AUSTIN (KXAN) — A subcommittee of the Texas House of Representatives heard Monday how negotiations to save a state park from sale and permanent closure failed, with a developer calling the state’s offer to purchase the land “not palatable and not constitutional.”

Fairfield Lake State Park, about 70 miles east of Waco, will close Tuesday after almost 50 years of public access.

KXAN previously reported the current landowner, Vistra Energy, has leased land for the park to the state at no cost since the 1970s. Vistra is selling the land to Todd Interests, a Dallas-based developer.

In a Monday hearing of the state’s House of Representatives Appropriations Subcommittee, a representative for Todd Interests said plans regarding the development are confidential. The Dallas Morning News reported earlier this month that plans call for an exclusive community with multi-million dollar homes and a private golf course.

When a coal plant located on the lake closed in 2018, Vistra gave the Texas Parks and Wildlife Department a two-year notice that it intended to terminate its lease in October 2020. The lease was extended further until fall 2022, contingent upon the sale of the land. During that time, Vistra publicly listed the property in 2021.

“Vistra encouraged the TPWD to submit a bid on the property, but they did not,” Meranda Cohn, a spokesperson for Vistra, told KXAN in a statement. The company then entered into a contract with Todd Interests in April 2022. At that time, Vistra ceased negotiations with the state.

“Vistra is in an existing contract with a buyer, and we are not legally permitted to negotiate with any other potential buyer, including the state of Texas,” said Brad Watson, Vistra’s senior director of community affairs.

The property was listed online for more than $110 million. Cohn could not disclose how much Todd Interests is paying for the property, citing confidentiality provisions in the contract.

“Vistra has the right to sell this property, and Todd has the right to buy this property,” TPWD Chairman Arch ‘Beaver’ Aplin said in Monday’s hearing. “I’m not suggesting [otherwise]. I’m trying to save this state park.”

Aplin told the subcommittee that he attempted to acquire the land from the developer with two different approaches. First, he said he offered Todd Interests a “reasonable real estate fee” to take over the contract that had been signed with Vistra. That fee — 6% of the value of the land — was about $6.6 million.

“Shawn [Todd, founder of Todd Interests] told me that was not acceptable to him. That wasn’t enough money,” Aplin said. “He wanted $50 million, not $6.6 million, and 250 acres [of land].”

Aplin told subcommittee members when that offer was rejected, he offered Vistra $60 million for the property, as well as a conservation easement which would give the company a “substantial tax savings.” As for Todd, “I asked him to take a philanthropic, altruistic approach,” Aplin said. “Let us pay back his expenses and help me save this state park.”

“We were told to walk away,” said Blake Beckham, a representative for Todd Interests in Monday’s hearing. “Maybe we’ll cover your expenses and name a campsite after you, but no money at all for the loss of our opportunity.”

“That’s not how the government is supposed to operate in Texas,” Beckham said, calling the state’s offer “not palatable and not constitutional.”

That concern was echoed by some of the subcommittee members, including Rep. Steve Toth (R-The Woodlands). “The idea that Texas would take property from a private owner without paying fair market value is just absolutely offensive to me,” Toth said.

“The fact that the state never even approached making a market value offer told us the state really wasn’t that interested,” Beckham said.

Beckham also criticized the negotiation process itself, saying no formal offers were ever submitted.

“The negotiation has been difficult, haphazard, by text message, verbal conversations,” Beckham said. “It hasn’t been how you would expect to do negotiations, especially when there’s already a contract and someone is trying to come in and take over.”

The property in question is more than 5,000 acres, including the 1,460-acre state park and 2,400-acre lake, as well as additional land on the north side of the lake.

In Monday’s hearing, Aplin said the state previously offered to purchase the park itself but not the remaining property, but that Vistra “never would agree to it,” instead wanting to sell the property as a whole. More recently, TPWD has attempted to acquire the entire property.

“When you had [the opportunity to purchase] it all, you only asked for a portion, and now that you’re being asked to negotiate on a portion, the position is, ‘Now I want it all,'” Rep. Trey Martinez Fischer (D-San Antonio) said to Aplin. “I don’t understand that from a negotiation standpoint.”

Aplin said that’s where Todd Interests’ plans for the lake come in, telling subcommittee members that if the state were to purchase just the park, the developer would still own the water rights to the lake.

“[Todd] has told me that he intends to market the water rights to the [Dallas/Fort Worth] Metroplex and that he intends to sell 14,000 acre-feet of water to the Metroplex,” Aplin said.

The TPWD chairman told the subcommittee if that were to happen, the lake would reduce in size by about a third and drop in elevation by 15 ft, according to department modeling. That would cause “devastating effects” on the lake, Aplin said, adding that boat ramps and fishing piers would also be rendered unusable.

“If he has the right to take the water out, we’re dead in the proverbial water, so to speak,” Aplin said.

The subcommittee also touched on the possibility of the state using eminent domain to acquire the land. Rep. Angelia Orr, who serves on the subcommittee and represents the district in which the park is located, filed a bill earlier this month to allow for that possibility. House Bill 2332 would give Texas the power to acquire the land through eminent domain. Beckham said it would be a “shame” if it came to that.

Eminent domain in Texas can only be used if the land involved is acquired for a public purpose and the landowner is adequately compensated, according to the State of Texas Landowner’s Bill of Rights. Beckham said if it got to that point, Todd Interests would calculate the economic value of the entire project as completed.

“The state of Texas has a very specific Landowner’s Bill of Rights for any type of eminent domain scenario,” Beckham said. “The state hasn’t followed one dot or tittle of that. We’re confused why it’s been handled this way. We’ve done our best, but the time for those deals was in the past. We’ve got commitments to partners, investors, lenders. We have a deal to close, and we’re moving forward.”

Vistra currently also leases land to the state at Martin Creek Lake State Park, in Rusk County, and at Lake Colorado City State Park, in Mitchell County. It also leases more than 1,000 acres for public hunting in Robertson County.

“Whatever happens here, regarding the future between Vistra and Texas Parks and Wildlife, we look forward to continuing our partnership with the department… to support natural habitats, wildlife and create lasting outdoor opportunities for Texans now and into the future,” Watson said.