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Baker blasts staff for mishandling task force ideas

Thursday, July 22, 2004 by

Historic Preservation Task Force recommendations being ignored

The Zoning and Platting Commission will hold a special meeting next week to review the report of the Historic Preservation Task Force. Although the ZAP is not required to weigh in on the report, Commission Chair Betty Baker had requested the item be placed on the ZAP agenda a few months ago. But the result of that request left the long-time historic preservation proponent angry over the way the Task Force's report has been handled.

Instead of the Task Force report, the item on the agenda referenced the city staff's report on possible changes to the historic preservation ordinance. A similar change at a recent meeting of the Planning Commission drew Baker's ire, and she unleashed her complaints again during Tuesday’s ZAP meeting. "I asked that it be placed on the agenda as a report from the Historic Preservation Task Force. It was posted in that manner. The agenda was distributed for comments, and the agenda was changed. It does not even mention the Historic Preservation Task Force, of which four people on this commission spent six months," she said. "Who changed the agenda and by what authority?"

Historic Preservation Officer Steve Sadowsky explained that there had been some confusion among the staff over what the exact wording of the agenda posting should be. "I will take full responsibility for the change in the posting language. We were unclear as to the presentation that you wanted," he said. "It is my fault for not contacting you to discern what you wanted."

Baker had previously been surprised when the item went before the Planning Commission, where she expected a report on the Task Force report. Instead, commissioners received a report on the staff's recommendations. (See In Fact Daily, July 16, 2004) Their recommendations contain significant differences from those of the Task Force concerning tax abatements for historic properties. After six months of work to draft the document approved by the Task Force, Baker said, members expected a better reception. "We have been surprised . . . We have been sandbagged from every direction. I am really chagrined. I am frustrated . . . probably angry would be a better word . . . at the way this has been, I could say handled, but I would prefer to say mishandled," she concluded. "I've mentioned (it) to a couple of Council members . . . Why would you ever appoint a task force if the staff is going to usurp it?"

Since the ZAP agenda posting only dealt with the staff's suggestions for modifications to the historic preservation ordinance, Baker moved to pull the item from the agenda on the grounds that the Task Force report could not be discussed. Several other ZAP members sought out ways to include the task force report in their discussions during that meeting, but eventually agreed instead to hold a special called meeting on Monday, at 5:30pm to discuss the Task Force's recommendations. That time was chosen to avoid conflict with the Historic Landmark Commission, which is scheduled to meet at 7pm the same evening.

The ZAP is not required by the City Code to review the proposed ordinance changes, as they go through the Planning Commission. But ZAP commissioners agreed that since four of their members had worked on the Task Force report, it would be appropriate for them to review the final document. ZAP Commission Chair Betty Baker may not be at Monday's meeting. "If you want to have a special called meeting, that's fine with me," she told her fellow commissioners. "Mr. Martinez can chair . . . He's more of a masochist than me."

The Planning Commission has sent the matter to its Codes and Ordinances subcommittee and the full Commission will take up the matter again on Tuesday of next week. Both groups want to have their comments finalized in time for the City Council meeting next Thursday, when the item is scheduled to be on the agenda.

Downtown real estate values revealed by Waller study

Consultant Steve Spillette's study into the viability of the Waller Creek tunnel project has provided a window onto the value of the downtown real estate market.

In Spillette's study, the three options on the tunnel project were measured against a financial analysis of the expected returns on office, retail, residential and hotel markets downtown. The returns measured how much land could reasonably be developed, of what type and within what time frame. Overall, the study was more conservative than the previous work completed by Kellogg, Brown & Root.

The projections, measured against the cost of the project, showed a range from strong economic gains for the low-end project to break-even for the high-end tunnel project. The projections are based on using a tax increment financing (TIF) district in which the city and the county would participate, plus sales tax revenues.

In a meeting hosted by the city last week, Spillette described the study as a market-based approach rather than a supply-based approach. Projections were based on current trends in downtown real estate, as well as recent development in the city's core. The study also sought to project revenues if businesses were developed at the top of slopes as well as at creek level.

In the category of office space, Spillette has projected that given the current supply, there will not be additional demand for an office tower until 2009, at the earliest. The market has both existing and new supply, in the form of the Frost Bank Tower. Rumors also indicate at least one more such building in the real estate pipeline.

Other factors also play a role in reduced demand. Mergers like Bank One and Chase, for instance, are likely to mean the consolidation of some space. Downtown can also expect substantial blocks of office space to be put back on the market when the new City Hall opens. Hence, it's unlikely to see a significant demand for office space on Waller Creek, unless it's part of a mixed-use project for creekside development.

Retail has not exactly been rosy in downtown Austin. Much of the first-floor space in downtown office buildings put aside for retail is still available. But the kind of retail attracted to the Waller Creek project would be specific, primarily dominated by bars, nightclubs and restaurant space, like the San Antonio Riverwalk, Spillette said.

Waller Creek may have some retail appeal because of its proximity to the Convention Center, but it will also be competing with developed retail along Second Street and the significant retail node accompanying the Whole Foods complex on the west end of downtown. Spillette says his projections indicate that the Convention Center expansion will drive some demand for space, but that the demand will not be significant.

The cost of real estate along Waller Creek is likely to drive lower-end retailers out, Spillette said. The real estate along the San Antonio Riverwalk is so hot that some space generates revenues in excess of $1,000 per square foot, primarily among restaurants. Because of the high cost, it's likely that retailers along Waller Creek would be specialty retailers such as artisan shops or art galleries. The more deeply that retail can embed itself on the slopes of the creek, the more valuable the property will be.

The one bright spot in the economic forecast is that demand for residential property downtown remains high. A large number of residential units have been absorbed into the downtown market, with the focus on multi-family mid-rise to high-rise apartments. Downtown properties are continuing to demand, and generate, the highest rents in the region, he said.

Residential units would be either condominiums or apartments, with a stronger market for condominium ownership downtown. The upswing in the job market and the growth of downtown development promise continued demand for such units. The market for larger size, higher cost condominiums appears the more promising, Spillette said. The projections in the Spillette study assume a 50-50 mix of apartments and condos.

On the hotel end, no demand appears to be on the horizon. The opening of the Hilton Convention Hotel alone meant a 20-percent increase in the downtown hotel market. At least three other properties are scheduled to open in the coming year or so. Spillette projected that demand for a new hotel may not be in the works until 2008.

The Samsung celebration . . . Samsung is holding groundbreaking ceremonies for the expansion of its Austin semiconductor plant today. The City Council recently voted to allow Austin Energy to upgrade the utility infrastructure to provide the plant the service it needs to expand its capacity. The project will allow the company to add more about 300 permanent new jobs at the facility. Actual construction will start on Friday, and the project should be completed by the middle of 2005 . . . A call for help from a small business . . . Book Woman, 918 W. 12th Street, is struggling to overcome the impact of the Lamar construction project, increased rent and a less than bullish economy. The women who own the store have sent out a call for those who have shopped there in the past to drop by soon so they can make their August rent, while promising to find more economical quarters. The shop’s owners hope to make it to their 30th anniversary, which is coming soon . . . Commissioners meet . . . Travis County Commissioners have a work session scheduled from 1-5pm today. They will be getting a final overview of the budget before getting the details next week .

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