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Staff says selling Mueller land only reasonable choice

Friday, May 7, 2004 by

Lawyer calls working with ground leases administrative and financial headache

The city staff on Thursday presented a strongly worded recommendation to sell the land at Robert Mueller Airport. After reviewing information provided by proponents of leasing, the city’s legal counsel and financial officers came to the same conclusion: leasing would be an administrative and financial headache of such gigantic proportions as to be impossible.

“We strongly recommend selling as an alternative that is superior to ground leasing from the point of view of what’s in the best interest of the city,” said attorney Jim Cousar of Thompson and Knight, the City’s outside legal counsel. “Legally, a sale works and a ground lease does not work. “

Leasing only the ground on a long-term basis, Cousar advised, would result in complicated entanglements with potentially thousands of property owners, placing a huge burden on the city staff to administer as well as on the Council perhaps, to untangle. It would also be problematic for homeowners or commercial developers, since they would retain ownership of their buildings once the lease expired. “What do you do with the house at that point? Ground leasing for residential purposes is virtually unknown in Texas,” he said.

Leasing all, or even part, of the 700 acres would also put the city in the position of becoming one of the largest landlords in the area. It would fall to city staff to act as leasing managers and coordinators, review new tenants, check insurance provisions and review building plans. Those duties would likely occupy several city employees or possibly an entire department. “Of particular interest to the Council . . . each lease would need to come back to the city for approval,” Cousar said. “Since the residential properties total in the thousands . . . it would be a substantial responsibility for the Council to approve those leases.”

Acting Assistant City Manager John Stephens advised that along with creating extra work for city staff and the Council, leasing the property would have the effect of denying the city the up-front revenue needed to build the site according to the community-approved master plan. While a long-term lease would provide the city with revenue in the future, Stephens said, the city would need those funds sooner rather than later. “The infrastructure and public facilities costs are substantial,” he said, identifying water and wastewater lines, design and consulting services, wet ponds, landscaping and other amenities that could cost up to $175 million. “Our conclusion is that the redevelopment according to the master plan is not feasible without public financing and this is something that we have said all along about the Mueller plan. We always assumed that we were going to have to have some level of public financing in that.”

The city could choose to issue revenue bonds based on the projected income from the leases or get money for the infrastructure redevelopment up front. But both Stephens and Cousar advised that the return would not be significant enough, and the city would still be faced with significant costs over the first ten years of the project with insufficient income to cover them. The city staff also analyzed leasing only part of the land, but still concluded that it would not be a worthwhile proposition.

“Under the lease scenario, we also have to drop down and have an immediate contribution from the General Fund,” Stephens said. “In order to implement the master development plan, we have to go with a business plan under which we would sell the land rather than lease the land. The project is simply not economically feasible under the lease scenario without putting in money from the city up front and without paying for some very expensive financing options.”

The Robert Mueller Municipal Airport Plan Implementation Advisory Commission will hear the same presentation on the sale vs. lease question its meeting next week. A public hearing on the subject will follow at next Thursday’s City Council meeting.

Water line to Hamilton Pool Road debated

Some residents cite need, but others say surface water drives development

More than 250 people showed up at the Dripping Springs High School gymnasium last night to tell the Lower Colorado River Authority (LCRA) what they think about a planned surface water pipeline that would provide water to residents along Hamilton Pool Road. The availability of surface water would undoubtedly increase the pace of development along the pristine corridor.

Shelly Baines of the Hamilton Pool Scenic Corridor Coalition said her organization is not opposed to piping in surface water, but the initial result of the LCRA’s proposed deal would bring at least 1,300 new homes to an environmentally sensitive area.

“We’re asking for the LCRA to postpone this decision,” Baines said. The LCRA, she said, is “ushering in fast-track development.”

Jon Beall, former president of the Save Barton Creek Association, said the LCRA should use its influence to protect the Barton Springs watershed. Beall said there are many issues concerning how the proposed water pipe will be built.

“They’re planning for future development,” Beall said. “It’s very important that the LCRA be recommending that local cities (prepare),” Beall said.

Beall said the size of the pipe is still in question—“a 16-inch going down to a 12-inch.” He added that whatever size pipe is, the LCRA needs to plan to preserve open space because readily available water is often a precursor to significant development. The board is scheduled to make a decision at their next meeting on May 19, which will be held at LCRA’s Canyon of the Eagles Nature Park i n Burnet County.

