GALVESTON — Although Carol Severance’s lawsuit killed the largest beach resanding project in Texas history, her four Galveston beach properties won’t suffer.

Instead, she could walk away with more than $2 million from the sale of her hurricane-damaged houses at pre-storm prices.

The money comes from a federal program to buy houses in hazardous areas. Twenty-five percent of the buyout will be paid by the Texas General Land Office, the same agency she sued in a case that led the Land Office last week to cancel a $40 million project that would have placed fresh sand on six miles of beach west of the Galveston Seawall.

"It's an ironic result that someone who has been at the trough has also caused the loss of all these public resources to the west end beach front," said Galveston city Councilwoman Elizabeth Beeton.

Severance, a lawyer living in San Diego, Calif., says she brought her lawsuit because she believes in private property rights.

"I didn't get a dime out of this," Severance said.

Although she didn't earn anything off the lawsuit, she made more than $1 million from the sale of two rental properties under the Federal Emergency Management Agency's hazard mitigation acquisition program, intended to buy homes in areas prone to repeated flooding and ensure that nothing is built there again.

The paperwork is complete for her to sell another storm battered house for $336,000, according to city spokeswoman Alicia Cahill. The fourth is tied up in a lawsuit.

Although all four houses were storm damaged, Severance and owners of the other 67 properties in the buyout program will be paid in excess of values in existence before Hurricane Ike struck in September 2008.

Severance's property at 11825 Sunbather, its purchase stalled by a lawsuit, was valued at $546,000 in 2008 for tax purposes, but is approved for purchase at $813,000.

Critical of buyouts

Beeton was critical of the buyouts when they were approved by the City Council last year, pointing out that every buyer of beachfront property is required to sign a document acknowledging that they will be required to move the house when the inevitable erosion puts it on the public beach.

Beeton said Severance has recouped more than 100 percent of the 2008 pre-Ike value from sales of her income properties while hundreds of Galveston homeowners are still waiting for federal money to rebuild or repair their Hurricane damaged homes.

Although $100 million in federal housing funds was allocated for Ike damaged homes, not a single house has been rebuilt in Galveston more than two years after the storm.

The General Land Office interpreted a Nov. 5 opinion by the Texas Supreme Court in the Severance case to mean that the public no longer has an easement on the public beach on the west end of Galveston Island.

The ruling essentially means that there is no longer a public beach past the seawall, according to the General Land Office.

The legal interpretation led Land Commissioner Jerry Patterson to abruptly cancel the beach renourishment project last week on the day trucks were scheduled to begin dumping sand in front of about 450 beachside homes. The law forbids state and local government from providing services on private property.

Patterson is considering putting sand in front of the seawall instead, but officials from his office say that will reduce the amount available to about $12 million because about $25 million in federal money is specified for the west end.

Seeking easement

But project supporters aren't giving up hope. The city is lending its support to an effort to get every property owner on the beach to approve an easement restoring public access, which would allow the project to go forward. That effort is already running into problems.

Steve Schulz, an attorney representing several property owners, told the City Council on Friday that his clients want the easement document changed.

Instead of a rolling easement, which means that the public beach moves inland with the shoreline, Schultz's clients want a static easement, which means the waves would eventually eat away the public beach and what remained would revert to private property.

Patterson, in a phone interview, said static easements are unacceptable. "They were content to have a beach renourishment project back when we had a rolling easement," he said. "If they want a static easement, they are upping the ante."

A single holdout could thwart the effort to obtain the easements.

Moreover, property owners are scattered throughout Texas, out of state and out of the country.

Patterson said he is tentatively giving the effort 30 days, but warned that he could make a decision to use the sand somewhere else before then.

harvey.rice@chron.com