Texas property owners in Collin County have won two important legal victories for private property rights, personal liberty, and limits on local government overreach that could impact how future disputes are resolved – or avoided.

In both cases, the city of McKinney sought to control – via its permitting process – how private landowners outside the city limits develop their property. Courts ruled that the city had no legal authority to regulate the properties.

Both cases provide a sharp contrast between the pro-individual liberty stance of Collin County officials versus McKinney’s government-centric approach. The rulings offer direction for judges in future cases that pit property owners against local governments – and for state lawmakers seeking to join Gov. Abbott in reining in local over-regulation during the special session.

Arch Resorts

Owners of Arch Resorts, LLC, who were sued by McKinney over regulatory control of their private property, won a favorable ruling earlier this month that’s seen as a major win for individual property rights over local government overreach.

The city sued the family-owned business and Collin County claiming it – not the county – had permitting authority over construction on Arch Resorts’ property. The property was located in an unincorporated area of Collin County outside the city but within McKinney’s “extraterritorial jurisdiction” (ETJ).

Buildings on subdivided property in the ETJ do fall within the city’s permitting authority, per a 2002 interlocal agreement between the city and county. But that authority doesn’t extend to non-subdivided developments like Arch Resorts, which had obtained all required permits from the county. In fact, the owners originally contacted the city to inquire about permitting and were appropriately instructed by city staff to contact Collin County.

Construction was nearly complete when McKinney officials stepped in and demanded Arch Resorts stop building and apply for more expensive and burdensome city permits for the project – even though they were not required to do so. That action left the owners unable to use their own property or operate the business in which they’d invested. City officials admitted they sought to regulate the business because they didn’t want an RV park on that property.

Arch Resorts was forced to sue the city for relief; the city then countersued, wasting taxpayer resources on an attempt to bully the property owners into submission.

In his July 7 ruling, District Judge Scott Becker sided with Arch Resorts and Collin County, confirming that Arch Resorts isn’t subject to the extra regulations and permitting demanded by the city, and that McKinney doesn’t have authority to overrule county-issued permits.

Collin County Commissioner Chris Hill says the ruling “represents an important victory for private property rights, personal liberty, and limits on local government overreach.”

Hill noted when McKinney filed the lawsuit that the city was “attempting to gain authority and jurisdiction over citizens outside the city limits that are not even able to vote in McKinney city elections. This is a classic case of regulation without representation.” The court’s ruling concurred with Hill’s assessment.

Arch Resorts didn’t escape unscathed. During the course of the dispute, McKinney forcibly annexed the property, hoping to retroactively subject it to the city’s regulations and require city permits that were unlikely to be approved.

A trial to resolve outstanding issues in the case is set for August 14.

The Arch Resorts ruling followed an earlier win in a similar case that also pitted private property owners against the city’s regulatory overreach.

Custer Storage 

Owners of Custer Storage Center, LLC, another family-owned business located outside McKinney’s city limits but within its ETJ, won a similar ruling against local government overreach in April.

As in the Arch Resorts case, McKinney sued both the property owners and Collin County, claiming the city rather than the county had authority to issue building permits to Custer Storage. The property owners and the county disagreed, maintaining that county regulations applied to the property and the owners’ county-issued permits were sufficient.

As Commissioner Hill pointed out, political opposition to the project “made it highly unlikely that city permits would ever be granted.”

District Judge Mark Rusch agreed with Custer Storage and Collin County. McKinney doesn’t have permitting authority over property in its ETJ that isn’t subdivided. “Custer Storage was not subdivided,” the judge found, so “in this case, the City does not have the authority to insist on its permits being issued.”

Collin County Judge Keith Self hailed the decision as “a great victory” for private property rights. “I believe the city of McKinney will now recognize that private property rights in the unincorporated county cannot be stripped away by fiat.”

Hill agreed, saying “Judge Rusch’s ruling is a victory for private property rights in Texas, and affirms the county’s position in both cases.”

Protecting Private Property Rights in the Future

Despite the rulings, McKinney is still trying to exert authority over other private property owners in its ETJ. In what Self called “the most egregious case I have seen,” McKinney stopped a couple from finishing construction on their retirement home unless they got city permits or gave the city three acres of their land, valued at around $200,000.

“This is bullying by the city. There is no doubt about it,” said Self. “This is simple extortion because there is no reason for them to give that land.”

Self says that he and the county will continue to side with individual property owners against government overreach:

“The first duty of government is to preserve individual liberty. So it follows the Commissioners Court’s role is to protect the property rights of its citizens. I will continue to make that case on their behalf.”

In these cases, Collin County has set a consistent pro-liberty example of putting local citizens’ property rights above local government encroachment. The courts’ recent rulings validate the county’s stance, set a legal standard for future cases, and provide guidance for legislators on how to further strengthen legal protections for Texans.

During the upcoming special session beginning July 18, state lawmakers have a choice – either join Gov. Abbott in passing his agenda protecting private property rights against local government overreach, or side with government bullies and their tax-funded lobbyists who will oppose pro-liberty reforms.

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Erin Anderson

Erin Anderson is a Senior Journalist for Texas Scorecard, reporting on state and local issues, events, and government actions that impact people in communities throughout Texas and the DFW Metroplex. A native Texan, Erin grew up in the Houston area and now lives in Collin County.