📍 Thaxton Corner

If Thaxton Corner is de-annexed, the tract no longer has automatic access to Austin Water/Wastewater. The primary alternative for commercial development in the Austin ETJ is forming or joining a Municipal Utility District (MUD) or Water Control and Improvement District (WCID).

How it works:

• MUD: BBM petitions TCEQ to create a MUD covering the tract. The MUD issues bonds to finance water/sewer infrastructure. BBM builds the infrastructure and is reimbursed from bond proceeds. Ongoing utility costs are paid by future lot owners through MUD property taxes.
• WCID: Similar to MUD but created by the Texas Legislature or TCEQ. Often simpler for smaller tracts. Same bond-reimbursement mechanism.
• Join existing MUD: If an adjacent MUD already exists and has capacity, BBM can petition to annex the tract into that MUD. Cheaper and faster than forming a new one. This is the preferred option — check if any adjacent MUDs exist.

Alternative to MUD: Even in ETJ, BBM can negotiate a retail water/sewer service agreement with Austin Water. The city often provides service to ETJ properties that were previously annexed, even after de-annexation. This is cheaper and faster than MUD formation — but gives the city leverage in future negotiations. Check whether water/sewer lines currently serve or are near the tract.

What Charter Stone likely is: A private equity firm or family office evaluating direct real estate investments. Their interest in the "SW corner" suggests either the c-store/fuel pad or a premium retail pad.

Most likely outcome: Charter Stone wants to buy the c-store pad from BBM after subdivision. This is the simplest and most valuable outcome — a pre-sold lot at $2.0–2.5M de-risks 23% of base case revenue before BBM even closes on the tract.

What John should provide Michael Searls:

• Site plan showing the SW corner lot and proposed dimensions
• Estimated lot price range ($2.0–2.5M)
• Timeline: platting completion + pad-ready date (est. 6–9 months)
• Utility availability: water, sewer, electric status
• Zoning/permitting: city limits vs. ETJ, permitted uses
• Traffic data: Slaughter + Thaxton counts

Arguments FOR termination:

• BBM is buying, not selling the whole tract. The listing was presumably to market the property. If BBM is executing a subdivide-and-sell strategy, a general listing creates confusion about who controls sales.
• BBM wants to control lot sales directly. Targeted marketing to QSR operators, MF developers, and c-store companies requires specialized relationships — not a general listing.
• Commission protection risk. Most listing agreements give the broker a commission on any sale during the listing period and a protection period after. If CLD is owed a commission on BBM-sourced lot sales, that's a drag on returns (1.5–3% of $11M = $165K–330K).
• Craig and Kent's recommendation carries weight. They have the deepest Austin CRE relationships and believe CLD isn't adding value.

Arguments AGAINST termination:

• Review the agreement first. What's the termination notice requirement? Protection period? Carve-outs?
• Active buyer leads? If CLD has buyers in the pipeline (especially for the MF tract or c-store pad), terminating could cost those leads.
• Relationship cost. Is the CLD/Sean Murphy relationship worth preserving for future deals?

Questions that MUST be answered before deciding:

• ✅ Do the base case numbers work? → Yes. 24.6% LP IRR, 35% margin. Pro Forma →
• ✅ Is there real buyer demand for the lots? → Yes. QSR operators actively seeking pad sites. QSR Demand →
• ✅ Is the $10K extension fee justified? → Yes. $10K optionality on a $2.6M+ deal = 260:1 ratio.
• ⬜ Has any deal-killing issue emerged in diligence? → No known issues. Environmental, title, survey — all clean so far.
• ⬜ Are partners (Kent, Craig) aligned on extending? → Confirm with partners.

What $10K buys you:

• Additional feasibility period through May 4
• Time to finalize QSR demand verification
• Time for initial de-annexation legal consultation
• Time to advance or decline Charter Stone conversation
• Time to resolve CLD listing question

What happens if you walk:

• Contract terminates — earnest money returned (if still within feasibility)
• Loss of deal with proven economics (24.6% base IRR)
• Loss of de-annexation upside optionality
• Time and diligence costs sunk (attorney fees, survey, etc.)
• Another buyer may acquire the tract — it's well-located land

Action items before April 29: