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SOS warns of ‘huge’ Domain tax giveaway by Council

Thursday, May 22, 2008 by Austin Monitor

According to an email sent out by the Save Our Springs Alliance late Wednesday, the City Council “is considering making mandatory huge tax giveaways to the owners of the Domain mall. This could undermine the citizen initiative by Stop Domain Subsidies to change the city charter to outlaw such giveaways.”


However, Council Members Brewster McCracken and Lee Leffingwell both said last night that the Council is unlikely to take such action today. The probable cause for consternation is an executive session item and an action item relating to “possible action giving direction to the City Manager related to the Stop Domain Subsidies proposed charter amendment and its effect on City projects” and amending agreements related to the Domain and the redevelopment of the Mueller property.


Leffingwell and McCracken said the city’s legal staff has warned them that the city’s failure to honor the Domain agreement would endanger other agreements, specifically Mueller.


McCracken said, “both the Mueller and the Domain are done under the same (legal) structure so you can’t separate one from the other… I’ve not seen the proposal from legal so I don’t know…whether you could fix the Mueller and Domain agreements.” Both agreements were done under Chapter 380 of the Texas Local Government Code, which allows for tax rebates under certain conditions.


“I cannot conceive of a scenario where we would do something tomorrow, particularly when we don’t know what the options are,” McCracken concluded last night.


Leffingwell said, “It’s my understanding that there has been a change in state law that would enable certain modifications (to agreements) that weren’t available before…changed the requirements for cities vis-à-vis their Chapter 380 agreements.” However, he too said, “I’ll be frankly surprised if any action is taken on it (Thursday).”


Stop Domain Subsidies gathered the requisite number of signatures to put a charter amendment on the November ballot to stop the city from rebating more than $50 million in taxes over a 20-year period. The city has not made any rebate payments so far and none are due until October.

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