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The Austin City Council split over proposed amendments to the city's Economic Development Polic y on Thursday, with supporters marshalling enough votes to enact four changes designed to clarify the obligations of companies that receive economic incentives or tax breaks from the City in return for the creation of new jobs.

Friday, January 14, 2005 by

While an amendment clarifying that companies obtaining incentives waived their right to assert "grandfathering" claims against water quality regulations passed unanimously, the other three changes to the policy caused some of the original disagreements over the idea to resurface.

The four amendments had been drafted in response to concerns expressed by companies participating in the program. "In trying to implement the ordinances that have recently been passed, we have run into some logistical problems with the policy," said City Manager Toby Futrell.

Assistant City Manager Laura Huffman explained that the primary concerns from companies related to environmental and water quality regulations. "Right now, your environmental language has a component that says all future projects must comply with current water quality regulations. So, in other words, the requirement for companies is in perpetuity," she said. "The companies that we have worked with have struggled with that. Companies don't like to sign agreements that bind them in perpetuity." The potential cost of continuously upgrading water quality protection measures, she said, didn't fit most companies’ business models. "It's an unknown for them forever as they do business in Austin."

The amendment passed by the Council on a vote of 5-2 to address that issue would directly link the requirement to comply with current water quality regulations to the term of the tax abatement. "In other words, as long as you are receiving abatements from City of Austin, you must comply with our current water quality regulations," said Huffman.

Of the four amendments, the one regarding water quality standards had drawn the most attention from the business sector, said Futrell. While the Council has approved abatement deals for Sematech and new Home Depot call center under the policy, Futrell told Council Members that "we have not managed to sign on either of the two ordinances you have passed to date under the current policy." Huffman warned that the existing wording of the water quality provision could also impact future deals. "There are probably at least three, if not four, call centers that are currently looking at Austin to be able to move an operation here, and they, too, are having some trouble with some perpetuity language," she said.

As evidenced by the vote on the measure, Council Members were divided over the benefits of that change. Leading the charge in support were Council Member Betty Dunkerley and Mayor Will Wynn, who helped draft the policy as members of the Mayor's Task Force on the Economy.

Council Member Daryl Slusher and Mayor Pro Tem Jackie Goodman argued against the change. "I'm the source of what's been called the perpetuity problem," Slusher noted, "because I got this amendment to the economic development policy passed which is being abandoned today." Companies that received tax abatements, he said, should be willing to offer something to the community in return above and beyond new jobs. "When a company comes in here and gets tens of millions of dollars in incentives from our taxpayers, I don't think it's very much to ask that they comply with our water quality ordinances on all the rest of their projects," he said. "If they're getting tax incentives from our citizens' pocketbooks, then I think they ought to respect our community values."

Slusher offered his own amendment. Instead of requiring companies to comply with current water quality regulations for the term of their abatement deal with the city, they would have to comply for twice the length of the deal. However, that measure failed on a vote of 3 to 4. "I came up with the idea of double the term, but obviously that didn't get any wings either," he told In Fact Daily . "That's disappointing to me. I figure when companies come here they should accept our values, especially when they are getting tax abatements. This is a community value they were not willing to accept."

After an executive session to provide further information to Council about the legal aspects of the proposed amendment, the measure to link compliance with current water quality standards to the terms of the tax abatement deal passed on a vote of 5-2, with Slusher and Goodman opposed.

The votes on two other changes to the policy were also divided. The Council split 5-2 again on a measure to modify the policy for dealing with companies that fail to live up to their promises of creating new jobs. The original provision would have required companies to pay back any incentives they had already received if they defaulted on the terms of the deal. The new provision removes that payback clause. "What this language recognizes is that as long as the company is performing, we'll continue to cut those checks, but when they stop performing the contract terminates," explained Huffman. That proposal also passed on a vote of 5-2, with Goodman and Slusher again opposed.

A revision of the policy to specifically deal with call centers and data centers also generated extensive debate among the Council. The new rules will make incentives for those projects site-specific, since a growing number of companies are outsourcing their call and data center functions. The growing industry trend, said Huffman, was for independent companies specializing in call and data management to set up centers for several different clients. Staff suggested the change to ensure that third-party customers of those independent call centers would not be bound by future development regulations intended for the operator of the call center. That measure again passed on a vote of 5-2.

