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Condo developers withdraw zoning application for onsite bar

Monday, January 11, 2010 by Kimberly Reeves

Faced with likely opposition from the Zoning and Platting Commission, the developers of an unusual hotel-turned-condo-project in North Austin threw up their hands and gave up on a zoning change in the middle of last week’s hearing.

 

The property in question, part of which is now known as The Allandale, is located on Northcross Drive behind Northcross Mall. Since 1986, the property has operated as an extended-stay hotel under the Woodfin brand. Two years ago, developers came to ZAP and Council, suggesting a phased conversion of the hotel into 180 one- and two-bedroom condominium units. So far, about four-dozen condos have been sold.

 

Last week, B-H Enterprises, represented by developer Tom Blackwell and agent Shaw Hamilton, came back to ZAP to request that the zoning change be reversed, on a small footprint within the hotel, so that a 1,200-square-foot area that has served as a place for morning breakfast buffets and evening social hours be converted back to CS-1 zoning so that the hotel could sell beer and wine to its customers.

 

Two issues emerged during the hearing: whether private condo owners had any ownership rights in the conversion of the space, and whether those same condo owners could rely on marketing materials that promised a conversion into a residential property that included no on-site bar.

 

Attorney Casey Bell, who represented almost two-dozen condo owners, said the owner described the conversion as “spot zoning” on the property, even after agreeing, two years ago, to terminate a restrictive covenant.

 

“So what they’re doing is carving a piece out of this larger project and trying just change that piece back to the CS-1 zoning to start serving alcohol and run a bar right in the shadow of my clients’ residences,” Bell said. “That is in direct contradiction to the representation they made to my clients when they went ahead and purchased these condo units.”

 

Attorney Tom Daniel, representing a condo owner who could not make it to the meeting, noted that the “back zoning” gave the developers two bites at the profit apple. “My client would not have purchased a condo if there had been an established bar in the middle of it,” Daniel said during his remarks to ZAP.

 

City staff actually supported the zoning change. Planner Clark Patterson noted that the liquor sales would be in keeping with what had been established on the property for two decades prior to the conversion efforts.

 

Blackwell said the zoning change was intended to keep the project financially viable – and even affordable – in a time when other condo projects were going under. It was the profits from the hotel, Blackwell said, that subsidized the more affordable prices on The Allandale’s condo units.

 

Ten of the units were sold to the local United Cerebral Palsy Association, with the assistance of $1.4 million in city and federal assistance. So if Blackwell and Hamilton didn’t look like the bad guys going into the deal, their case definitely was not enhanced when Sarah Watkins rolled her wheelchair up to the microphone. Watkins, who has cerebral palsy, bought her condo unit from United Cerebral Palsy in 2008. She wouldn’t have, she said, if it was going to include a bar.

 

“I believe this request for rezoning goes against everything that we were told when we bought our units,” Watkins said. “If someone at the hotel wants beer or wine, they could just easily go a block up the street and buy beer or wine. The parking lot at the hotel is often crowded, so I don’t really buy that this will keep the hotel or the condo project itself more viable financially.”

 

When the time came for the applicant’s rebuttal – about an hour into the hearing – a grim-faced Blackwell told the ZAP he withdrew the application for the zoning change. During his rebuttal, Blackwell emphasized the ownership of amenities was never in question on the property and clear to each condo owner who bought a unit.  And, in the second year of an HOA with an annual budget, there is no mystery whatsoever to condo owners as to how money was spent, Blackwell said.

 

Blackwell’s choice to pull his application didn’t stop Chair Betty Baker from offering Blackwell some advice on his decision to attempt to rezone the property.

 

“I would point out to you, as well as the people here, we do not zone for economics,” Baker said. “We’re all in an economic mess. To zone for economics would really make this a tilt-a-whirl. We look at the appropriateness of the land use, and we make our decisions and determinations based on that, not on economics.”

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