Top 5 Questions for Bobak
1
What is the estimated total cost to implement the TIA's required mitigation — and is the $400K+ TMA obligation on top of that or included?
We need to understand the full traffic-related cost stack: TIA-required improvements (signals, turn lanes, overlaps) + TMA mitigation obligation. What's the worst-case total? Is there any portion that can be credited or deferred?
2
With only 2 driveways allowed — Thaxton Rd at 600ft from corner, and Slaughter Ln — does this constrain our development program, and is there any path to getting a 3rd access point?
Does the TIA explicitly prohibit access closer to the corner on Thaxton? Is the 600ft offset from a city standard or a site-specific TxDOT/City condition? Can Mahoney's CP4 concept be made to work with only these 2 driveways?
3
What specific improvements does the TIA require at the Slaughter/Thaxton intersection — signals, turn lanes, widening? Who pays, and is there any cost-sharing mechanism with TxDOT or adjacent developers?
M/I Homes and NRP Group are both developing adjacent properties. Is there any basis for sharing intersection improvement costs across the three adjacent projects? Has TxDOT indicated any involvement in the intersection improvements?
4
Does the existing TMA (Doc No. 2023103745) bind the new buyer, and what specifically are the $400K+ mitigation obligations — are they triggered by development or already legally obligated?
Was the TMA entered into by the current landowner as a precondition to some prior approval? Does it run with the land? Can we renegotiate it with Austin Transportation Dept. before closing, and on what timeline?
5
If we strip the development to only QSR/retail pads (no multifamily), does the TIA and TMA burden drop materially — and what's the minimum development scenario that keeps us below the trip generation thresholds?
The TIA was likely scoped for a larger mixed-use program. If we reduce density or trip-generating uses, can we ratchet down the required mitigations? What's the minimum required for just 4–6 QSR pads?
Problematic TMA Provisions
🔴 $400K+ Mitigation Obligation — Runs With Land
The Transportation Mitigation Agreement (TMA, Doc No. 2023103745) imposes a $400K+ obligation that likely runs with the land and transfers to any buyer. This was not disclosed in early deal materials and emerged as a due diligence surprise. The full scope of what triggers this obligation (permit application? platting? building permit?) needs to be confirmed with Bobak.
🔴 Pre-Approved TIA Not Aligned With Current Concept Plan
The TIA dated October 1, 2021 (LJA Engineering) was prepared before BBM's concept plans. The 2021 TIA may have modeled a different development program than CP4. If the TIA was approved for a specific use mix, any change to our program could require a new TIA — adding cost and time to the feasibility period.
🟡 Only 2 Driveways Allowed — Limits Pad Configuration
The TIA restricts access to: (1) Thaxton Rd at ≥600ft from the corner, and (2) Slaughter Ln. This materially constrains QSR pad visibility and drive-thru stacking. Dutch Bros, Chick-fil-A, and similar QSR tenants prefer hard-corner access. The 600ft setback on Thaxton pushes the primary access deep into the site, reducing frontage utility for individual pad tenants.
🟡 TMA Was Surprise Finding — Disclosure Issue
The $400K+ TMA obligation emerged during due diligence as a surprise, which raises the question of whether the seller or brokers had a duty to disclose this material encumbrance upfront. Kutak Rock is already engaging seller's attorney (Josh Brown) on this. Bobak's assessment of the TMA's scope can support the legal strategy.
Financial Impact Matrix — TIA Cost Scenarios
Each TIA cost scenario adds the cost to the development budget (increasing total project cost). Starting from a 24.6% LP IRR base case. IRR impact is estimated using a simplified sensitivity: each $100K in additional cost reduces LP IRR by approximately 0.8–1.2% on a ~$6.5M acquisition basis with 60% LTV.
| TIA Cost Scenario | Add'l Cost | Estimated LP IRR | Delta vs. Base | Assessment |
|---|---|---|---|---|
| Base Case (No TIA Cost) | — | 24.6% | Baseline | ✅ Strong |
| TIA Cost = $100K | $100,000 | 23.6% | −1.0% | ✅ Acceptable |
| TIA Cost = $250K | $250,000 | 22.1% | −2.5% | ✅ Still viable |
| TIA Cost = $500K | $500,000 | 19.9% | −4.7% | ⚠️ Below 20% threshold — alert John |
| TIA Cost = $750K | $750,000 | 17.6% | −7.0% | 🔴 Renegotiate purchase price |
| TIA + TMA Combined = $1.15M | $1,150,000 | 14.0% | −10.6% | 🔴 Deal structure requires full rework |
Key thresholds: LP IRR target range is 20–30%. If total traffic mitigation costs (TIA + TMA) exceed ~$475K, LP IRR drops below the 20% floor. The current $400K+ TMA obligation alone nearly pushes the deal to the edge. If TIA also requires $100K+ in improvements, the combined burden ($500K+) crosses the threshold. This is the core financial risk of the Thaxton deal as of April 2026.
Note: These are first-order sensitivity estimates. A full model rebuild with Bobak's actual cost numbers is needed for precise IRR recalculation.
Note: These are first-order sensitivity estimates. A full model rebuild with Bobak's actual cost numbers is needed for precise IRR recalculation.