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Computer Science Corp.'s plans for minority contracting criticized

Friday, January 14, 2000 by

MWBE firms feeling frozen out of construction of two office buildings

What was supposed to have been a straightforward discussion of a Managed Growth Agreement (MGA) for Computer Sciences Corp. (CSC) last night turned into more than an hour of tense discussion over perceived snafus in the way minority and women-owned business enterprises (MWBE) are to participate. No one from CSC was present and city staff fielded all questions related to the project.

CSC has winnowed its list of 20 possible general contractors down to four and their bids are due Jan. 28, said Assistant City Manager Toby Futrell. All four are considered qualified and the lowest responsible bidder will get the job, she said. Construction plans were released to the general contractors on Dec. 24, but MWBE firms didn't get the plans until Wednesday, said Council Member Gus Garcia. Futrell said the Associated General Contractors made 100 copies and distributed most of them to the four general contractors and the rest to major planning rooms. The city reproduced its copy and distributed more, Futrell said.

The city is scrambling to assist MWBE firms through extraordinary personal outreach that far exceeds the usual minimum notification for projects that are contracted through the city, which require only a faxed notice to the applicable subcontractors and suppliers who are on the city's list of certified MWBEs. Three hundred and thirteen subcontractors and suppliers were notified, Futrell said. In addition, she said the city had formed a 15-member Enhancement Team (ET), hired one consultant, and would hire another to assist in the outreach. "We will make individual contact outreach to remove as many barriers as possible because we know there's a short time frame," Futrell said.

Futrell said another firm, Bonding and Technical Services (BTS), would supplement the ET, but a principal in the firm, Sherry Aaron, said BTS had not been brought into the project and might not have the resources needed to meet the workload. For a moment, Futrell and Aaron traded mild barbs on the subject of whether BTS was involved. "We will use them as a supplement to the 15-member team," Futrell said. Aaron countered, "That's something we need to talk about." City Manager Jesus Garza said BTS was under contract to the city for other work, and he directed that Aaron meet with Futrell and other city project officials and get on board.

Even with the extra help, MWBE subcontractors would not be able to properly prepare bids because they had only 10 days to do so, instead of the normal 30 days on city projects, said Frank Fuentes, chairman of the Hispanic Contractors de Tejas. Fuentes also criticized the general contractors selected by CSC as having a track record of not properly utilizing MWBE subcontractors. Futrell said that CSC had not been able to accommodate the extra two weeks requested for MWBE firms to prepare bids, and it couldn't add the two general contractors considered friendly to MWBE concerns without opening up legal issues over a selection process that was completed.

Council Member Gus Garcia said, "When we talk about social equity, this is part of it. We need to do things to make this a success. People who are supposed to be beneficiaries of this are saying, 'We're not getting anything.'"

Fuentes said, "I'm sorry to be here talking about this, but the issues we bring are because we feel there's been a commitment to us and the council and I feel they've fallen short." He said that the four general contractors selected by CSC didn't have a good track record for MWBE participation. "We've been invited to a game and given a fixed deck," Fuentes said. He also raised the specter of bid shopping with the private bidding process that CSC will employ. (Bid shopping is a process in which a general contractor might take advantage of subcontractors in a number of ways, including forcing one to beat the bid of another to get work.) Futrell said the city would be "intricately involved" in the bidding process for CSC. "If we get wind of something like this (bid shopping) we'd raise it," she said.

James Harper, president of the Black Contractors Association, also criticized the process, and alleged that BTS had not achieved good results in bonding black firms, a charge rejected by Aaron.

Council Member Willie Lewis thought quibbling over CSC's conduct was unfair to the firm, since the city often does not meet MWBE goals on city contracts. "CSC not doing it does not bother me nearly as much as city contracts," he said. "We talk about it and when it comes up we accept the lowest bids…I really feel like we've been giving a lot of lip service to this whole program."

Futrell noted that CSC as a private firm runs construction contracts differently than the city, and there would be a second wave of work in which MWBE firms may be able to participate.

Mayor Pro Tem Jackie Goodman noted that the CSC project had not been easy for the community to accept. "Having the support of the community we need to understand the community be part of the process, even though it's a private process." She asked that one week be added to the time in which subcontractors may prepare bids. Futrell said she would relay the request to CSC. "Without exception, the time frame has been the single most important thing to them," she said. "We'll ask and do everything we can to try to make this happen."

