Wetlands Maul?

Drivers passing the intersection at Grand Parkway and Interstate 10 near Katy hurtle through without a second look. There's little to see here. The northern side of the freeway is a quiet piece of overgrown land fringed by new housing developments.

On Monday, that was all supposed to change. Developers were lining up high-profile guests for a long-planned groundbreaking ceremony. The occasional birdcalls were to be replaced by the roar of bulldozers, and the booming economy would roll along to add another sprawling retail center, dubbed Houston Premium Outlets mall.

But that never happened. A lawsuit challenging key elements of the permit process had been filed, and the developers, yet again, put the silver shovels and hardhats back on the shelf.

This is just the latest skirmish in a long-running battle over the fate of this property, the stage of an intense intrigue in which a once-secret pact with an environmental group has intertwined with dark accusations of a clandestine opposition to form a plot with all of the twists and turns of a Raymond Chandler detective novel.

And the last chapter has yet to be written.
The key players include leaders of the Sierra Club, which formed a secret pact with developers to stand aside from the project while playing a shell game with $350,000 still under its control. There's an unidentified agitator in the wings fighting the mall, who some say is a paid agent provocateur. There's a secretly commissioned archaeologist, an elderly environmentalist with very expensive attorneys paid by anonymous backers and a group of puzzled observers who say this is one development for the record books.

The highlights:
After first opening a Pandora's box of ominous warnings about damaging this section of the Katy Prairie wetlands, members of the Sierra Club struck a deal with the mall developers. The organization's original stance on the pact was contained in a five-line press release hurriedly typed up in its attorney's office allowing that the club had reached an agreement with the developers, Westside Ventures, that would allow preservation work on the Katy Prairie wetlands through a "third-party trustee." But after several days of stonewalling the Houston Press on details, club members say now that the money -- $350,000 -- was shuffled into a newly created trust fund run by the club's attorney, but under the direction of the organization's board.

Later on, say club leaders, they'll use the money to either buy wetlands and donate the property to a closely connected environmental group, or just give the money to that environmental group itself.

Initial Sierra Club opposition was only one of several roadblocks thrown in the path of would-be mall developers hustling to compete with another huge mall project now under construction on a site just two miles west on I-10. An anonymous opponent to Premium Outlets mall commissioned a 32-page study of the land's potential archaeological value. The plot thickened again when one homeowners' group in the area dropped its challenge to the mall after discovering they were being spurred into action not by a concerned resident but by what they believe to be a paid operative working the area to stir up opposition.

Even after all that opposition had been calmed, and all the right permits obtained, a feisty, 74-year-old environmentalist with high-priced legal help jumped into the fray at the 11th hour. She seeks an injunction against construction and touts her Sierra Club membership, even as the group angrily disavows any involvement and darkly questions the forces marshaled behind her.

"There's some bizarre shit going on here," says Bill Stransky, wetlands chair of the Sierra Club. "All I can say is, it's very weird."

Developers pushing ever westward to keep up with the outward migration of new housing complexes recently fell in love with the area -- and it is not hard to see why. About 20 miles to the west of downtown, it offers a burgeoning middle-class group of customers in search of retail stores close to their new homes. What better place to build a megamall or two?

Until recently, though, developers with their blueprints in hand hit a nasty snag: the marshy territory known as the Katy Prairie wetlands, home to migrating birds and dear to the hearts of area conservationists.

One of those developers is Westside Ventures, an arm of Houston's Interfin Corporation, which was selling land to one of the biggest mall builders in the United States. This land falls under the direction of the U.S. Army Corps of Engineers, no friends of the Sierra Club. Stransky pungently sums up the club's attitude about the corps in a few words: "I think they're the equivalent of the anti-Christ when it comes to environmental protection."

In that environment, Stransky says the Sierra Club was forced to wage war against the development -- even though the group intended to compromise for a cash settlement that would allow a closely linked organization the chance to buy and preserve a valuable piece of wetlands.

As for the intersection of Grand Parkway and I-10, well, that was a sacrifice they were willing to make.

"Not all wetlands are created equal," says Stransky. The mall was being built on a piece of the Katy Prairie already surrounded by residential developments. It makes a lot more sense to buy more ecologically important land with money provided by the developers.

The Sierra Club's original position, though, took a strategically harsher tone with regard to protecting the land proposed for the mall development.

"The Sierra Club," steamed indignant club lawyer Jim Blackburn, "is opposed to the unmitigated destruction of this amount of wetland acreage and extremely concerned about the cumulative impacts of this wetland acreage loss within the Katy Prairie."

That was May 12, as Blackburn ripped through an 11-page protest to the Corps of Engineers detailing allegations that homeowners in the area weren't properly notified, archaeological sites were being destroyed, pipelines improperly moved, endangered species from the bald eagle to a rare flower known as the Prairie Dawn threatened -- and on and on, indexing a litany of potential problems.

But developers broke that logjam with money.
Three weeks ago, Blackburn created a nonprofit group called the Friends of the Katy Prairie Conservancy, which is affiliated with another environmental organization called the Galveston Bay Conservation and Preservation Association. Blackburn is sole trustee of the Friends of the Katy Prairie Conservancy.

Westside gave $350,000 to the Friends of the Katy Prairie Conservancy, and after initially refusing to discuss the terms, Stransky now candidly says that the use of the money will be determined by the board of the Sierra Club.

