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Council fast-tracks codification of Downtown Density Bonus plan

Monday, April 1, 2013 by Michael Kanin

City Council members instructed city staff Thursday to proceed with the codification of a fast-tracked version of the Downtown Density Bonus Program. The move came over the vocal objections of Mayor Lee Leffingwell and Council Member Chris Riley, who worried that the idea would compromise a fuller version of the program.


Council Member Mike Martinez joined Leffingwell and Riley in voting against the measure. Mayor Pro Tem Sheryl Cole voted with Council Members Bill Spelman, Laura Morrison, and Kathie Tovo for it. Tovo and Morrison brought it forward.


At issue is how the city calculates the community benefits it can extract from developers looking to build denser, generally taller projects in the downtown region. Staff and Council routinely offer such projects the right to increase in size in exchange for such amenities as larger contributions to affordable housing and participation in the city’s Great Streets program.


However, developers currently hold an alternate route to increased project size: CBD-CURE zoning. Tovo and Morrison argue that CURE allows developers ways around fuller participation in the benefits for density exchange. “Allowing CURE to continue as an option has cost this community millions in affordable housing dollars,” Tovo said Thursday.


Leffingwell disputed that math. He called Tovo’s statement “an assumption,” and he raised the idea – sometimes championed by the development community – that the density bonus program could also be a density killer. “One of (the) choices would be not to exceed the limitations…and that would be a bad result for us, it would be a bad result for Austin because we wouldn’t be achieving the density we were trying to achieve.” 


The Downtown Density Bonus Program is part of the Downtown Plan. Council approved that effort in December 2011. With full implementation, the bonus program would update the economic information that city staff use to calculate the benefit-for-project-size exchange. It would also formally codify that exchange.


Though the city approved an Interim Downtown Density plan in 2008, no develop has yet used it. CURE opponents argue that projects select it over the interim density plan because it offers a more developer-friendly amenity calculation.


The CURE zoning currently in place is considered by some to be an ad hoc process. CURE, they argue, results in something of an informal exchange of community benefits for project density.


Leffingwell argues that this trends dangerously close to what is broadly known as “contract zoning,” an illegal quid pro quo exchange of benefits for increased project area. Tovo, Morrison, and Spelman took pains during the recent Hotel ZaZa zoning case – where the issue came up – to illustrate that they were not engaged in pressing for a tit for tat exchange when they voted against the project because of a lack of affordable housing dollars. (See In Fact Daily, March 8.)  


The ZaZa project eventually received increased density on a 4-3 vote. The next week, Tovo and Morrison brought forward their resolution. Though Council members approved the Downtown Plan it hasn’t been codified.


The Morrison and Tovo item latched on to developer calls for a predictable process via the codification of the methodical programmatic calculations of the Downtown Density Bonus Program. Their plan, modified with the help of city Planning and Development Urban Design division manager Jim Robertson, would fast track the bonus program.


Robertson said his office could be ready with the item in as little as two months. However, he admitted that the June 6 deadline in the resolution could be too aggressive, considering the fact that staff will lose control of the process once it hits the Planning Commission’s Codes and Ordinances subcommittee.


It is part of a parallel process that would codify the program, then update the economic data associated with it sometime later. Riley expressed concern about that at Tuesday’s work session.


Downtown Austin Alliance Executive Director Charlie Betts echoed those thoughts Thursday.


“(This) would not leave sufficient time to do the economic modeling,” he said. “We just think this is a big mistake. What it would do would simply be to use the 2009 economic consultant recommendations…we all know that since 2009, costs have gone up considerably. We think it’s in everybody’s interests to do the economic modeling. Let’s get this right. If we hit the sweet spot, it might work and we might get the kind of density that we want in our downtown and also the affordable housing and other community benefits. We might be able to have our cake and eat it too.”


The measure passed over those objections – and after it became clear that the economic modeling may not be too far behind initial codification. It should all be back for a formal codification vote sometime this summer.

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