The Lakeway City Council on Monday approved two related items from Hurst Harbor Marina'owner Rick Miller: a change to the city'future land use map and a planned-unit development (PUD) rezoning for about 26.9 acres near City Park and Claravon Drive.

The council voted unanimously to change the future land use designation (item 21) from commercial/residential to mixed use, then approved the PUD (item 22) 6-1 after adding conditions, including a cap on short-term rentals and a requirement for an updated traffic analysis.

Council members and staff said the revised application reduced building height and refined the site plan from an earlier 2023 submittal. The current proposal calls for a six-story building in the basin with three below-grade parking levels, up to 146 condominium units and about 460 wet slips for marina use, plus clubhouse, retail and amenity space. The developer proposes a sidewalk extension along Claravon and two options for parkland dedication: a fee-in-lieu ($3,000 per dwelling unit, or $438,000 total) or a combination of in-kind improvements and a smaller fee. Zoning and Planning Commission recommended the fee-in-lieu option and recommended approval of the PUD by a 4-3 vote.

The council attached several conditions before approving the PUD. Those conditions include: 1) limiting short-term rentals to no more than 10% of residential units (the applicant and staff will enforce the limit through the PUD and HOA rules); 2) requiring an updated traffic-impact analysis that accounts for any restaurant and retail spaces that will be open to the public, and returning a traffic mitigation plan if the road segment does not meet capacity; 3) constructing sidewalks along Claravon prior to development and coordinating exact location with city staff; 4) requiring council approval for any extension beyond the PUD'approved site-development timeline (the PUD requires submittal of a site development plan within five years); and 5) retaining the parkland-fee option as determined by the city during permit review.

The council heard more than a dozen speakers in chambers and many written and online comments, most opposing the rezoning and raising concerns about traffic, environmental impacts, dock density, loss of park views and short-term rentals. Supporters who spoke said redevelopment would modernize an aging marina, increase property tax revenue and add waterfront housing options.

Mayor and councilmembers who supported approval said the PUD is a limited alternative to higher-density zoning that could be applied by right, and that the conditions tighten city control over outcomes. Opponents said the project remains too large for the narrow Hurst Creek basin and will change the character of the City Park waterfront.

The developer and architect said the plan reduces earlier height and massing from previous submissions, keeps the building within the basin rather than on a ridgeline, and will use on-site excavation to build below-grade parking rather than dredging the lake. Several city and outside agencies still must review aspects of the project, including LCRA, the U.S. Army Corps of Engineers and the fire district.

Council action approving the PUD now allows the developer to proceed to preliminary plan and site-development reviews under the conditions the council attached. The PUD vote requires a supermajority under the protest provisions noted in state law and local code; the council'level vote in favor was 6-1.

The city manager and planning staff said the project will return to staff review and permitting, and that the council will have to consider any future extension of the PUD timeline under the condition that such extensions require council action.