"You would listen to this debate and think there's a chasm of difference on this dais," said Council Member Brewster McCracken, who made the motion to support the staff's proposal. The changes were needed soon, he said, since the city has already agreed to incentives for the Home Depot call center. "We're talking about a very narrow difference, but it has created a significant, practical impediment to bringing these $50,000 to $60,000 per year jobs to the citizens of Austin." The measure approved by Council included an amendment by Council Member Raul Alvarez designed to prevent call center firms that receive incentives from attempting to circumvent development regulations if they should choose to open another call or data center in Austin. "If there is a company that all they do is provide call center or data center services, then they should be held to the same standard just like any other major employer," he said.

Billboard rule changes win initial approval

Council votes 4-3 to allow owners to relocate signs

City Council Member Betty Dunkerley finally got her billboard ordinance proposal to her colleagues, slightly after 10pm last night and a year after she suggested it.

The city lost its ability to amortize billboards back in 1986. Dunkerley’s “one for one” proposal would remove billboards from residential locations and move them to high-traffic corridors that might be considered more profitable for billboard owners and as well as the potential property owner, who could make a profit off the billboard.

Mayor Will Wynn said his only reason for even entertaining a discussion of billboard location would be if the city intended to implement a narrow strategy. Billboard relocation comes down to the intersection of those billboards eligible for relocation, locations where billboards could be removed and those locations eligible to take billboards.

“I would like to explore a far more targeted approach and also analyze where we want to push them,” Wynn said. “I want to be supportive of the concept, but at some point there should be some feasibility for very targeted relocation of signs.”

The Council ended up split on the billboard proposal, mostly for lack of information. Dunkerley moved to pass the billboard ordinance on first reading, with the caveat that the proposal would not be ready for second reading until the Council members’ questions were answered. The motion passed on a vote of 4-3, with C ouncil Members Daryl Slusher and Raul Alvarez and Mayor Pro Tem Jackie Goodman voting against it.

Wynn stated his desire for more information but said he would support the ordinance on first reading. Goodman, like Wynn, wanted to see more details on the proposal, and specifically what high-traffic areas might be good candidates for the relocation of billboards. Goodman also suggested a possible finite time frame on the relocation of billboards as an amendment, but Dunkerley was not prepared to accept it.

Slusher said he had seen the Council revisit the billboard issue repeatedly during his years on Council, and noted that the options were few. He said he feared unintended consequence from the ordinance, including a backlash for areas where the billboards were relocated.

“We haven’t seen (new) billboards in 21 years,” Slusher said. “You see a bunch more billboards springing up along these highways and Burnet Road and Ben White, and people are going to be pretty shocked. What I think they’re going to do is that they’re going to start coming down here, and maybe that’s an issue the next Council can deal with over and over again.”

Council Member Brewster McCracken said the map of where billboards might go would be incomplete until the toll roads, or portion of toll roads, were put on the map. Travis County Commissioner Karen Sonleitner said last week she hoped the city would take the initiative to ban billboards from the right-of-way altogether as it zones the land along the toll road.

Prolonging the life of Austin’s billboards, even with the best of intentions, is considered somewhat counterintuitive by some. Girard Kinney and Craig Nasso, speaking on behalf of Scenic Austin, called the policy a “serious error” to entertain the notion of relocating billboards.

Kinney told the Council that he would prefer to see nature take its course. In the last 6 years, a total of 59 billboards have come down in the course of development. Developers take property for development and they pull down the billboards.

“The only way to get rid of billboards is through natural attrition as property is developed,” Kinney told the Council members. “When Rainey Street is developed, the billboards will go down. A lot of them will go down.”

Move billboards to an area that could be decades from development and you’ve extended the life of the billboards, Kinney said. The only real way to get rid of billboards would be to try to put some lifespan on relocated billboards or put the amortization of billboards on the city’s legislative agenda.

Under the proposed ordinance, a non-conforming off-premise billboard could be relocated to another tract, with proper notice and permission of the property owner, under certain conditions. The relocated sign:

• Could be in an expressway corridor sign district or commercial sign district;

Long Center contract changes approved

The City Council yesterday unanimously approved changes to the Long Center’s lease agreement that supporters believe will speed up the start of construction that has been delayed by the economic downturn. Long Center General Manager Cliff Redd assured the Council that Arts Center Stage would not come back to the city later to request funds for operating and management expenses.

City Manager Toby Futrel l said the city would confirm pledges for funding as well as estimated construction costs. According to city Chief Financial Officer John Stephens, the Long Center will deliver an O&M feasibility report to the city within 60 days. The city would then have 30 days to review and approve the report.