Garcia said, "We're going to have to go in and do some surgical work on how this works, and we won't solve it by asking questions from Toby." Futrell said Garcia wants to meet Tuesday with CSC project managers, who were out of town yesterday.

City Manager Garza said, "There may have been misperceptions about how this project would work." He said, "We'll give this our best effort," and would work with Garcia and any other interested council office on the matter.

CSC Spokesman Howard Falkenberg of Staats Falkenberg & Partners Inc., contacted by In Fact Daily for comment on CSC's minority contracting, said, "CSC is interested in minority participation in the project in any and all appropriate ways." He said minority general contractors were considered in the process and all MWBE firms that have asked for information on the project have been assisted. He said, "We believe that each of these (general contractor) companies has demonstrated significant efforts to involve significant minority contractors in their jobs." He said, "We will require general contractors to consider MWBE subcontractors on a go-forward basis."

CSC will construct three office buildings totaling 700,000 square feet on three downtown blocks. Falkenberg says the total project cost is estimated at $160 million. Phase I will involve office buildings of 175,000 square feet each on Blocks 2 and 4, which straddle the site of the current City Hall Annex. Mike Curtis said Phase 1 was a "$60 million bidable job."

Falkenberg says that the company will make a quick decision on the selection of its general contractor when bids are opened and CSC plans to break ground by "early to mid-February."

City's commitment to retail in CSC's buildings called into question

Waiver sought for pedestrian-oriented uses on 2nd Street frontage

Is the city going to put itself in the position of not following its own requirements to be friendly to pedestrians? The test case will be what it does with retail space in the first two office buildings to be constructed by Computer Sciences Corp. (CSC). A major concern over these offices was expressed by Council Member Beverly Griffith, who questioned whether the project would comply with development requirements for pedestrian-friendly uses on the ground floor.

In Fact Daily had learned at Wednesday's meeting of the Downtown Commission that the city is seeking a waiver of Section 25-6-591(A)(5) of the Land Development Code, requiring that parking garages be separated from an adjacent street by a pedestrian-oriented use that fronts the street at the ground level. In Fact Daily discussed the matter with Council Member Griffith earlier Thursday, triggering her questions last night when CSC's Managed Growth Agreement (MGA) was on the table for discussion.

The city mailed notices Jan. 7 that the Planning Commission will hold a public hearing on the waiver request Tuesday, Jan. 18. The Downtown Commission did not have the matter on its agenda but when attorney Chris Riley brought it to the other commissioners' attention, a show of hands indicated a strong distaste for the proposal, and a special-called meeting was scheduled for 11:30 a.m. Tuesday to discuss the matter further.

Assistant City Manager Toby Futrell told the council the original agreement required 67,000 square feet (SF) of retail and that has been achieved in the design for CSC's Phase I project for two office buildings. But the requirement to have pedestrian-oriented uses on the entire 2nd Street frontage has not yet been accommodated in the design. The city has two choices: It can add more retail, or it can grant a variance to the pedestrian-oriented requirement, she said.

Howard Falkenberg of Staats Falkenberg & Partners Inc., spokesman for CSC, tells In Fact Daily that CSC is leasing the land from the city, CSC is constructing the office buildings, and the city is leasing the retail space from CSC. He said the city will contract with a retail developer to operate the retail space. "Our objective is to deliver what the city wants," Falkenberg said.

Attorney Jim Cousar of Thompson & Knight, who is assisting the city on the CSC project, says the city is paying CSC $5.8 million for the initial increment of retail space and that space has been mostly allocated to the frontage on Cesar Chavez and side streets. All that remains on 2nd Street at present are small rooms with low ceilings that would not provide enough room for major retail, he said, although they might accommodate a coffee shop. Cousar says the extra 11,000 SF of retail needed to flesh out the 2nd Street frontage would increase the city's lease cost by an estimated $950,000. A more accurate cost will be known when the space has been designed, he said. The waiver is being sought as a fallback position, he said, in case the City Council does not approve funding for the extra retail space.

Futrell told In Fact Daily that the extra retail space being contemplated would boost the rent to be earned. Instead of a coffee shop, the space might attract restaurants and anchors to serve the massive congregation of CSC facilities, a new City Hall, and Amli apartments over the six-block area. Retail experts have advised paying attention to the 2nd Street frontage, she said.

