Velocis is ready to fight for industrial project in the Austin suburbs

A Dallas-based private equity real estate investor has proposed mediation to resolve complaints about its West Austin Business Park project.

Velocis's 25,000-square-foot industrial site near State Highway 71 and Sweetwater Village Drive has drawn the ire of two neighboring Austin suburbs, Bee Cave and Lakeway, which have filed suit to stop construction of the project, the Dallas Business Journal reported.

The dispute centers on a development agreement with the property's previous owner, WS-COS Investments LLC. The 2015 agreement, which Bee Cave officials say is intended to govern the site's current and future use, limits development to commercial or office use.

Bee Cave argues that Velocis' industrial plans are incompatible with that agreement, citing concerns about noise, pollution and traffic. Lakeway joined Bee Cave's lawsuit on August 19, objecting to the project's proximity to its residential areas.

Bee Cave Mayor Kara King said she was not informed about the project until after construction began. King said she only learned about the project by “observing the construction,” as did residents.

Bee Cave residents have argued the project should be stopped because it is not appropriate for the area. Despite community opposition, Velocis, led by co-founder and managing partner Fred Hamm, remains optimistic about the project's future.

“Velocis firmly believes that it will prevail if compelled to pursue the city's claims in court,” a company spokesperson said. “Velocis remains focused on working constructively with the city of Bee Cave to achieve a successful outcome for all parties and has proposed that both parties participate in joint mediation, which is the preferred path forward.”

Because the site is in Bee Cave's extraterritorial jurisdiction, Velocis has maintained that it is not bound by the city's zoning regulations. In an Aug. 13 response, Velocis maintained that its project meets current standards for commercial use and that it informed Bee Cave of its plans before purchasing the property in 2023.

Velocis, which began construction in December, claims the West Austin Business Park is designed for companies seeking proximity to western Austin communities, not large-scale clients. No leases have been signed for the project so far. KBC Advisors is listed as the broker, according to an online brochure.

— Andrew Terrell