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Council votes to oppose legislation for Carma Development

Friday, May 1, 2009 by Austin Monitor

City Council on Thursday unanimously voted to follow staff’s recommendation to oppose legislation, currently in committee, that would facilitate creation of five special development districts, akin to Municipal Utility Districts, in Southeastern Travis County. Council members said they were open to future collaboration with the Carma development team and expressed hope that the development would eventually get built—but only if the terms of the agreement gave the city more control over land use and financial commitments.

 

The 2,300-acre site west of the Texas 130 toll road, and east of I-35 between McKinney Falls Parkway and US 183 South, would have roughly 16,000 houses, townhouses and condominiums, plus some 4.5 million square feet of office and retail space, according to the developer.

 

Sen. Jeff Wentworth (R-San Antonio) and Rep. Trey Martinez Fisher (D-San Antonio) have bills in committee that would create a special tax zone allowing Carma to issue its own bonds to pay for infrastructure, rather than creating a Public Improvement District in which the City of Austin would issue the bonds and have some degree of oversight. Representatives for the developers, Shaun Cranston and Scott Rogers, said the legislation (SB 2545-2549) would expire if the city and developers did not reach an agreement by May 1, 2010.

 

Council Member Laura Morrison said, “It’s my sense that there are some inherent risks in the structure itself, both in terms of the district having control as well as the fact that because we didn’t understand it thoroughly—that in fact the legislature would be the ones to have control—all of which makes me uncomfortable.” She expressed a desire to work with the developer to have a general framework, “to see if we can expand the tools that folks like Carma would then be able to use.”

 

“I’ve heard other colleagues say this is the kind of development that we actually worked really hard to help foster last legislative session,” said Mayor Pro Tem Brewster McCracken. Assistant City Attorney Sharon Smith told council there are three differences between these districts and SH 130 legislation that failed to make it through the legislature in 2007. The previously proposed legislation would have allowed the city to create the districts after the legislation was adopted. The City Council would also have served as the board, which would govern the proposed development zones along the highway and the types of land use in those districts. The city would have issued the bonds in that scenario as well. Smith said that the ultimate goals of the two plans were similar but just used different tools to get there.

 

Smith said in consultations with Carma it was clear that the prior strategy “was not something in their development paradigm that they were willing to accept at this time.”

 

Council Member Sheryl Cole said,” This is a very complicated deal… and all these things are very concerning because of Austin’s land use history, especially in our ETJ dealing with MUDs and things like that.” She said she was concerned about the district having sovereign immunity and “we were contemplating a contract that would have key terms in it and that particular provision hadn’t been worked out.” While she voted to oppose the legislation, she said “if we are not able to do so this session, which I am doubtful that we will, hopefully we will be able to walk hand in hand in agreement next session.”

 

In the meantime, Cole expressed hope that staff would be able to work up a generic agreement similar to the SH 130 bill. “It’s very important to me that we get the area in SH 130 actually developed. We have a major problem with the infrastructure costs and staff has to be able to address that.”

 

One of Carma’s attorneys, Nikelle Meade of Brown McCarroll, told In Fact Daily she was uncertain whether her client would want to continue discussions with the city. She said, “There were some really good reasons” why developers opposed the SH 130 legislation that would have given the city the kind of control the City Council wants.

 

“One of the big reasons the legislation failed was that very issue, a control issue,” she said. “So instead of giving the city control, we’ve been offering ways to get to the bottom of why that control was desired. It’s not like we couldn’t change our minds, but we feel really strongly that the people who are having to issue the bonds and be taxed should control the board of directors. We don’t think it should be the city.”

 

She estimated the project, known as Easton, would require $600 million in bonds over the next 20 years. She said the biggest infrastructure costs would be for roads and water and wastewater lines.

 

In response to a question from City Manager Marc Ott as to how the staff should proceed, Council Member Mike Martinez added an amendment to the motion asking the manager to “bring an item from council at the next council meeting so that we can clearly understand how we move forward… so that everyone’s issues and desires are respected.”

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