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Council creates Mueller tax increment zone

Friday, December 17, 2004 by

Funding would pay for infrastructure in redevelopment area

Unanimous approval of the Mueller tax-increment reinvestment zone was one of the last actions the Austin City Council took during its final meeting at the Lower Colorado River Authority board room.

The vote guarantees that the incremental increase in property taxes in the coming year at Mueller – primarily from the construction of the Dell Children’s Medical Center – will go into the account to pay for infrastructure for the 700-acre redevelopment project.

Deputy Chief Financial Officer Vicki Schubert made the presentation to Council at last night’s meeting. Schubert told the group that the remaining tax entities – ACC, AISD, Travis County and the Hospital District – had waived the 60-day hearing notice to get the tax-increment financing zone approved by year’s end.

Catellus Austin LLC, which will serve as master developer on the Mueller project, has agreed to put up $35 million in interim financing toward the cost of infrastructure before the tax dollars begin to flow. If the Mueller project were to fail, or Catellus were to pull out of the project, then Catellus would be liable for that first $35 million, Schubert said.

The city has committed $46 million toward the infrastructure on the Mueller property. Over the next 20 years, property tax dollars from the TIRZ, and some sales tax dollars, will pay for that $46 million, plus interest. Then the balance of funding will flow directly to the city. At this point, that’s expected to total $60 million over 20 years.

Council Member Daryl Slusher pointed out other entities will benefit from the increased value of the Mueller land but only the city has committed its tax dollars to the project. He asked if other jurisdictions, such as the county, could join later.

“When we made the presentations to create this TIRZ, we told them it would be with just the city as a participant,” Schubert told Slusher. “It does not close the door for people to join later, through an interlocal between the city and that entity.”

The total cost of the Mueller project is estimated at $246 million. Once the land is developed and sold, Catellus is expected to take a $43 million profit from the project.

An 11-member board, which will include 7 members appointed by council and 4 representatives from other taxing jurisdictions, will govern the TIRZ. The county has agreed to appoint Planning and Budget Office Executive Director Christian Smith. Other jurisdictions can choose, or not choose, to appoint members to the board.

The TIRZ board would have oversight over the budget to put infrastructure on the property. It would not have input into the actual Mueller development plan.

Council approves First Night funds

Thomas, Slusher vote no on sponsorship

The City Council yesterday approved $44,000 in funding for First Night, a project touted to generate dollars for the city and put money in the pockets of local artists at the same time. But Council Members Danny Thomas and Daryl Slusher had some sharp questions about why this event—a newborn—should move ahead of community events that had been denied city funding even after proving they could succeed without the city’s help. In the past, all such events have been required to exhibit a successful track record of several years before asking for city sponsorship. The matter was on the consent agenda, but Slusher and Thomas both indicated they should be recorded as voting “no.”

“It’s an excellent project, but I wanted to know how we came to be waiving the fees on this particular project,” said Thomas. “First of all, is this going to be an annual thing?”

Mayor Will Wynn, whose wife is one of the prime movers behind the project, responded saying that the item was technically sponsored by Council Member Betty Dunkerley and Mayor Pro Tem Jackie Goodman. The Mayor then noted, “We certainly want this to be an annual event."

Wynn went on to say the initial First Night event would be on December 31, 2005 and the funding would come from the current fiscal year’s budget. He said such events have been held in other cities across the country with great success and there was no reason to believe that Austin’s would not be at least as successful.

Dunkerley began her defense of the project by explaining that First Night would be a non-alcoholic event for families on New Year’s Eve and that most of the money would be for artists to begin preparing their projects.

Thomas interrupted her, saying he understood the nature of First Night and approved of it. However, “To me (the fee waiver) wouldn’t be fair because several other groups have come to me” to request funding but had been denied.

Dunkerley said that each Council has to decide what projects it will sponsor but that this event was unlike others because “this particular event, if successful, will be one of the major economic development activities” for Austin. Those cities that have sponsored First Nights have filled hotel rooms to capacity, Dunkerley said, indicating that First Night could bring in the same amount of revenue as Austin City Limits. “This year I would be recommending it as the kickoff of a very major arts’ celebration,” she said. Goodman, an artist, echoed Dunkerley’s sentiments. Thomas said they should make sure that those groups who had not received sponsorship knew why this project was put ahead of theirs’ in the funding line.

