derived from statute)
- City of Duncanville v. City of Woodland Hills, 489 S.W.2d 557 (Tex. 1972) (annexation/ initiation of proceedings principles)
- State v. Shumake, 199 S.W.3d 279 (Tex. 2006) (statutory construction principles cited regarding municipal authority)
- City of Heletos v. Miller, 243 S.W.3d 704 (Tex. App.—San Antonio 2007) (annexation and protection of pre‑annexation development rights)
- Shumaker Enterprises, Inc. v. City of Austin, 325 S.W.3d 812 (Tex. App.—Austin 2010) (discusses limits on vesting when municipal authority conflicts)
- CPM Trust v. City of Plano, 461 S.W.3d 661 (Tex. App.—Dallas) (challenges in recovering interim damages from municipalities following ordinance enforcement)
- Village of Tiki Island v. Ronquille, 463 S.W.3d 562 (Tex. App.—Houston) (temporary injunction to bar municipal enforcement of new ordinance where plaintiffs showed irreparable injury)
- North Cypress Medical Center Operating Co. v. St. Laurent, 296 S.W.3d 171 (Tex. App.—Houston) (standards on irreparable injury and uniqueness of real property)