May 28, 2026 – Despite a resounding San Antonio City Council vote of 11-0 denying a municipal utility district for Guajolote Ranch, its owners on behalf of Lennar Homes of Texas still are pursuing a MUD, according to a petition obtained by the nonprofit Scenic Loop-Helotes Creek Alliance neighborhood group through a Freedom of Information Act request.
The petition filed April 8 with the city clerk, and copied to the San Antonio Water System, the city planning department and the city attorney, requests the city “make available” sanitary sewer services otherwise “contemplated” to be provided by the MUD. However, the move is seen as strictly procedural, as the city most assuredly can’t comply, which could free up the owners then to pursue a MUD with the Texas Commission on Environmental Quality to provide the sewer services.
The Texas Water Code requires the owners to first give the city the opportunity to consent to or decline provision of those services before going to the TCEQ, which they could do if the city either declines or doesn’t respond within 120 days of the petition filing. That could push the timeframe for a MUD application with the TCEQ to the first week of August.
According to the petition, the owners still contemplate a MUD to provide for the “acquisition, improvement, extension, maintenance, and operation of, and the financing and issuance of bonds for, a sanitary sewer system (including wastewater collection, treatment and disposal facilities) for residents and customers of the district.”
The MUD application denied by city council Feb. 5 called for the authorization of $150 million in financing for infrastructure, including the sewage treatment plant, primarily through the issuance of bonds to be paid back by future residents of the development through higher property taxes and fees.
An average of 1 million gallons a day of treated sewage – and as much 4 million gallons daily – from 2,900 homes of the 1,160-acre development west of the intersection of Babcock and Scenic Loop roads in northwest Bexar County would be released into the Helotes Creek watershed, which recharges up to 15% of the Edwards Aquifer, the primary drinking water source for 2.5 million people across multiple counties.
“While it may be tempting to ask, ‘What part of no does Lennar not understand,’ the truth is Lennar understands perfectly,” said Randy Neumann, chair of the steering committee of the Scenic Loop-Helotes Creek Alliance. “This is not confusion or misunderstanding – it is a calculated attempt to make San Antonio appear unreasonable for denying a MUD that would allow them to tax unsuspecting future homeowners $150 million to build their own subdivision.
“Lennar is playing Russian roulette with the drinking water of 2.5 million Texans while using other people’s money to generate profit for themselves,” he said. “This begs the question, ‘Who is really being unreasonable in this scenario?’ ”
See the petition, here: https://www.scenicloop.org/wp-content/uploads/ServicePetition_BMUD2COSASUBMITTED-1.pdf
The petition was filed by owners Guajolote Ranch Inc. of Terrell Hills, controlled by treasurer Richard H. “Rick” LePere for 1,097 acres of the development, and by retired Valero Energy Corp. executive Sidney E. “Gene” Edwards Jr. and wife Marcie, now of Palm Beach Gardens, Florida, for the remaining 63 acres – all on behalf of Lennar Homes of Texas Land and Construction, Ltd, as “applicant.” Those are the same parties who filed the failed MUD application with the city. Lennar is thought to be paying the owners option money to eventually purchase and develop the land.
Also petitioning is Jorge Flores, identified as a “qualified voter residing on the subject property.”
“The families attempting to orchestrate this sale should understand that, as the titled landowners and co‑developers, they may be exposing themselves to significant environmental liability,” Neumann said. “Under Texas law and federal environmental statutes, responsibility attaches to the landowner for clearing and grading violations, endangered species impacts and contamination that enters a recharge feature.
“With baseline studies now underway, the consequences of this project will not be theoretical,” he said. “They may have placed themselves squarely in the path of the environmental fallout. That may be the part of ‘no’ they have not yet considered.”
The wastewater operator doesn’t exist
Meanwhile, the holder of the wastewater permit for the development, Municipal Operations, LLC, no longer exists – at least in the eyes of the state comptroller’s office, which shows the operator as “inactive.”
Its registration indicates “franchise tax involuntarily ended,” which typically means that a business entity’s franchise tax status has been terminated by the state for failure to file required tax reports or pay taxes owed, and it may lose its legal right to operate in Texas as a result.
That not only raises questions about the validity of the wastewater permit, but of a settlement agreement reached between Municipal Operations and the San Antonio Metropolitan Health District that effectively removed the city’s ability to contest the permit before TCEQ.
Both have implications for an ongoing judicial review of the wastewater permit for Guajolote Ranch in a district court in Austin. That review and possible appeal proceedings could take another two years to resolve.
And there are still other headwinds. On May 12, the Scenic Loop-Helotes Creek Alliance successfully convinced the city/county Southern Edwards Plateau-Habitat Conservation Plan Coordinating Committee to postpone for a month a decision that would allow Lennar to pay $612,458 to destroy another 134.5 acres of critical habitat for endangered species at Guajolote Ranch – on top of $2.7 million accepted previously on 229.7 acres. The money ostensibly would go for conservation efforts elsewhere.
“In the meantime, they have already scraped nearly 300 acres of Hill Country habitat, displaced endangered species and sent silt, debris and construction rubble into creeks during recent rains,” Neumann said. “Now they intend to spray or discharge 1 million gallons of sewage every day and untold amounts of stormwater from about 3,000 homes into the Helotes Creek recharge zone. Four hydrogeologists testified that this sewage will enter the Edwards Aquifer.”
Further, serious questions remain about access to and exit from the development.
As it stands, there would be only one viable way in and out of Guajolote Ranch, funneling an additional 30,000 vehicle trips a day onto two-lane Scenic Loop Road and creating a massive wildfire evacuation and emergency response hazard. Despite evidence to the contrary, Lennar has continued to represent that there would be multiple access points.
“The danger doesn’t stop with water,” Neumann said. “The Guajolote Ranch project creates serious fire and life‑safety risks for the families who already live along Scenic Loop Road and for the thousands of future residents Lennar hopes to attract. Emergency access, evacuation capacity and school bus safety have all been ignored. This is not responsible development – it is a threat to public safety.”
Not only did city council soundly reject a MUD, but the entire Bexar County delegation of 10 state representatives and four state senators from Bexar and Travis counties, of both parties, as well as county commissioners and the cities of Helotes and Grey Forest, remain opposed.
And finally, at the corporate level, Lennar Corp. is facing mounting financial pressures from investors after continually missing earnings projections, with particular scrutiny of its “land-light” practice of paying high option fees on property it intends to develop.
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.
CONTACTS:
Steve Lee, 210-415-2402, text; media@scenicloop.org
Randy Neumann, 210-867-2826; uhit@aol.com