"We're not anticipating needing or using that variance," Futrell told the council. She said staff will be at the Planning Commission hearing Tuesday and will bring the matter back to the City Council at its next meeting Jan. 27. She said staff will also explain the waiver request to the Downtown Commission on Tuesday. Futrell assured Griffith that the MGA does not lock in the waiver for retail space.

Riley was somewhat relieved to hear that the council had discussed the matter last night but was still concerned over the prospect that pedestrian-oriented uses might be waived on a portion of the CSC buildings. "Those two blocks are critical for several reasons," Riley tells In Fact Daily. "They're on either side of the (future) City Hall Plaza. It's critical the city figure out some way to make that retail space work and stick to its commitment to provide pedestrian-oriented uses on the ground floor of garages, especially in those two blocks."

To understand what the blank wall of a garage can do to destroy the appeal of a streetscape one need only stroll down San Jacinto in the vicinity of Scholz Garten, where the state has built parking garages block after block. In addition, the lack of pedestrian-friendly amenities on the ground floor was a big factor in the criticism of the Gotham condominium project that met with a icy reception from the council.

"It would be a real embarrassment if the city does not live up to that requirement," Riley says.

Champions lose Round 2 in zoning case, claim violation of settlement

City Council strongly backing neighbors over property owners

The Champion sisters were disappointed once more Thursday as the Austin City Council voted unanimously on second reading to zone their property at the busy crossroads of Loop 360 and FM 2222, less densely than they would like it. Michael Whellan of Graves Dougherty Hearon & Moody, attorney for Josie Champion, Juanita Meier and Mary Roberson, said he believes the proposal approved by the council violates the 1996 lawsuit settlement agreement between the Champions and the City of Austin.

Following the vote, Whellan told reporters, "It's difficult to negotiate with people who don't negotiate." Whellan was referring to the fact that members of the 2222 Council of Neighborhood Associations (2222 CONA) refused to budge on a traffic cap of 6,500 trips per day for three of the Champions' tracts. Whellan said he had told 2222 CONA members his clients were willing to drop their trips to 10,000 per day, but the neighborhoods would not discuss that issue. It's the traffic cap, more than the actual zoning, which will limit what the sisters can do with their property. The neighbors argue that FM 2222 is already overburdened and that developments already approved will put the roadway at 300 percent of capacity.

Although they showed up in force for last month's meeting, only a handful of neighborhood advocates sat through the long hours it took to get to their case on Thursday. As they did in December, council members voted to approve 260,00 square feet (SF) of limited office, 44,000 SF of neighborhood commercial and 6,000 SF of community commercial, plus 11 single-family homes. Council did not approve any multifamily housing for the three tracts.

Earlier in the day, Council Member Daryl Slusher, who made the original motion at the Dec. 2 meeting for the neighborhood's version, told In Fact Daily that he was inclined to allow the Champions to have multifamily housing if they could do it with the cap of 6,500 trips per day. Slusher said he was interested in finding out whether Whellan had made any progress on making some of that housing "affordable." When the matter came up, Whellan told the Council that he had discussed setting aside 10 percent of the units as "affordable," but that such a move would have no effect on the number of trips per day the Champions were requesting.

Whellan argued to council that capping trips at 6,500 per day violates the settlement agreement because the agreement precludes regulation of impervious cover, except through ordinances in effect on Dec. 8, 1993. Whellan said the Champions would agree to amend the settlement agreement if they could have 10,000 trips per day.

Attorney Jim Cousar of Thompson and Knight, who represents the Jester Homeowners Association, told the council, "There's no connection between impervious cover restrictions and zoning authority." Cousar said trips per day is a function of land use but pointed out that a two-story building would probably generate a greater number of trips but still have the same amount of impervious cover. "You're talking about intensity of use," which the council has authority to regulate through zoning, he said.

Following the vote, Whellan said there were "too many violations of the settlement agreement imbedded in the proposal," including setbacks from Bull Creek and setbacks from property lines. One staff member, who spoke on condition of anonymity, said the Lake Austin Watershed Ordinance, which was in effect in 1993, only prohibits building in a flood plain. There was no requirement for any amount of setbacks from creeks at that time, the staff member said.

Whellan said he expects to come back for third and final reading of the zoning ordinance in about three weeks. If what is finally approved is the same as what was approved on the first two readings, he indicated that he might go back to court on the matter.

