Mueller redevelopment consultants to recommend hiring master developer

Project labeled self-supporting financially

A much revised framework for the Redevelopment and Reuse Master Plan for Robert Mueller Municipal Airport (RMMA) was presented last night to the RMMA Redevelopment Advisory Group and a crowd of some 50 spectators, including Council Members Beverly Griffith and Willie Lewis. The presentation by Jim Adams of Roma Design Group Inc. of San Francisco and Jim Musbach of Economic & Planning Systems of Berkeley included radical changes from the original plan prepared for participation by the State of Texas.

Not only will the city not be selling 282 acres to the state, but it will not be getting the income from that sale to invest in infrastructure to facilitate redevelopment. The city should fare better in the long run without the state involved, Musbach said. "The city would have had to manage a contentious process," he said. For that reason, the original plan had called for the city to create a nonprofit development corporation that would have acted as the city's agent with limited authority to transact land sales and leases. The corporation would have been governed by a board with members appointed by the city and state and would have coordinated the two development programs.

Musbach said without state involvement, RMMA's redevelopment looks like a more traditional development that does not need the city's intensive management. Consequently, the consultants recommend that instead of creating a redevelopment corporation the city should select a master developer. Musbach said that typically involves issuing a Request for Qualifications (RFQ). This would not be a sealed-bid process but a means to evaluate candidates across a broad range of issues, including track records and financial wherewithal.

Part of the impetus for recommending a master developer for RMMA is the missteps made at Denver's Stapleton Airport. "When the redevelopment agency was in charge I was working for them and they were very concerned about making mistakes," Musbach said. "They feared new urbanist development because they were afraid of the market. When they turned it over to an entrepreneurial entity, they made the market decision to do a new urbanist development the agency was afraid to do. Public agencies are not in the business of assessing markets the way private entities are."

The good news for the City of Austin is that RMMA looks like a solid economic bet. "We're happy to conclude the project is self-supporting on a financial basis," Musbach said. "It is economically viable and can generate the revenue (for redevelopment)."

Adams said an estimated $80 million to $100 million would be needed to create the "backbone infrastructure" that must be in place to open the site up to redevelopment. This would include major streets, green space, trunklines for utilities, demolition of the airport, grading, revegetation, and off-site improvements necessary to support redevelopment, including intersection modifications, upgrading water infrastructure and possibly wastewater infrastructure. Asked later by In Fact Daily who would be responsible to pay for the infrastructure, Adams said the improvements would be installed by the master developer and factored into the deal.

Initial assumptions about phasing the project, including infrastructure improvements, indicates redevelopment could proceed in five packages (not phases, as some may be combined). Although the packages could proceed at a different pace with the involvement of a master developer, Adams said, the Town Center would likely not start till sufficient residential and office development was on the ground to warrant the retail. "If someone was willing to come in and do that project to the standards planned, it could happen and they could extend infrastructure there," he said. "We just don't want to build our financial analysis on that basis."

"The important thing is to allow the plan to respond to the marketplace," Adams said. "We'll start by putting pieces in place to allow it to go forward with market conditions."

Adams said, "It's a chicken-and-egg situation but we want to create the right conditions for success. Austin Energy has been talking about using the Town Center, he said. "We encourage them to put their office in the Town Center," he said. "We're excited about the possibility because it could create a synergy." Musbach added, (The Town Center) is intended to serve residents and a major user coming in to occupy a lot of space can really accelerate that."

The city owns the land. Adams told In Fact Daily the master developer would have a contract for the entire RMMA project and would buy or lease portions from the city and would be expected to perform. "If so, the developer gets to exercise options on the rest of the site. That doesn't burden the developer with the full cost up front, but the city's values increase." As one portion is developed, the increased valuation of adjacent land would be reflected in the price of the lease or sale of that land, he said.

Musbach told the Redevelopment Advisory Group the master developer "makes money like any developer. They buy land at a price to allow them to put in the infrastructure and sell it at a price supported by the market…The price the city gets for the land depends on what the developer can get for the final development."

