AUSTIN, Jan. 26, 2026 – Opponents of Lennar Corp.’s proposed controversial Guajolote Ranch development in northwest Bexar County last week filed suit in state district court for a judicial review of decisions by the Texas Commission on Environmental Quality that resulted in a wastewater permit for the project.
The massive 295-page filing including exhibits, filed in Travis County District Court Jan. 21 by the Greater Edwards Aquifer Alliance against TCEQ, argues that the commission’s Oct. 28 order approving the permit for Lennar’s wastewater contractor Municipal Operations LLC “is the product of numerous errors and must be reversed.”
In all, the administrative appeal alleges a total of 10 errors by TCEQ in granting the permit.
Under Texas government code, according to the filing, the TCEQ’s decisions were a “violation of a constitutional or statutory provision; in excess of the agency’s statutory authority; made through unlawful procedure; affected by other error of law; not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or arbitrary or capricious, or characterized by abuse of discretion or clearly unwarranted exercise of discretion.”
The appeal could result in prolonged court proceedings.
“This case is expected to take a year or more to move through the courts,” said Randy Neumann, chair of the steering committee of the Scenic Loop-Helotes Creek Alliance, a member organization of the Greater Edwards Aquifer Alliance. “While the lawsuit does not halt the Guajolote Ranch project, it creates significant uncertainty around the proposed wastewater treatment plant. Any investment in that facility could be at risk if the permit is ultimately remanded or vacated.”
See the full filing, here: https://www.scenicloop.org/wp-content/uploads/2026.01.21-GEAA-Original-Petition-w-Ex-8.pdf
Meanwhile, the San Antonio City Council is expected to vote on a proposed municipal utility district, or MUD, for Guajolote Ranch on Feb. 5. The city’s planning commission on Jan. 16 voted to recommend denial of the MUD. And during a special meeting on Jan. 22 to hear a briefing on the proposal and comments from 18 members of the Scenic Loop-Helotes Creek Alliance and other opponents, a majority of city council members said they would vote against it. View the full meeting, here: https://www.youtube.com/watch?v=x3v8A6pu_hE&t=20s
“Our lawsuit also complicates any effort to secure a municipal utility district, and even if a MUD were approved, ongoing legal challenges could affect bonding and financing,” Neumann said. “Together, we believe these factors place the development in a far more challenging and uncertain environment.”
Florida-based Lennar wants to build 2,900 homes on 1,160 acres of Guajolote Ranch, west of the intersection of Scenic Loop and Babcock roads, and release an average of 1 million gallons a day of treated sewage into the Helotes Creek watershed, which directly recharges the Trinity Glen Rose Aquifer, the water supply for the immediate area, and contributes up to 15% of the total recharge of the Edwards Aquifer, principal water source for about 2.5 million people across multiple counties.
According to the filing, the TCEQ made the following errors in granting the permit:
- Concluding that discharge causing a dissolved oxygen concentration of 2.9 mg/L (milligrams per liter) was acceptable – That level is not consistent with the Texas Surface Water Quality Standard.
- Acting upon unreliable DO (dissolved oxygen) modeling results – The agency refused to consider actual site-specific information for Helotes Creek, relying instead on statewide medians.
- Failing to apply the Tier 2 anti-degradation review rule to Helotes Creek, based upon TCEQ’s failure to recognize the fishable/swimmable uses of Helotes Creek – A “Tier 2 anti-degradation review” is required if activities would cause degradation of waters exceeding fishable/swimmable quality, but one wasn’t done because TCEQ classified the “entirety” of Helotes Creek, all portions of it, as not fishable/swimmable, despite testimony and evidence otherwise in the Grey Forest area. “If they had done a Tier 2 review as required, it would have meant no permit,” Neumann said.
- Issuing the permit despite the reasonable potential that the authorized discharge would cause excessive growth of aquatic vegetation and impair the aesthetically attractive condition of Helotes Creek – Testimony showed how the proposed discharge could result in excessive algae growth when considering similar discharges elsewhere where problems have occurred, also in violation of the Texas Surface Water Quality Standard, impairing both appearance and “existing, designated, presumed or attainable use.”
- Issuing the permit without giving any consideration to the potential impacts of PFAS contained within the discharge, including impacts on endangered wildlife – While no specific regulatory standards exist for “contaminants of emerging concern” like PFAS, or “forever chemicals,” TCEQ was required to consider impacts of toxic substances under its general criteria. And the U.S. Environmental Protection Agency established enforceable primary drinking water standards for PFAS in 2024, with toxicity studies showing adverse effects on animals and possibly humans. Noting the toxicity, the filing included as an exhibit the state’s lawsuit – led by Attorney General Ken Paxton – in December 2024 against manufacturers 3M, DuPont and others in district court in Johnson County, where wells contaminated with PFAS were linked to livestock deaths.