“The availability of surface water drives development, not the other way around,” said Jim George of the Friendship Alliance. “Look for an alternative,” he said to heavy applause.

Hamilton Pool Road connects Ranch Road 12 to State Highways 71 and 290, and the serpentine, two-lane highway also leads to Hamilton Pool located in northern Hays County. Hamilton Pool features a unique swimming hole with cascading water that falls into a natural basin.

The audience regularly applauded speakers who cited the need for a water pipeline right along with those warning about suburban sprawl, traffic accidents, and the onset of high-density development that might follow access to surface water.

Bill McCann, spokesman for the LCRA, said, “I can’t speak for the board,” but he said the board and staff have put forth a serious effort to listen to all sides. “They heard a wide variety of comment,” McCann said. He pointed out that the board held a lengthy meeting April 21 and heard many of the same speakers who spoke at Thursday’s public meeting.

Nel Penridge, who lives off Hamilton Pool Road, said the proposed water line, with the development that would follow, would make the road more dangerous. Penridge said she operates a well on her property and relies on well water, but she opposes the water pipeline because of the development that would follow.

Penridge characterized Hamilton Pool Road as “an already dangerously overcrowded road.”

Travis Wilson, who lives at Deer Creek Ranch, said he supported the pipeline and produced slides showing the discolored state of his well water. Wilson said the hard water causes pipes to fall apart, and he echoed the sentiments of other residents who described leaking pipes and faulty water supply systems due specifically to the bad water pumped from area wells.

Deer Creek Ranch President Sam Hammett said wells in the area would drop 100 feet or more in the next decades. “That’s the reason we have hard, magnesium-rich, stinking water.” Hammett said the folks along Hamilton Pool Road want potable water. “We need water and we ask you to bring it to us,” he told the LCRA.

Area resident Denise Ston e asked the LCRA to slow down. “The developers have had an opportunity to negotiate,” Stone said. “The developer will benefit.” She said residents along Hamilton Pool Road have not had a chance to negotiate. “I ask that you let responsible planning happen first.”

“Don’t take a piecemeal, incremental approach,” warned Hamilton Pool Road resident Jimmy Right.

“There is a difference between growth and sprawl,” said Bee Cave resident Candice House. She said the availability of surface water would encourage sprawl. “This plan as it’s proposed right now should not go forward.”

In response to the public interest, the LCRA moved the venue from Dripping Springs Primary School to the High School because it became apparent that attendance would be heavy.

UT neighbors, developers sing 'Kumbaya'

One group's request leads to postponement of vote on UNO

Mary Gay Maxwell of the North University Neighborhood Association (NUNA) told the Council last night that creating the Central Austin Combined Neighborhood Plans and the University Overlay Plan (UNO) has “been a pretty miraculous occurrence for all of us.” Two years ago, Maxwell fought bitterly to stop developer Mike McHone from getting approval for the Villas on Guadalupe. But the planning process envisioned by Mayor Pro Tem Jackie Goodman has worked. “So, now, Mike McHone is my new best friend,” she said.

Maxwell was the lead speaker in an organized coalition of university area residents, property owners and developers urging the Council to adopt the overlay, which allows for a vast increase in density in the West campus area while protecting single-family neighborhoods farther north. Maxwell explained that those who have worked on the plan for nearly two years hope that the city can use the overlay and plans as a model for the other central city neighborhoods.

Representatives of NUNA, West University, Shoal Crest, Heritage, Eastwoods and Hancock neighborhood associations and University Area Partners lined up to praise the plan and urge adoption of UNO.

Al Godfrey of the Heritage Neighborhood described how he sat down with John Foxworth of the Shoal Crest Neighborhood and Barbara Bridges of the West University Neighborhood to try to develop a vision for the area. “The UNO,” he said, “started not as a developer idea, but from us three. We thought what was really lacking was a vision—what should this area of the city be.”

In addition to neighborhood and development representatives, architects Juan Cotera and Phillip Reed, who sit on the city’s Design Commission, told the Council about the design guidelines they had drawn up for the neighborhood. Reed said they were able to test their guidelines against some real world UT area developments that were in the development process at the time. Economist Dwight Stewart talked about the economic benefits the city would realize as a result of increased density in the area, including $1-2 million more in property taxes. Stewart, who was commissioned to do an economic study of the plan, compared the impact of the new development to that of a new ball park, roughly $500 million over a 15-year period. That figure includes an estimated 3500 to 4500 new jobs, he said. (See In Fact Daily, May 6, 2004.)