It's old home day and good-bye to the old City Council chambers

Past mayors and council members bid the facility farewell

There were scads of council members, many more mayors than it takes to start an argument, business types and former hippies, all smiling and talking like it was old home week. It was actually good-bye old home day–the last day for a city council meeting in what was supposed to be temporary quarters for the council 25 years ago. In addition to all the incumbents, the mayors included Roy Butler, Jeff Friedman, Carol McClellan Rylander, Ron Mullen, Frank Cooksey, and Bruce Todd. The only absent mayor was Lee Cooke. Former council members included Emma Long, Emma Lou Linn, Berl Handcox, Margaret Hofman, Bob Binder, John Treviño Jr., Charles Urdy, Bob Larson, Brigid Shea, and Ronney Reynolds. Also attending was former City Manager Dan Davidson.

Council Member Willie Lewis told Rylander that Mayor Kirk Watson was especially happy that she had attended because she is the only mayor shorter than Watson. At that point, Watson told Lewis his time was up. Former Council Member Bud Dryden, one of the oldest of former city fathers, said being on the council was easy when he did it–"I only had to say 'yes' to my friend Roy Butler." Jeff Friedman said he wanted to claim the record for losing more 6-1 votes than anyone else. Butler said, "We bought this block for $700,000 and then one of the mistakes we made was to give all the council members their own offices."

City Manager Jesus Garza said, "We'll be back at the end of '03," and invited all the former members to celebrate the new chamber when it opens.

About 10:45 p.m. Watson said Council Member Gus Garcia should have the honor of making the motion to adjourn for the last time in the old building, and Mayor Pro Tem Jackie Goodman should be allowed to make the last second, since the two are the first and second longest-serving members of the current council, respectively.

Richard Harris named acting clerk of Austin's Municipal Court

The City Council on Thursday named Deputy Municipal Court Clerk Richard Harris to serve as acting Municipal Court clerk. The current administrator of the court, Paul Martin, is leaving to take a federal court job in Tyler. Martin told the council that Harris, who has worked at the court for 30 years, is a dedicated and hardworking leader and an able manager.

Harris will be responsible for seeing that the court continues to operate 24 hours per day, seven days a week, processing 175,000 parking tickets and 250,000 traffic citations per year, Martin said. In addition, the court makes sure that 60,000 prisoners, charged with everything from capital murder to minor thefts, are properly magistrated. "Half a million people walk through the Municipal Court every year," Martin said, "and most of them are unhappy when they get there. We try to make sure they're not any unhappier when they leave." Martin's last day at the court is Jan. 21.

New board and commission appointments

The City Council yesterday appointed the following new members to Austin's boards and commissions:

Design Commission: Leslie Oberholtzer Urban Transportation Commission: Schleen Johnson

Their work be done…The Charter Revision Commission completed its mission last night and voted unanimously, with Mark McCray and Eddie Rodriguez absent, to give final approval to the previously decided recommendations for single-member districts. As reported by In Fact Daily Dec. 22, the Commission recommends that City Council members be elected from 10 single-member districts and the mayor be elected at-large, with the caveat that two more council seats would be added when the population of Austin increases by 25,000 more than the U.S. Census count for 2000. The Commission is recommending the election for single-member districts be on the ballot in May, on the same ballot as the election of the mayor and three council members… Time lapse photography…An exhibit opening at the Austin History Center Jan. 24 will set historic and contemporary photos side by side. Called Double Takes: Austin Evolving, the large, black-and-white photos taken by Austinite Eric Beggs will be paired with historic shots of Austin landmarks including the Driskill Hotel, Varsity Theater (now Tower Records), and the Elisabet Ney Museum, as well as Mount Bonnell, Congress Avenue and Barton Springs. Did we mention that Beggs is the official volunteer photog for the Save Barton Creek Association? The History Center is at 9th and Guadalupe. For info, call 499-7300… Cedar fever jokes…In the midst of a tense discussion of apparent problems in the way that contracting for minority and women-owned business enterprises is being handled for Computer Sciences Corp.'s construction of two office buildings downtown, still there was room for levity. One of the chief critics of the process, Frank Fuentes, chairman of the Hispanic Contractors de Tejas, stepped to the podium and asked Mayor Kirk Watson to write an ordinance to prevent cedar fever. Without missing a beat, Watson retorted, "When we get to the heart of the campaign, I've got a plan.".

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