Fort Bend

Fort Bend County, city of Arcola battle over land annexation agreement

City officials argue the initial deal was invalid because the land tract is not adjacent to city limits.

85 acre tract of land in Arcola, TX.
Arcola Municipal District
The 85-acre tract of land Arcola is trying to de-annex from.

The small city of Arcola, about 25 miles south of Houston, is in the midst of a legal dispute with Fort Bend County and a municipal management district.

The dispute centers on an 83-acre tract of land off Fenn Road, west of Arcola, where a developer plans to build 350 single-family homes.

The city is trying to de-annex the land, and the management district and county are suing to stop them.

Arcola annexed the land in 2021. Both the city and the county agreed to pay 85% of their taxes from the area to the Arcola Municipal Management District No. 1.

In exchange, the management district would use the funds to build public infrastructure for the area.

Now, the city wants out of the deal. In court documents, they argue that the annexation is void because the land isn't adjacent to city limits.

During a July meeting, Arcola Mayor Fred Burton said he felt it was unfair that the city would only receive 15% of the tax revenue for the property, under the initial deal.

"We could do better for this community at this time than what's being offered to us," he said during the meeting. "We could do better."

Burton did not return requests for an interview.

The management district and the developer said the city has used the threat of de-annexation to try to get them to finance additional public works projects that are outside the scope of the development.

Compass Land Development, which plans to develop the land, is not involved in the lawsuit. Nino Corbett, president of the development company, said in a statement that the development is "well worth fighting for."

"There is a lot on the line right now in Arcola — critical infrastructure, loss of meaningful net profit to the City, and an end to development of new communities ... within the City of Arcola all hang in the balance," he said in the statement.

Joel Cleveland is an attorney at the Muller Law Group, which is the management district's general and bond counsel.

"I don't see any reason why this deal should fall apart," he said. "I do think it would be bad for the management district, bad for the city, bad all around."

Fort Bend County Attorney Bridgette Smith-Lawson did not respond to requests for comment.

The lawsuit remains ongoing.