Council Member Raul Alvarez also endorsed the project, saying that First Night would bring together all of Austin’s arts organizations. Those groups have competed fiercely for funding each summer as approval of the city’s budget draws near.

Thomas responded that supporters of other events had been requesting city sponsorship for years to no avail and that First Night had been presented to the Council so recently that he felt uncomfortable voting for it.

Slusher wanted to know whether Council was making a commitment "to spend money in next year's budget, which is sort of an unusual move."

The Mayor said, "I don't see this as a commitment for future dollars.” He explained that the money would come out of the current budget and help the private sponsors of First Night raise additional funds. "What this does do, in my understanding, is it adds this to our calendar of city co-sponsored events. " He named Martin Luther King's birthday, Cinco de Mayo, the Fourth of July and the Texas Independence Day celebration as some of those appearing on that official calendar.

City Chief Financial Officer John Stephens explained that $5,000 would come from the Parks and Recreation Department, $19,500 from the Austin Convention Center and $19,500 from Economic Growth and Redevelopment Services.

Council says good-bye to LCRA with a laugh

The Austin City Council's era of meeting in the LCRA Board Room came to a close at 8:17pm Thursday as the Council adjourned its final meeting of 2004. After holding most of its regular meetings in the rented facilities on Lake Austin Boulevard for the past five years, the Council is scheduled to hold its first meeting of 2005 in the new City Hall. The final vote of the evening came shortly after 7 o'clock when the Council agreed to a waiver on construction within the 100-year flood plain for a home near Onion Creek. That was followed by an executive session dealing with the Long Center for the Performing Arts.

Mayor Will Wynn offered his thanks to the LCRA for the use of their meeting room and the kindness of the agency's staff. "I've been on the dais for four and a half years, and this is the only home I've known," he said. "Initially, I suspect we didn't anticipate having to stay this long, but we greatly appreciate the hospitality shown by our partners here at the LCRA." He offered a proclamation declaring Thursday " LCRA Day" and series of proclamations thanking the LCRA, management, LCRA Rangers, and technical and support staff.

The proclamations came along with several gifts, including some both humorous and symbolic. City Manager Toby Futrell presented the LCRA staff with a small fish tank containing a "sterile Asian grass carp" (actually a goldfish) which have been used to control the spread of hydrilla in Lake Austin, along with a Christmas wreath made out of the fast-growing weed.

Other Council Members also praised the LCRA for its support over the past five years. "It was not central, but it was a nice place to be and I'm glad we were able to use it," Mayor Pro Tem Jackie Goodman told In Fact Daily . "Some LCRA employees went way beyond the call of duty to help out."

LCRA officials offered their own thanks in return to the Council. "It's been a great arrangement, I'm glad you chose this public meeting site. We hope it was convenient for you. It felt like three months, not five years," said the LCRA's Christopher Kennedy. "We only ask that you don't forget our neighbors across the street who have depended upon the economic boost… the Hula Hut, the Boatyard, and Mozart's. It's been important to the local neighborhood. You're welcome anytime. We really appreciate the partnership we have."

While both LCRA and City officials were complimentary of the other agency, both sides are also ready for the Council to have a permanent home. Mayor Will Wynn displayed a calendar he said had come from the office of LCRA General Manager Joe Beal. "Apparently for the past 250 weeks, Joe has been counting down the Thursdays until we all left," the Mayor said, prompting a round of laughter from those in the room. "We'll give this back to Joe for his remarkable patience, and he now knows there are no more Thursdays left."

Spanish company wins contract for Trans Texas Corridor

Gov. Rick Perry called yesterday’s award of a contract on an 800-mile segment of the Trans-Texas Corridor to parallel I-35 (TTC-35) both “historic” and “stunning,” on the same scale as the creation of the interstate highway system almost 50 years ago.

