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Council raises questions about economics of new downtown plan

Thursday, November 18, 2010 by Michael Kanin

City staff and consultants on Wednesday unveiled a final draft of their development plan for downtown Austin. In it, they call for zoning changes, infrastructure and transportation improvements, and a corporation that would focus on executing projects in the downtown area.

 

Officials suggested as much as $350 million in “priority investments” for downtown Austin. The answer to the question of just how the city will finance such an effort, however, remains uncertain.

 

A figure for the sort of return Austin residents might get on that investment also remains fuzzy. Still the plan will move forward, with staff indicating that it should be ready for a Council vote this coming May. Its next stop will be a town hall meeting that will be scheduled for sometime in mid-December.

 

City staff and consultants with McCann Adams Studios and HR&A Advisors brought the downtown plan to a special called meeting of the City Council on Wednesday There, they detailed their vision for the next 10 years in downtown Austin development.

 

Under the plan, there would be a new emphasis on pedestrian activity in certain areas, stricter regulation of cocktail lounge zoning, and some use of the much-ballyhooed form based code zoning method.

 

Former city Urban Design Officer Jana McCann dove into the costs of the plan. Among these are between $18 and $25 million for parking and transportation improvements — a figure that does not include the cost of urban rail, which was also recommended — and as much as $146 million in utility and infrastructure improvements.

 

All told, the project could cost up to $350 million over 10 years. McCann broke that spending down into eight categories: Historic preservation, affordable housing, creative culture, parks, streetscapes, transportation, utility/infrastructure, and leadership/implementation. Infrastructure (at as much as $146 million), parks (which could amount to $75.3 million), and affordable housing (at as much as $46.9 million) were the top three expenditures.

 

As the city prepares to inherit what will almost certainly be a host of funding problems thanks to cuts at the state level, questions of funding were bound to surface. “Maybe I missed it,” said Council Member Laura Morrison, “but did you talk about where the $250 to $350 million dollars is going to come from?”

 

McCann and Jim Robertson, who manages the city’s Urban Design Division, told Morrison that they hoped to develop an answer to the money problem sometime down the line. Morrison continued to push them.

 

“What I might find problematic is embracing that this is the way we’re going to go forward without knowing how we’re going to pay for it,” Morrison said.

 

City Manager Marc Ott then cut off debate. “We don’t have that answer for you here today; that is the short answer,” he said. “It is the intent, when we do come back sometime in the early part of next year, at the very least to offer a number of strategies for how that might occur and perhaps some recommendations as well.”

 

Earlier, Council Member Randi Shade tried to pin down staff and its consultants on the other end of the fiscal equation. “I’d really like to hear a little bit more about why the suburban people want to invest money in downtown and why does it make sense for them to do that,” she said.

 

Adams said that he didn’t have the answer for that either. “We’ve been trying for three years to get the number you’re looking for,” he told Shade. “It’s a very difficult number to pin down.”

 

HR&A Principal Jamie Springer pointed out that some measure of success could be seen in the billions of dollars spent on private development in downtown Austin over the past decade. “I think what we can say is that you’ve already seen, in this last real estate cycle … a very substantial investment of private money that’s been leveraged by a much smaller investment of public infrastructure money.”

 

According to numbers furnished by McCann, $600 million in public funds have been invested in downtown over the past 10 years. During the same period, she said, private investment has come in somewhere between $1.6 and $2 billion.

 

Springer gave the Council details on the proposed development corporation. “To undertake (the key functions of the plan), what we’ve recommended … is that you create an economic development corporation whose focus is implementing certain components of the downtown Austin plan,” he said.

 

“What you need is a staff that is associated with the city but is not directly attached to the city to help you incubate private real estate development,” he later added.

 

According to the plan document, the corporation — called the Central City Economic Development Corporation — “could allow the City to be proactive about developing … (projects on private land that generate significant public benefits).”

 

Springer pointed to a park project in Cincinnati, the new baseball stadium and its surrounding district in Washington, D.C., and a dormitory effort in New Brunswick, N.J., as projects handled by similar entities.

 

After the hearing, Council Member Chris Riley told In Fact Daily that he hoped the downtown plan would become a concrete reality. “My hope is that this would not just sit on a shelf, that this would be an active, ongoing process that would crystallize a lot of prior planning efforts.”

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