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Cities and neighbors keep fighting a proposed sewage plant north of Denton as TCEQ sends case to a hearing

Denton, Sanger and Rainbow Valley residents are pressing state regulators over a Megatel sewage plant planned north of Denton after TCEQ referred the permit to a contested hearing.

Isabel Abbott

October 10, 20262 min read

Civic Water Governance - illustration, Jake Team LLC

Denton, Sanger and a group of rural property owners are still pressing state regulators over a proposed sewage plant that would serve a lagoon-centered housing development north of Denton, after the Texas Commission on Environmental Quality pushed the case toward a formal legal hearing.

Dallas developer Megatel and landowner Jim Horn, who once served in the Legislature, want the facility on 300 acres between Denton and Sanger, near FM2153 and FM2164, roughly 9 miles north of Denton. If permitted, the plant would discharge roughly a million gallons of treated water for a planned mixed-use community of homes built around an artificial lagoon. The discharge would flow into Clear Creek and, from there, Lewisville Lake.

Case sent to administrative hearing

Last month, TCEQ postponed a public meeting on Horn's application and referred it to the State Office of Administrative Hearings, which will determine whether the application meets state requirements. Keel, TCEQ's executive director, wrote in a Sept. 8 notice that the referral followed a Sept. 4 request from attorneys representing Horn and Sanger Laguna Azure for a direct referral to a contested hearing.

What the cities say

Both cities sent letters to TCEQ in late August asking again for a contested hearing, and both dispute parts of Keel's answers to the nearly 400 public comments filed against the permit.

In an Aug. 25 letter, Stephen Gay, who oversees water utilities and street operations for Denton, wrote that the discharge could worsen water quality in Clear Creek and Lewisville Lake, which residents use for recreation, and could feed more algal blooms. He noted the city protects the creek through its Clear Creek Natural Heritage Center, which covers more than 2,900 acres. Gay also wrote that Denton remains willing to provide sewer service to the property and is designing a gravity main that he expects to be built within three years, roughly 4 miles from where the plant would discharge.

Sanger's attorney, Nathan Vassar, wrote on Aug. 28 that TCEQ's response mischaracterized the city's offer to negotiate service pending a feasibility study, a request he said the applicants never answered.

Residents and the developer

People who live in Rainbow Valley, a rural stretch between the two cities, say the project would disturb native prairie and a wildlife preserve. Members of Stop the Stink-Sanger are scheduled to sit down Oct. 28 with state Rep. Jared Patterson, R-Frisco, at the Sanger chamber's office. Group member Sam Alexander told the Denton Record-Chronicle the goal is "to keep TCEQ from just rubber-stamping the permit," and said he believes the applicants are trying to avoid a contested case hearing.

In a 2025 interview, Horn said he has confidence in the agency's judgment and expertise. "With my background, I have learned over the years that the Texas state agencies have done a good job building this state," he said.

Source: Denton Record-Chronicle.

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Denton Record-Chronicle

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Isabel Abbott

Isabel Abbott covers Denton city hall, the council, and county government.

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