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Council members and staff debate PUD ordinance requirements

Thursday, September 24, 2009 by Austin Monitor

There was a lot of buzzing in City Hall Wednesday about the meaning of the affordability provisions in the 2008 Planned Unit Development Ordinance. There could be a lot more conversation today as the City Council considers whether to approve a request for PUD zoning on the south shore of Lady Bird Lake along Riverside Drive.


Representatives of Grayco Town Lake Investments, developer of the proposed South Shore District PUD, have gone out of their way to prove that their client, even though not legally required to do so, is meeting the requirements of the city’s 2008 ordinance governing Planned Unit Developments.


Steve Drenner and John Donisi of the Drenner Golden Stuart Wolff law firm represent Grayco. Among the community benefits they have offered are a wet pond to drain not only the runoff from the site but also an additional 110 acres, contributions for improved traffic flow, space for a fire/police/EMS substation, pedestrian and bike amenities and contributions to the park system.


“We’ve been focusing on affordability in particular, because it has proved to be the most nettlesome of issues,” said Council Member Chris Riley.


As questions arise, Riley said, it is important to get the answers because, “next time a PUD comes along what will we have learned about the expectations of the PUD ordinance? Apart from just the scale of the project, there’s the question of what exactly does the ordinance require of a project—and it is important for us to understand what we are going to be asking of PUDs going forward.”


Grayco has also offered $3.1 million through the fee-in-lieu of onsite affordability approach. Mayor Pro Tem Mike Martinez, who spearheaded the rewrite of the PUD ordinance, said he believes that amount “meets not only the spirit but the intent of the ordinance.”


According to a Sept. 18 memo in response to questions from Council Member Bill Spelman, staff wrote, “Upon consultation with Margaret Shaw, Director of the Neighborhood Housing and Community Development Department, Planning and Development Review staff has calculated the requirement for the Affordable Housing Fee-In-Lieu calculation to be $3,148,920. If the Council requires the applicant to provide the fee-in-lieu as part of the approval of the South Shore PUD, the above amount should be provided for the affordable housing per the applicant’s agreement to comply with the requirement of ordinance 20080618-098 Planned Unit Developments.” (Sept 18 memo)


However, on Wednesday, Shaw sent another memo “to clarify requirements and options for providing affordable housing” in the South Shore PUD. Suddenly, it seems, staff’s reading of the ordinance changed. Shaw wrote, “Staff’s reading of the ordinance, however, is that the in lieu fee is calculated using the total climate controlled square footage within the PUD, not just the bonus square footage. The fee then rises to $7.8 million (1,297,00 sq. ft. x $6). This amount is not economically feasible for the applicant, so Drenner Golden reports they are discussing with an affordable housing consultant how to comply through other means.” (Sept 23 memo)


In Fact Daily asked Mayor Pro Tem Martinez whether the writers of the ordinance intended such an interpretation. “My intention during the rewrite of the PUD ordinance was not to contemplate a formula that calculated total habitable space. It doesn’t make sense. It actually turns a project on Riverside into one being more expensive than a project in the downtown area. So, if staff believes that is what the ordinance says, then we will amend it, because that certainly was not the intention,” he said.


“Those units that exist there today—they’re going away one way or the other. When you calculate a fee in lieu of onsite affordability, it’s based on the additional density that’s being sought, not on existing density that could be built today—and we would get nothing for affordability because they don’t need a zoning change. So while there may be some confusion, it’s not confusing to me and I was clearly a part of the PUD rewrite,” Martinez added.


Riley said he was surprised to learn that the PUD ordinance had different requirements for PUDs outside downtown. “To me, the idea that you would have vastly greater requirements for affordable housing outside downtown than downtown—I want to make sure that’s what the ordinance really says. That had not been brought to my attention before. I’m not sure people understood that, so it will be very helpful now to get a better understanding of the ordinance and what the problems are.”

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