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City lease with nonprofit ARC of Capital Area is deemed illegal

Monday, November 16, 2009 by Laurel Chesky

When representatives of an Austin non-profit organization approached their landlord to renew their lease, they got a big shock. According to their landlord’s lawyers, the lease is illegal.


The ARC of the Capital Area, a nonprofit that provides services for developmentally disabled residents, has rented its building at 2818 San Gabriel St. from the City of Austin since 1966 on a 50-year lease. Gerald Murphy, the ARC’s director of agency services, told the Austin City Council’s Land Use and Transportation Subcommittee at a March meeting that the ARC wanted to renew the lease, which expires on Dec. 31, 2015.


However, while researching the original lease agreement, the city Law Department discovered a glitch: The lease apparently violates city code.


The ARC building sits on designated city park land. According to an Oct. 29 memo from Assistant City Manager Bert Lumbreras, “The Parks and Recreation Department (PARD) worked with the Law Department regarding the lease renewal and found the following: the only way to legally lease parkland is for the voters to approve it by referendum or for the (Texas) Legislature to pass a special statute. At this time, we can find no record of either occurring for the current lease.”


Should the ARC have to vacate, some city officials already has some ideas about how the space could be used. “PARD’s present office space is limited and we can use the ARC building to relocate personnel that are currently housed in trailers,” Lumbreras stated in his memo. “PARD has already invested funding to renovate the building next door to the ARC.”


However, for now, the city is honoring the original lease, said PARD director Sara Hensley, and the ARC is welcome to stay in the building until 2015. “We’re not kicking them out,” she said.


As for 2016 forward, “We are waiting to hear back from them and talk to them about some options and about what they want to do, what their long-term goals are,” she said. “We want to help them in one way or another.”


Hensley said that the ARC may choose to construct its own building.


Susan Eason, the executive director of ARC, said in an email that the agency has a Nov. 23 meeting scheduled with the city and that she had no comment about the lease situation until after the meeting.

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