In order to get more density but still retain pedestrian-friendly developments, Reed explained that developers would be offered incentive-based design guidelines. So, in exchange for certain entitlements on their property—such as greater density and height—they would make sure their buildings were compatible with the neighborhood and with a pedestrian environment.

Although they expressed support for the plan and overlay, the Council decided not to take action because of a request from the West Campus Neighborhood Association. That group, represented by Jeff Heckler, had requested a postponement of the case, but their request was overlooked until after the hearing had started. Mayor Will Wynn said he would leave the hearing open so that those who were unable to attend last night would be able to address the Council. The next hearing will be on June 10. Except for Heckler and a handful of other speakers who apparently had not participated in the planning process, there was no dissent. It was such a lovefest that Mayor Pro Tem Jackie Goodman said, “I was waiting for the angel to come speak.”

Karen Orsak of Metro Realty, part of the West Campus group, said, “We are not opposed to the plan, but they do have concerns with UNO. We’d like to see,” buildings “built for today’s world.” Orsak scoffed at the idea that students would leave their cars behind if given a chance to walk to school. She said they would need the cars, at the very least, to go to work and to the mall to go shopping. She also said the idea of allowing buildings to 175 feet is “creating a lot of fears” even though there are few properties that would be able to take that much height. It would be better, she said, to look at those on an individual basis.

Supporting the hospital district . . . Dozens of doctors, nurses and EMTs are expected to turn out at a rally at Brackenridge Hospital this morning, and then vote as a group to show broad-based support for the Travis County Healthcare District. Brackenridge is an early voting location today, as the campaign for the May 15th election enters its final week. Several medical groups will announce endorsements of the Healthcare District, including the Travis County Medical Society, Austin-Travis County EMS Employee Association and Emergency Nurses Association. Health care professionals will also respond to some of the tax issues raised during the campaign. Early voting continues until Tuesday . . . Wynn wants additional toll road briefing . . . Mayor Will Wynn has called for an additional public hearing on TxDOT’s plan for toll roads in the Austin area. That would mean an additional month to allow the CAMPO board to hold a meeting on the proposal at their June 14 meeting. Wynn’s aide, Matt Curtis, said Thursday that the Mayor had won agreement on the second hearing from Senator Gonzalo Barrientos, who chairs the group, as well as from Rep. Mike Krusee and a representative of the Central Texas Regional Mobility Authority. If there were a second hearing, the board would likely postpone a vote until July 12 . . . Wells Branch unhappy with road proposal . . . North Austin residents are challenging TxDOT to find a better way to handle the toll road extension to MoPac. They will hold a special meeting at 7pm Tuesday at the Well Branch Recreation Center, 3000 Shoreline Blvd . . . Appointments. . . Council Member Brewster McCracken appointed Snapper Lee Carr to the Electric Utility Commission and Mayor Will Wynn appointed James Howerton to the Telecommunications Commission. Sabino Renteria was reappointed by consensus to the Community Development Commission. He is the East Austin neighborhood representative. Rob Latsha was reappointed by consensus to the Bond Oversight Committee. Mayor Pro Tem Jackie Goodman reappointed Joan Burnham to the Child Care Council . . . Remembering school desegregation suit . . . Next week is the 50th anniversary of the historic Supreme Court ruling in Brown vs. Board of Education. The unanimous ruling is considered one of the most important in the American struggle for racial equality. KLRU’ s local issues program Austin Now and the AISD are presenting a documentary next Friday chronicling how Austin responded to the ruling. Those featured in the program include Volma Overton, the former NAACP president who successfully led the fight to desegregate local businesses and schools in Austin during the 1960s; Pat Forgione, AISD Superintendent; and Austin resident Nancy Todd Noches, one of the 13 plaintiffs in the landmark lawsuit. The film also includes a commentary by UT Law Professor Gerald Torres on racial equality and the meaning of civil rights in education. After the film host Tom Spencer will be interviewing County Judge Sam Biscoe, Torres, Overton and others.

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