Up until last week, the club was steadfastly refusing to provide any of the details of the pact. In a tersely worded three-point statement, Blackburn said that a preliminary agreement had been reached and that "additional projects will be initiated within the Katy Prairie to address wetland concerns of the Sierra Club raised by the project. The projects will be administered by a third-party trustee."

"I have absolutely no comment as regards anything else," said a querulous Blackburn when pressed on the still-secret elements of the pact. "We have worked out our differences with Westside Ventures."

None of the money, Blackburn angrily insisted, was going to the Sierra Club. End of story, agreed Sierra Club Chair Frank Blake. The club and developers had agreed to keep the details secret.

Today, red-faced club members say the money will be held only briefly by the newly crafted Friends of the Katy Prairie Conservancy, as they decide whether to buy wetlands and give the property to the Katy Prairie Conservancy, a nonprofit group run by Carter Smith and originally formed by environmentalists including founding board members Stransky and Blackburn -- or just give the money to them directly.

Says Stransky: "We're just trying to find a way to show that we're not stealing the money." He added that they had decided to keep the deal quiet for a variety of reasons. They want a matching grant for the money, and there's a better chance of this happening if a different group without a regular presence at the grant table goes in search of the money.

There was another advantage for the developers in setting up a new group: Donations to what is known under U.S. tax codes as a 501C3 group like the Friends of the Katy Prairie Conservancy are tax deductible. Donations to the Sierra Club, a 501C4, are not.

Sierra Club activists were on familiar ground in strong-arming Westside. Their agreement is a duplicate of another deal recently completed to let the Mills Corporation build an even bigger mall just a few miles away. In that agreement, Mills handed over $200,000 to the Katy Prairie Conservancy to buy another piece of the wetlands to conserve so the Sierra Club and other protesters would stand aside and let the bulldozers roll.

Only now, the price has gone up. Westside had already agreed to give the Katy Prairie Conservancy 162 acres of wetland, along with a cash grant of $56,700. At the end of July, as the corps insisted they were satisfied, the long-awaited permits were issued and the developers prepared to roll.

Groundbreaking ceremonies were slated for August 25, and Giorgio Borlenghi, president of Houston's Interfin Corporation, general partner of landowner Westside Ventures, was in an upbeat mood.

"I think everything is absolutely complete," he said two weeks ago with evident satisfaction.

Borlenghi had every reason to be happy. Westside Ventures has been in a race with the Mills Corporation to get construction going and start signing tenants. Hang-ups with the Sierra Club could only slow Houston Premium Outlets mall.

Builders of the Houston Premium Outlets mall -- Chelsea GCA Realty of Roseland, New Jersey, and megadeveloper Simon DeBartolo Group -- prepared to push ahead on August 25 with no more unpleasant talk about the destruction of wetlands in the Katy Prairie.

Then along came Barbara Zimmelman, better known as Barrie to her friends in the environmental community.

In a federal lawsuit filed just days ago, the 74-year-old Sierra Club member filed for an injunction aimed at stopping the mall development. The attorneys for Zimmelman -- including Lee Godfrey of the blue-chip law firm Susman and Godfrey -- filed for a restraining order, accusing the Corps of Engineers of failing to handle the permit process properly.

"Losing a vital ecosystem forever far outweighs any interest the public has in seeing construction of a business park begin immediately," the suit stated. "I get a little irritated at the rather cavalier attitude about the law," says Zimmelman.

She got irritated after two attorneys from Washington, D.C., called. They represented the Citizens to Save the Katy Prairie, an anonymous group "that didn't want to be in the forefront," she says. Godfrey, a big-time Democratic contributor slated to be the next ambassador to Brazil, signed up as local counsel.

For Corps of Engineers officials, it was just the latest plot twist to shake their heads over. Earlier this year, they received a secretly commissioned archaeological survey outlining potentially significant historical sites on the property. The corps investigated, turning up no sign of anything worth preserving.

Rice farming and other uses of the land have essentially wiped out any traces of 19th-century settlements that may have been in the area, says corps archaeologist Bryan Guevin.

He and others at the corps are still scratching their heads over who commissioned the first study and organized opposition to the mall. Guevin earlier told the Wall Street Journal that the secret study, completed by Janet Wagner, was "very James Bondish."

"There's been a lot of weird stuff like that," says John Machol, the corps official who was in charge of issuing the permits, which went out late last month. In addition to that study, fliers from a group described as "The Friends of Katy Prairie" were distributed to homes in the area, outlining objections to the mall. Machol had never heard of the group and never identified anyone associated with it by name.

Mike O'Brien, president of the Houston Homeowners Association, ventured into this shadowy terrain earlier this year when someone introduced himself as a local resident and asked him to join the opposition. It turns out, O'Brien says, he later discovered his visitor was secretly working for a group opposed to the mall.

"I asked him point blank who he represented, and he refused to tell me," says O'Brien.

No one seems to be able to identify who has been behind the scenes pulling strings. A spokesman for the Mills Corporation vehemently denies organizing any kind of opposition to the rival mall.

Meanwhile, Mills recently sent out a press statement saying it was well under way with that building project and that the corps had issued Mills its wetlands permit on August 6. The Mills mall should be open to shoppers by fall of next year.

For the developers of the Houston Premium Outlets mall, it was just more bad news in a strange series of setbacks.


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