According to Donald Rutledge, director of design and construction for the Long Center, it would take two months to deconstruct Palmer Auditorium and another 34 months to build the new building. Demolition is quicker than deconstruction and salvaging the old building’s materials for reuse. But recycling has also reduced the cost, Redd noted. He said the Long Center would cost $278/foot, while the industry average is $600/foot.

Construction could start by mid-year, although Long Center boosters are hopeful of an earlier start date. A major factor driving arts supporters is the planned closing of the Bass Concert Hall on March 31, 2007, for renovation. If construction begins in July, the Long Center would open about three years later, meaning a number of Austin’s cultural performances would have to find another place to entertain. Redd said he has already begun to book alternative venues for opera, ballet and other music performances. He called that decision “a strong Plan B.”

Council Members are optimistic that the contract changes, along with the city’s review of pledges and construction costs, will help speed the arrival of the new performance venue. “I think the Long Center is probably the most important building we need to work on right now, and I’m so glad we’re moving again,” said Council Member Betty Dunkerley.

©2005 In Fact News, Inc. All rights reserved MLK Day coming Monday. . . City, county, and federal offices will all be closed Monday in honor of the late Martin Luther King, Jr. A community march and parade will commence at 8am with a ceremony at the MLK statue on the UT campus. Then the parade will continue to the south steps of the Capitol for a rally and continue to the Huston-Tillotson campus, where there will be a celebration of King and the Civil Rights movement. . . In Fact Daily will take Monday off and will return on Tuesday. . . Newest entertainment venue. . . S hannon Sedwick of Esther’s Follies proclaimed the Council chambers as the newest entertainment venue on 2nd Street last night, pointing to the windows that comprise the west side of the chambers and recalling that her own show started in Liberty Lunch across the street. It’s not clear at this point whether the more entertaining show will be on the inside or the outside. There were no highly controversial items to bring out big crowds or gawkers yesterday, only well-wishers and media folk came out to watch the show . . . Missing us already . . . LCRA General Manager Joe Beal dropped by the Council meeting Thursday afternoon to bring a welcoming gift to the new City Hall. "I got over to the LCRA this afternoon and it was so quiet, I started missing you," he quipped. "So I picked up these flowers and thought I would deliver them and tell you how proud I am of your new home. If you ever have to have some construction done and you can't be here, you're always welcome over there" . . . Board and commission appointments. . . Jerome Garvey was appointed by consensus to the Community Development Commission while Mayor Wynn appointed Ralph B. Weston to the Electric Utility Commission. Mayor Wynn also appointed Tyra Duncan-Hall and Kelly Lynn Roth to the Housing Authority. The Employees Retirement System saw the reappointment of Elizabeth Gonzales by consensus. Council Member Thomas reappointed Ira Strange, Jr. while a consensus of the Council reappointed Carol Martin to the Library Commission. Steve Alvarez and Domingo Villarruel were both reappointed by consensus to the Mexican American Cultural Advisory Board. A consensus appointed Nevic Donnelly to the Urban Forestry Board. Mayor Pro Tem Jackie Goodman reappointed Michelle Brinkman and Council Member Thomas appointed Joi Harden to the Urban Transportation Commission. . . Investigator named. . . City Attorney David Smith announced Thursday that he has appointed attorney Carl Pierce of the Austin law firm of Wright & Greenhill as an independent investigator in the recent deaths of a current and former Austin police officer. In December, APD Commander Shauna Jacobson and her husband, retired Detective Kurt Jacobson died when the motorcycle they were riding crashed into a guardrail on Texas 71 west of Austin. Smith did not say when the report would be completed but said it would be “expeditious.” . . . . Another step towards a director. . . The Travis County Hospital District will make a major step towards hiring a new executive director today. The District’s Personnel Committee, led by Carl Richie, will do telephone interviews with the top 9 candidates culled from more than 85 applications. Richie says at the end of the day, they hope to name the top three candidates, who will be invited to come to Austin on January 28 for face-to-face interviews with the entire board . . . The retail vision thing . . . The Downtown Austin Alliance Winter Luncheon will outline the details of how Austin’s downtown is going to reemerge as the retail Mecca of Central Texas. The meeting is set for noon, Jan. 28 at The Four Seasons. Make reservations by calling 469-1766 or emailing rsvp@downtownaustin.com.

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