Neighborhood oversight envisioned

Ongoing neighborhood involvement will be recommended by the consultants. "It needs to be fleshed out what their responsibility would be and how it would work," Musbach said, but it would be structured "so the neighborhoods always have a voice and any changes would be reviewed in the process."

Architect Girard Kinney, who chaired the original RMMA Redevelopment Process and Goals Task Force, publicly gave up on getting the city to create a redevelopment authority for the 719-acre tract, as that group had recommended. "At some point we have to admit this dog is dead," Kinney said. "Maybe we're going to create a new animal but let's preserve the principle." Noting the Mueller neighborhoods have been working together since around 1984, he said, "Don't just leave it to market forces. It must be better than citizens coming in and making recommendations and the real deals getting made in a back room. Let's be creative."

Stacy Dukes-Rhone, a business representative who also served on previous incarnations of the RMMA Redevelopment Advisory Group, said, "We don't want to hold (redevelopment) down. We want it to happen as quickly as possible–but in a way envisioned by the entire group."

Adams replied, "This is very unusual in that you have come together as proponents of development and not opponents, and that has value to a developer. We think community planning has value on all sides. Even from a developer's standpoint this is important. A developer doesn't have to come in and fight that battle again, about whether it's a general aviation airport."

Later Adams said, "We would propose an oversight board with significant neighborhood representation to continue to monitor the development as it proceeds. We want clear oversight so the principles are carried forward. It would not be involved in every real estate transaction but that entity ensures the vision of the plan is carried forward, realizing there will be changes." He said the oversight board would evaluate proposed changes and make recommendations to the City Council, which will make those decisions.

A new urbanist redevelopment concept

The revised redevelopment master plan, like the original, envisions a new urbanist approach such as is envisioned in the city's Traditional Neighborhood District ordinance. But the RMMA plan has been modified even from the first revised draft presented to the Advisory Group in January (In Fact Daily Jan. 20). The Town Center with its centerpiece Community Park and Lake, has been shifted west so the lake cozies up to Airport Boulevard. "The idea of creating a major lake, a water feature as a recreational and visual amenity to change the identify of this site, is still an important component," Adams said. Neighborhoods would still be within walking distance of the Town Center.

Streets have been rejiggered. The only four-lane through street in the entire 719-acre tract would connect 51st Street to Airport Boulevard on the north edge of Patterson Park. Berkman Drive would enter the site as a multimodal transit boulevard with two light-rail tracks, two lanes for vehicular traffic, bicycle lanes and parking, and thus would not dump heavy traffic into neighborhoods to the north. This transit boulevard would include three light-rail stations, much to the delight of Capital Metro representative Surinder Marwah, a principal planner in long-range planning for the agency. "You could not create better conditions than this for (light rail) to come in," Marwah said, although he offered little hope that RMMA's rail line would make it into the first phase, a 20-mile starter system costing $910 million. "What happens after 2010 is up in the air," he said. "There's lots of opportunity in the next three or four years to decide what goes in after the starter system."

Some 3,700 residential units are envisioned with 40 percent ownership and an affordable housing component. "We want a balanced community and not dominated by one (housing) type," Adams said. The diversity would include single-family lots of 4,000 square feet (SF), zero-lot-line homes on 3,000 SF of land, and townhomes on 2,500 SF lots. There would also be row house and stacked flats. There could be three-to-five story homes above parking garages and a Town Center with even higher density. "We're not going to dictate exactly 3,700 units. There's opportunity for more if the market dictates. The thing that most concerns us is creating the right type of balance," Adams said.

The redevelopment encompasses 4 million SF of commercial, office and employment uses, Adams said. The Town Center would use 250,000 SF for retail. Green space would total 178 acres, a generous 25 percent of the entire site, including an off-street bike route that laps the entire perimeter except for 51st Street, which would have an on-street bike route. "Every resident (would be) within 600 feet of a park facility," Adams said.

