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ARA facing tough road in development of 11th Street properties

Wednesday, August 20, 2008 by Kimberly Reeves

The Austin Revitalization Authority seems to be losing ground on the gains in trust it made during the negotiations of the newest tri-party agreement among the City of Austin, the Austin Revitalization Authority and the Urban Renewal Board.


This week, the Urban Renewal Board refused to support ARA’s request for a variance for increased density on Block 16, which is located one block east of Interstate 35 on East 11th Street. ARA has argued the project is not economically viable without additional units, a proposal that Robertson Hill residents opposed.


The neighborhood already has made concessions to ARA for additional density on the block, said Robertson Hill Neighborhood Association President Valerie Thatcher. Now ARA was back, asking for even more compromises, Thatcher said.


“In the original NCCD, we decided to keep the bulk of the density on the freeway, but they keep chipping away at the zoning. They want more density here and more height there, and it’s a never-ending chipping away of the zoning on the property,” Thatcher said. “We’re resident friendly and developer oriented as well, but you need to keep in mind we live there 24/7. “


In the short version of events, ARA asked for a floor-to-area ratio of 1.85 on the property.  Then, after some negotiations with the Organization of Central East Austin Neighborhoods – but before the plan made it back to the Urban Renewal Board – further concessions were made to the neighborhood. Those negotiations, however, were not complete on all points before Monday night’s meeting.


The board voted down the ARA request by a margin of 5-1, keeping the existing height and floor-to-area ratios on the property. Chair Kevin Cole was the lone vote against the motion, noting that the project might not be financially viable in its current configuration, and a motion to maintain the current project ratios.


“I have concerns that what the community is asking for is not feasible on any level, so I’m going to be voting against the motion,” Cole said. “By passing this motion, I worry that nothing is really going to happen on this property until sometime after October 2010, without ARA’s proposal moving forward.”


Commissioner Sean Garretson disagreed, saying that compromises could happen between the neighborhood and ARA in the time it will take for the project to move through Planning Commission and Council.


“There still would be time for those groups to come up with a proposal to those bodies that would meet the neighborhood’s issues, as well,” Garretson.


The group also declined to make changes to the Neighborhood Conservation Combining District document, also, by the same margin.


Asked after the vote how ARA was going to proceed, ARA Executive Director Byron Marshall said the project, as dictated by the community, would take “a whole lot more support” from Council. Or Council could agree with the variances.


Cole’s theme for the evening was urgency. More than once, he expressed his impatience with timelines on various projects. At one point, he asked Sandra Harkins when the charge for the Urban Renewal Board was set to end: 2018.


“We have a limited life,” Cole said. “Much of it has been wasted the last 10 years… This motion destroys anything getting done before October 2010 unless Council ignores our recommendation. Otherwise, we can keep on doing what we’re doing, which is meeting to meet.”


However, the frustration of other members was high.  Edward McGarrahan said he wanted to respect the process that was put in place. The neighborhood groups and business groups were in opposition to density in the original plan and continued to be in opposition to the high level of density on the property.


“Originally, we were looking at buildings maybe two stories or three stories at the most,” McGarrahan said. “Then they told us, ‘We can’t do it financially.’ So, we’re for development, and we decided to bite the bullet and go denser. Now they’re proposing to go even denser. For me to vote just to build… that that’s the only way somebody says they can do it… is not the wishes of the community.”


A trio of city staffers, led by Fred Evins, discussed the city’s upcoming RFP on Block 16. The document is expected to hit the street in October. URB will discuss the request for proposal document in executive session in September.


If the talk on Block 16 was tough, then the discussion of Block 17 was tougher. The Snell Building occupies the portion of the block fronting East 11th Street, and the back of the property was intended for market-rate live-work space.


The new tri-party agreement set a closing date of May 30 for financing Block 17. That date came and went and ARA did not find the financing, so the deal did not closed. ARA asked for another six months to put the financing together to close on the city-owned property.


When ARA’s July meeting went well past midnight, the discussion of the block was delayed for August. In a last-minute save, Marshall presented the board with a document indicating ARA finally had a financing partner on Block 17.  It was the first time the board – and city staff – had seen the financial commitment letter.


Marshall asked for another 60 days to close the deal. Commissioner Cristina De La Fuente-Valadez, for one, was inclined to deny the request and put the balance of the block on the street for a developer to propose a project.


City staff, led by Margaret Shaw, said a developer could be secured on the property in an 18 to 24 month timeframe. That was enough to convince De La Fuente-Valadez that it might be just as wise for the city to take on a private partner on the project.


“ARA has had ample opportunity to develop that portion of Block 17,” De La Fuente-Valadez said. “I hear timelines in terms of the RFP. I strongly believe that if we do take the RFP, we can probably guarantee something is going to be there after 18 months. I don’t think I’ve seen that demonstrated by ARA with some of their projects.”


McGarrahan and Sharon Baxter were both inclined to vote against an extension for ARA’s negotiations. McGarrahan said he was not interested in hearing “just another excuse,” but he was encouraged that ARA did have a financing partner.


“I have been eagerly awaiting ARA to present what they have had to present, and anticipating you would not have been further along, but I am pleasantly surprised that they have had some success, especially in such a short window,” Baxter said. “For that reason, and that reason only – to see some evidence of commitment and financial support – I’m open to allowing the 60 days to see where they go.”


During the discussion, another wrinkle also was brought forward. It appears that documents exist that tie the development of Blocks 16 and 17 together: a unified development agreement. This was the first the URB had heard of the arrangement, which had only come to light as city staff went through the process of putting together the paperwork to sell the balance of the block to ARA.


De La Fuente-Valadez and Vice Chair Ben Sifuentes voted for the motion to deny the 60-day extension. Garretson, McGarrahan, Cole and Baxter voted against the motion, but it was not a full victory for ARA.


Discussion began immediately to start the clock on ARA. The final motion was to create two possible paths for the URB. One would be approval of the closed deal between ARA and its financing partner. In the meantime, the city would begin developing an RFP on the block for a potential developer.


If ARA failed to satisfy its end of the deal, the city would be ready to immediately release an RFP for another developer to step forward on the property.

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