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Council approves Grayco’s South Shore PUD on final reading

Friday, December 18, 2009 by Kimberly Reeves

Grayco’s South Shore Planned Unit Development was approved on final reading Thursday on a 5-2 Council vote, with the only dust-up being a disagreement over how the affordable housing money should be sliced amongst the various interested parties.

The South Shore PUD – a 20-acre mixed-use project proposed at East Riverside and Lakeshore Boulevard – sits within the East Riverside/Oltorf Combining District neighborhood plan, where homeowners are known for being rather hostile toward additional density in their neighborhood, future commuter rail line or not. Developers also plan to include a water quality pond, a police substation, space for non-profits and day cares, 1,200 apartments and some 30,000 square feet for commercial use, among other features.

So it’s not surprising to see the benefits of one community that could be squeezed out of the project – affordable home ownership in the EROC neighborhood –emerge as the crux of the issue for Council negotiations over the PUD. That support for EROC became a bargaining chip with neighborhood leaders to make an inevitable lakefront development somewhat more palatable to local residents.

The total Grayco Town Lake Investments could or should put on the table for affordable housing, according to attorney Steve Drenner, was $3.1 million. Two affordable housing options to carve up that $3.1 million quickly emerged during Council negotiations this week.

The first one, offered by Council Member Sheryl Cole, was a compromise of thirds, with one-third going to affordable rental units on-site, a third going to assistance for low-income first time homebuyers in EROC and a third going to city-wide efforts focused on low income elderly residents.

Cole said, “The EROC neighborhood has been very vocal in this discussion and I totally respect that. But I also recognize that there are many areas in this city that need affordable housing and that the lake is a community benefit. And it is a benefit not just for the neighborhood adjacent to the lake but for the entire city  …Many neighborhoods would welcome this type of development and a chance to have this type of contribution to affordable housing. I also recognize that it is a balancing act between the neighborhoods on the lake and the entire city. “


In response to Cole’s proposal, Council Member Chris Riley offered a motion of a 50-50 alternative, which sent one-half of the money to buy down the cost of some units in the project—to allow rents affordable to those making 60 percent of median family income—and the other half in support of lower-income homebuyers in EROC.

“How do we take some of the value from the additional density near that transit stop and ensure that the value translates into some amount of affordable housing, so that folks will have affordable homes near a transit line?” Riley asked his colleagues.

Council Member Bill Spelman asked for a tally of benefits, which was telling. The benefits of $1 million spent on site would be only 13 units. The mix, which was intended to mirror the mix on the property, would be 8 one-bedroom units and 5 two-bedroom units.

The second million dollars could provide assistance for about the same number of homebuyers in the neighborhood.

And, when it came to the support of the most vulnerable elderly residents, a $1 million donation was expected to provide about 29 affordable rental units, hardly a huge windfall when to comes to putting a dent in the city’s affordable housing crisis.

The difference in the two proposals was a focus on where the money would go. Riley was intent on money on site and in EROC. But the difference in proposals were still negligible, possibly the difference of an additional five homeowners assisted in the neighborhood with an affordable home, up from 25 to 30.

Cole said the reach needed to be broader, given the needs of the city. The benefits of the Lady Bird Lake shore belonged to everyone, and the price Grayco paid needed to be shared among all the neighborhoods of the city, be it EROC or Dove Springs or St. John’s.

The phasing of the affordable housing, however, means that the community benefits could be years into the future. Most of the last-minute negotiations on community benefits – be it the on-site police substation or affordable housing –would be triggered well into the project’s construction. According to newly drafted language, many would be triggered and provided only when 400 units were on the ground, which could be years into the future.

Also, Assistant City Attorney Tom Nuckols did note language was added to the ordinance that was intended to provide that these benefits were still somewhat optional. According to language in the agreement, Grayco could avoid providing any community benefits – relocation fees, affordable housing units, and a police substation – simply by going forward with current entitlements. Of course, that would mean giving up the PUD. So, Nuckols said, the current zoning remains in place in addition to the PUD.

Riley’s proposal, however, failed to pass on a 3-3-1 vote. Mayor Pro Tem Mike Martinez and Council Member Laura Morrison joined Riley in his amendment, although Morrison admitted during the vote she intended to vote against the PUD. Still, Morrison voted for the Riley proposal, saying his efforts were consistent with the neighborhood plan, which was her major reason for voting against the South Shore PUD.

Mayor Lee Leffingwell abstained from the vote, stating he intended to vote against the PUD and, therefore, thought it was inappropriate to vote on the affordable housing question. Leffingwell and Morrison have consistently opposed the project.

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