Traffic plans mapped

Heidi Ross of Austin-based WHM Transportation Engineering Consultants said the projected land uses would "generate about 51,000 daily trips." This is a reduction of 60 percent from the old plan involving the state, which would have generated about 130,000 daily trips. "That's the reason we went from all the roadways (being) four lanes to one as four-lane," she said.

Traffic counts taken shortly before RMMA closed down as an operating airport showed 21,000 daily trips, less than half what the redevelopment project is expected to generate at buildout. But all the airport trips were funneled through one intersection at the airport's main entrance. The circulation plan for the RMMA redevelopment shows 10 entrances and exits.

Ross said that the Texas Department of Transportation and Capital Metro are studying a high-occupancy vehicle lane that would provide access to RMMA from the north, with traffic flowing inbound in the morning and outbound at night. From the south, however, no HOV lanes are planned north of Town Lake, she said.

What are the next steps?

The Redevelopment Advisory Group plans to meet again May 17 to begin working on draft recommendations that would accompany the completed master plan.

Adams said plans call for Roma to return to Austin in late May with a refined draft plan, including development regulations and guidelines, a disposition and implementation program, and a strategy for selecting a master developer. Once the master plan is approved by the City Council, Adams said the city should go out with an RFQ that indicates what the city is trying to achieve. He said it would likely take three to four months to select a master developer and three to six months of negotiations to get a contract.

Musbach and Adams noted that helping to prepare the RFQ and select a master developer were tasks not included within the scope of work in their current contract.

Council Member Griffith responded to that later, indicating that she would like Roma's continuing help at critical points. Adams said they would like to be involved.

How Mueller redevelopment process would work with master developer

Basic steps outlined by city's consultants

A paper written by Jim Musbach of Economic & Planning Systems includes an outline of three principal elements of a master developer approach that can be used to ensure the City of Austin retains proper controls over the Robert Mueller Municipal Airport redevelopment project to achieve its objectives and that neighborhoods continue to have a voice during the redevelopment process, as follows:

• Redevelopment plan and design guidelines–The adoption of the Redevelopment and Reuse Plan and associated design guidelines by the city will establish a clear regulatory framework for the plan and lay the groundwork for future entitlements by the master developer.

• Development and disposition agreement–The business terms, performance standards, and other criteria that will ensure the master developer carries out the development to the city's specifications may be established in a DDA with the master developer.

• Advisory board–The City Council could appoint an advisory board that includes city and community representatives. The advisory board would provide review and feedback on development issues throughout the implementation program.

Consultant addresses how Stratus Properties might play into Mueller project

Redevelopment master plan should be adhered to regardless

During last night's extensive presentation and debate of the master plan being revised for redevelopment and reuse of Robert Mueller Municipal Airport (RMMA), consultant Jim Musbach of Economic & Planning Systems broached the hot topic of whether the City of Austin might be cutting a deal with Stratus Properties Inc. to get the company to swap land over the aquifer for land at RMMA.

Mayor Kirk Watson has been fending off criticism that there might be a back-room deal brewing with Stratus. (See In Fact Daily April 4, in which Watson appeared before the Mueller Neighborhood Coalition as a candidate for reelection.)

Musbach said he understood the city's preliminary discussions with Stratus involved the possible use of RMMA land in resolving litigation. "In our view, that's not inconsistent with selecting a master developer," he said. "The city could take a look at what an interested developer could bring to the table."

After the meeting, Musbach clarified his statements about Stratus for In Fact Daily. He said a settlement involving such a land swap should have no impact on the master plan for redevelopment and reuse of RMMA. "The plan would be in effect regardless of who does it, Stratus or somebody else," he said.

The concept is that a master developer will have to buy or lease RMMA land from the City of Austin for development. "If Stratus is selected (as master developer), one way it could pay for it is giving (the city) land it owns over the aquifer," Musbach said. "What's the value of the RMMA land and what's the compensation provided?" If there is a land swap, he said, the value of the land received by the city "has got to be commensurate with what would be received on a cash basis."

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