The Texas Department of Transportation and Madrid-based Concesiones de Infraestructuras de Transporte (Cintra) will negotiate a contract over the next 60 days, then complete a development agreement over the next 12 to 14 months to develop the TTC-35 from the Rio Grande Valley to Oklahoma. Out of that deal will come $6 billion in near-term projects, plus more than $1 billion in concession fees that must be spent within the I-35 corridor. Cintra was chosen over two other firms, Fluor Enterprises Inc., of Sugar Land, and Dallas-based Trans Texas Express, according to the Quorum Report.

“When I introduced this project just over three years ago, I said it was going to be model not only for the state but for the world,” Perry said. “What this will accomplish is stunning. I wish there was a bigger word for it.”

The long-term plan will be mapped out on a 50-year horizon and eventually could include rail, freight and utility traffic, as well as high-speed rail between the major cities in the state. In his presentation, Phil Russell, head of the Texas Turnpike Commission, said the project would roll out “as the market dictates” rather than on the typical timeframes mandated by the flow of federal and state dollars.

Transportation projects were divided into near-term, mid-term and long-term initiatives under the Request For Proposal (RFP). Near-term, Cintra has proposed extending State Highway 130 south to I-10 and north to Dallas. The company, which will partner with Zachry Construction, also proposes an additional corridor in Dallas.

Cintra also has expressed an interest in putting a southeast loop around San Antonio, which could be an important component of keeping Toyota happy. They’ve also discussed possible rail relocations in the Austin-San Antonio corridor. Those two projects would be done with the assistance of state dollars.

Cintra says the schedule of projects is based on the current level of toll revenues being collected on other facilities in the state. It does not include any concessionaire contracts that may be awarded on the tollways, a major revenue generator for other toll road projects.

Dallas Mayor Laura Miller has expressed concern about TTC35, fearful that the project will divert traffic off the Interstate 35 commercial corridor in Dallas. Chair Ric Williamson said Perry has requested that an advisory board of both proponents and opponents to the project be created to assist with the project’s execution.

Nightmare returns . . . It’s been nearly three years since the Austin City Council amended its billboard ordinance. That’s not nearly long enough, in the opinion of veteran Council Members Jackie Goodman, Daryl Slusher and Raul Alvarez. All three of them have experienced the pain of the billboard wars. They are not anxious to experience it again. So, in an unusual move the three of them voted against Council Member Betty Dunkerley‘s seemingly innocuous item to set a public hearing on billboard regulations for January 13, 2005, the first meeting in the new City Hall. To get some background on this subject, see In Fact Daily February 11, 2002 . . . Appointments . . . The City Council approved a number of appointments to boards and commissions at the last meeting of the year, including Rodney Ahart, who works for the American Cancer Society and is leading the city’s anti-smoking petition drive. Other appointments included Bettye Taylor to the Airport Advisory Commission; Sue Graze and Kathleen Harman to the Arts Commission; Jill McCrae to the Child Care Council; Ivan Javier Naranjo to the Community Development Commission; Perry Lorenz and Beth Ann Sprengel to the Downtown Commission; Henry Flores to the Housing Authority; Richard Amato to the Resource Management Commission; Stephen Martin to the Telecommunications Commission; Eleanor Powell to the Travis Central Appraisal District; and Chien Lee to the Water and Wastewater Commission . . . No action on ETJ release . . . Austin will hang on to control of 48 acres in the city's extraterritorial jurisdiction for another month. The city is working on an arrangement to release its authority over two tracts near Nutty Brown Road, which would allow Dripping Springs to assume jurisdiction over the land. However, the Council postponed a vote on the item for the second time Thursday, delaying action until the first meeting of 2005 . . . Coming soon . . . On Monday In Fact Daily will review the big events of 2004 in the eyes of city leaders. After that, we will be on a two-week hiatus . . . Campaigns for People… The First Unitarian Universalist Church of Austin will host Fred Lewis, Legal Counsel and Director of Campaigns for People at its weekly forum Sunday, from 11:30am – 12:30pm. He will speak on Campaign Reform in Texas. Lewis is an Austin lawyer with many years of consulting at the State Capitol on issues related to ethics in politics. He is currently directing the grassroots programs Campaigns for People and Clean Up Texas Politics.

Copyright 2004 In Fact Daily

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