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Villa Muse walks away from Austin

Tuesday, May 6, 2008 by Mark Richardson

Developers of the proposed Villa Muse studios announced Monday that they were pulling out of negotiations with the City of Austin, thus reassuring other communities vying for the prize that they would not be using them against Austin for leverage.


In a prepared statement, Villa Muse officials said, “Despite Villa Muse’s best efforts to find a financially viable way to build within Austin’s ETJ, the City’s staff and the Villa Muse team have been unable to come to an agreement meeting the needs of both parties. Since Villa Muse is committed to building the project in Texas within two years to keep Texas competitive, the team has decided to focus on a new location for the film, music, video, animation and gaming studios.”


The developers of Villa Muse have said in recent weeks that they are in discussions with several other Texas cities – including Bastrop — to find a suitable location for their project.


Monday’s announcement marked an official end to a process that few believed ever had a chance to succeed. City Council voted 4-3 in March to reject Villa Muse’s proposal to allow the developers to remove 1,900 acres of land from the city’s extraterritorial jurisdiction in order to develop it outside of the city’s regulatory process.


Real estate broker Jim Carpenter owns the “cow pasture” east of SH 130 near the confluence of Gilliland Creek and the Colorado River where Villa Muse was to be built.


Villa Muse was planned to be a huge project. Developers planned to build the core of a major movie and digital media complex, including soundstages, post-production and music facilities. Once the studios were up and running, housing was to be developed on the site for people to work and live in the same area.


However, city staff who studied the proposal raised questions about the city’s ability to control critical aspects of the development, particularly environmental standards, if the project was released from the city’s ETJ. There was also concern about the city’s ability to annex the property back into its ETJ and into the city in the future.


Council reactions


“I hope that the only take-away from this is that these projects can happen in Austin, either just outside our ETJ, or better yet, work with us on what we had on the table, which is decades-delayed annexation, allowing the opportunity for non-city taxation to be used to help fund the infrastructure,” Mayor Will Wynn said. ”I think our track record speaks for itself when it comes to supporting film here in town but we also have a very significant track record when it comes to protecting the environment and when it comes to planning for future growth.”


City Council Member Brewster McCracken – who voted for the project — said, “We were not being asked to create any tax incentives. The land will probably remain a hayfield for several generations to come. However, one of the challenges of all of this–on the Villa Muse side—I think they were not giving us enough information to make a decision. I think the deadline (from Villa Muse) was actually harming things.”


Another of those who voted to back the project, Council Member Sheryl Cole, said, “I hate to see such a positive development locate outside of East Austin.”

Part of the Council’s 4-3 vote on March 6 was to instruct the city staff to open negotiations with the Villa Muse developers but with the staff-recommended restriction of keeping the project within the city’s ETJ. Villa Muse had requested that the city allow it to develop the movie studio-digital media complex on 1,900 acres released from the city’s ETJ, and had said that it likely could not go forward under any other scenario.


Wynn, who was among those opposing the ETJ release said that, in the end, Villa Muse was asking the city to give too much away on the project.


“A fundamental question that I asked at the time, and frankly I’ve continued to ask, is the basic question that if all this project needs to succeed is to not be in our ETJ, there are tens of thousands of acres of land just outside our jurisdiction that aren’t in our ETJ,” Wynn said. “There are hundreds of thousands of acres just outside our ETJ in close proximity and much of that is in our desired development zone. So if all they needed to be successful was to not be in our ETJ, that can easily be accomplished by proposing most any other site.” It seems likely that the answer to his question lies with those making the proposal.


Critics of the Council’s February vote said that the city might be giving away a “golden opportunity” to become a new Mecca for the film and digital media industry. However, Assistant City Manager Laura Huffman, who was the city’s lead negotiator for the project, said that the city is still open to projects of this type, under the right circumstances.


“It’s important to point out that the decision that the City Council made was that we wanted to negotiate with the developer inside the city’s ETJ, which is what the state designates as our planning area,” she said. “This is an area we call the desired development zone. This is an area where the city has made the single largest water-wastewater service extension in its history to promote development. So we’ve passed regulations that make this an area that is easier to develop in, understanding that this is Austin’s future.”


Wynn agreed, saying Austin is still working hard to develop its film industry.


“In my opinion, Austin as a city has done more from a policy standpoint to help the film industry here than any other city in the state,” he said. “We value film dramatically in this town. We recognize what a disproportionately important thing is to the creative class in Austin, the growing digital media opportunity that presents itself here.”


He went on to enumerate the ways the city is helping film production.


Austin, as you know, has a single point of contact – sort of a one-stop-shop – to come to town and get the different permits,” Wynn said. “We give them assistance on lane closures, use of right-of-ways, and the policing associated with filming. We offer city facilities free of charge.   We have the fabulously successful partnership with the Austin Film Society at the old Mueller Airport, where we have a long-term $1 a year lease on those hangars that has generated upwards of $100 million in local film production.”

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