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Council members ponder high cost of Highland area renovations

Thursday, June 26, 2014 by Elizabeth Pagano

There was widespread support at Tuesday’s work session for the renovations already underway at Highland Mall. But the hefty price tag that will most likely accompany that redevelopment had some City Council members concerned that the city could be overextending itself in the face of so many opportunities.


The first phase of the project – which created Austin Community College’s Highland Campus – will be up and running in just a few months. The next phases of the campus redevelopment will include the construction of apartments and retail space, as well as expanding the campus itself. Today, Council will consider a resolution that will look into financing infrastructure for the next phase of the project.


Council Member Chris Riley explained that the city is in the process of working out a partnership with ACC over the redevelopment of Highland Mall. The resolution supports the partnership and explores how to finance the infrastructure for the project.


Among the possibilities for financing is a Tax Increment Financing district, said Riley. A TIF allows the city to capture additional value created by development, and assign that money to projects.


“If we do want to move forward with a TIF to help support infrastructure at the Highland Mall site, it would be very helpful to make progress on that this year. My understanding is that we expect dirt to start turning on the Highland Mall site next year,” said Riley. “I think it’s very important that we have a Council discussion about that to make sure we’re all on board with the expectation that we would like to move forward with exploring financing options.”


Council Member Mike Martinez said he was supportive of the Highland Mall project, but wondered how city management would prioritize the creation of a TIF. He pointed out that Council had already adopted a Homestead Preservation District and Project Connect funding that uses similar funding in the same area.


“I just want to make sure we understand the ramifications if we move forward,” said Martinez.


“When an item like this comes up… Does it go to the top of the pile? The bottom of the pile? How do you figure out which one we implement first? Because we know that, per financial policies, we have a cap – a hard cap – on how much we can TIF throughout the city,” said Martinez.


Deputy Chief Financial Officer Greg Canally explained that the city had been working with ACC and developers RedLeaf LLC to look for public investments in infrastructure. At this point, the city was looking at all of the possibilities for that funding. He said that they would address any TIF funding in context. He said that if that was ultimately presented as an option, they would also bring forward the other “five or six or seven potential ideas for value capture” that were either in the works or under discussion.


Canally stressed that, at this time, the city was just trying to establish what the potential value of the project would be for the city. After that, they would determine financing.


“Just to be absolutely clear, this resolution doesn’t commit the city to spend any money whatsoever,” said Mayor Lee Leffingwell. “I think the possibilities are great, and we would be remiss if we didn’t explore opportunities here. Because we have the nexus of a huge student population center along with transit opportunities that kind of converge at that point… I don’t think we should pass up ways to do it.”


Council Member Laura Morrison drew attention to a portion of the resolution that seemed to speed up the implementation of form-based code for the project. The city launched a form-based code initiative for Airport Boulevard in 2009, but the regulating plan has not moved as swiftly as expected. Unlike the zoning currently in place in Austin, form-based code focuses on the physical form of buildings to organize the code rather than use.


“This is a little bit reversed. This is actually going to be writing some form-based code that might get integrated into CodeNEXT. I’m just curious about how that works,” said Morrison. “We don’t want Highland Mall to be the tail that wags the dog.”


Riley agreed that it would not make sense to have a “one-off form-based code” to address that one area. He said that was why Opticos, the firm heading up the code rewrite process at this point, is using the prepared draft for the corridor “to ensure that whatever code we have in place for the corridor is fully consistent and compliant with the code that they are preparing for the rest of the city.”


Planning and Development Review’s Jorge Rousselin said that his department was working with Opticos to ensure that the site was not subject to two sets of regulations. He said that the Highland Mall project was already well underway and a private developer was interested in the surrounding area.


“We’ve been working really hard with that developer to initiate the process by which they can have their entitlements in place through the form-based code,” said Rousselin, who explained that they were working with Opticos to ensure that these changes would fit into the larger framework of the code-rewrite process, which is expected to take about two years to complete.


Completion of the Airport Boulevard code will cost more than the current contract with Opticos, and Council will have to approve that extra funding. Morrison noted that the city already had a “$500,000 wish list” for Opticos, for expanded services surrounding the CodeNEXT process.

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