- Issuing the permit despite the reasonable potential that the discharge would adversely affect groundwater quality based upon a general policy which has not been adopted by rule that the protection of surface water ensures the protection of groundwater – As that policy never has been adopted by rule by TCEQ, it is invalid, and it provides for no limits on nitrates, linked to increased risk of colorectal, bladder, and breast cancer; thyroid disease; diabetes; and birth defects. Groundwater in the area of the proposed discharge is particularly sensitive to groundwater contamination, according to extensive testimony, with receiving waters located in the Edwards Aquifer contributing zone, and hydraulically connected to the Edwards recharge zone, allowing minimally diluted contaminants to travel rapidly through the system at a rate of approximately one mile per day.
- Relying on speculative evidence and excluding relevant evidence relating to the potential impacts of the discharge upon groundwater – The commission relied upon speculative evidence from a Municipal Operations witness that wells in the vicinity were completed in the Middle Trinity Aquifer, not as susceptible to pollution as the shallower Upper Trinity, but improperly excluded a deposition from F. Paul Bertetti, senior director of aquifer science, research and modeling for the Edwards Aquifer Authority, indicating that water could potentially be drawn from the Upper Trinity as well. TCEQ struck the relevant deposition, which was cut short by Bertetti’s counsel after “harassing questioning” of Bertetti by Municipal Operations counsel. TCEQ also failed to address protection of groundwater in the Upper Trinity, according to the filing.
- Issuance of the permit without addressing the potential impact of the discharge upon karst invertebrates violated the commission’s own rules – TCEQ failed to perform a case-specific evaluation of impacts upon endangered species in not considering karst invertebrates, typically cave-dwelling species, relying on a 1998 U.S. Fish and Wildlife Service biological opinion that looked only to aquatic or aquatic-dependent species in priority watersheds of concern. Evidence demonstrated that karst invertebrates may be present in the area of discharge. Lennar contractor Pape-Dawson conducted a habitat assessment for Municipal Operations, stating that “surface expression of karst invertebrate habitat was identified during the field visit.”
The lawsuit also argues that the commission’s findings of fact are “conclusory,” meaning without providing the necessary supporting facts or evidence, and do not adequately resolve legitimate factual disputes in the matter. And it maintains the commission improperly allocated the burden upon the parties, specifically upon the protestants in the case.
“The stakes could not be higher,” Neumann said. “The Guajolote Ranch wastewater treatment permit threatens the drinking water source for 2.5 million people. The errors made by TCEQ, the State Office of Administrative Hearings judges and Municipal Operations LLC are serious enough that the permit must be vacated – or at the very least remanded – so that real science, not outdated assumptions, guides the outcome.
“Our lawsuit is about protecting the aquifers that sustain our region and insisting that state agencies follow the law, the evidence and the science,” he said.
A comprehensive hydrological study, funded through the city’s own Edwards Aquifer Protection Plan, concluded that additional wastewater systems from residential development in the Helotes Creek watershed, “regardless of type,” would “significantly degrade the watershed and the quality of water recharging the Edwards Aquifer.”
“It’s deeply concerning that a two‑year, taxpayer‑funded scientific study of the Helotes Creek watershed is being dismissed, while non‑scientists at the San Antonio Water System publicly question its validity,” Neumann said.
“We have repeatedly urged Lennar – a company that has benefited from building more than 100 subdivisions in and around Bexar County – to be a responsible partner to the city and the residents who have supported their success,” he said. “We have asked them to reconsider pursuing an ultra‑high‑density development on the Guajolote tract that conflicts with the city’s North Sector Plan, would introduce unsafe traffic volumes onto the two‑lane historic Scenic Loop and sits atop one of the state’s most environmentally sensitive recharge areas.
“This region is so critical to the Edwards Aquifer,” he concluded, “that the city has invested more than $50 million through the Edwards Aquifer Protection Program, just in the Helotes Creek watershed area alone, to conserve land and safeguard our drinking water.”
Said Emory Bluhm, president of the Scenic Loop-Helotes Creek Alliance: “I am a strong proponent of property rights until you begin to put the livelihood of a growing population and an expanding economy at risk for corporate profits. While rules are in place to regulate development and pollution, the best way to protect the aquifer is to conserve the sensitive and irreplaceable land located over its recharge and contributing zones, not to discharge treated sewage across them.”
The Scenic Loop-Helotes Creek Alliance is a nonpartisan, nonprofit 501(c)(3) group representing the largest neighborhood by square mile recognized by the San Antonio Neighborhood & Housing Services Department, a wide corridor along Scenic Loop Road from Bandera Road to north of Babcock Road.
Scenic Loop-Helotes Creek Alliance contacts:
Randy Neumann, SL-HCA steering committee chair, 210-867-2826, uhit@aol.com
Steve Lee, 210-415-2402, text; media@scenicloop.org