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County creates first PID, possibly setting up showdown with city of Austin

Wednesday, August 10, 2016 by Caleb Pritchard

City Council is now on the clock to determine whether it wants to be the spoiler for Travis County’s first-ever public improvement district.

The Commissioners Court voted on Tuesday to approve the creation of the WildHorse Ranch PID in far Northeast Austin. Because the project is within Austin’s city limits, Council now has 30 days during which it can unilaterally override the court’s decision.

The creation of the PID came after the court first resumed a discussion it had put off last week regarding the general procedures by which the county will create all future PIDs.

County staff recommended that each district be created after its mandatory public hearing closes but before the specific terms of the PID agreement between the county and the developer are reached. Staff reasoned that the initial act to create the PID would be considered an affirmation of the county’s interest before the developer embarked on the costly process of preparing for the final agreement. In addition, the county would be under no obligation to ultimately strike a deal with the developer.

The recommendation found little traction with Commissioner Margaret Gómez, who expressed her discomfort with the lack of firm requirements for affordable housing written into the county’s PID policy, which was drafted and approved in January.

“I think it’s just essential that we make sure we have affordable housing for our folks,” Gómez said. “When we pass a policy, I think all parties in Travis County ought to benefit from it.” Gómez said she would like to take more time to receive input from affordable housing advocates.

After a plea from Diana Ramirez, the county director of economic development and strategic investments, to withhold from tinkering with the PID policy until the court deals with the pair of PIDs currently in the public hearing phase, Commissioner Ron Davis motioned to accept the staff recommendation on the item. Commissioner Gerald Daugherty seconded the effort.

When Gómez again raised her concerns that the county’s approach to PIDs did not carry strong enough guarantees for affordable housing, Daugherty jumped in. “I’m uncomfortable where this is going,” he said.

Daugherty explained that he understood PIDs to be a device by which the county could encourage homebuilding in areas that would otherwise be unattractive to developers. He also chafed at the amorphous definition of “affordable housing.”

“The best thing you can do for affordability in this community is to allow more homes to be put on the ground,” Daugherty declared.

Gómez conceded that affordable housing requirements need not be the “linchpin” of every PID, but she noted that she simply wanted the broader language to be “firmed up.”

Commissioner Brigid Shea also voiced her uneasiness with the proposal to create PIDs before learning the specifics of each developer’s proposal. She worried that once a PID is created, the forward momentum might be too much to resist.

Shea ultimately voted against the recommendation, while Gómez abstained. County Judge Sarah Eckhardt joined Davis and Daugherty in passing the motion.

With that item out of the way, the court proceeded to the question of the creation of the WildHorse Ranch PID itself. The project’s developer, Pete Dwyer, launched into an immediate pitch about the benefits the project could provide to the county. He said that the $65 million bond issue he’s expecting from the deal will create $1.3 billion worth of “high-quality” property value in Eastern Travis County. He also promised that the project will include 1.3 million square feet of commercial space that will provide 5,000 jobs.

Dwyer estimated that apartment dwellers will pay $720 per year in PID assessments, while the average homeowner will see an $800 annual bill. He added that homeowners’ association fees will likely be between $400 to $500 each year. He also promised a “substantial contribution” of affordable housing stock. “It will be more than 35 units,” Dwyer pledged.

“I appreciate that you are developing to the east,” Shea replied. “But it makes me uncomfortable for us to be asked to approve the PID on a promise like, ‘Trust me: You’re going to like the amount of affordable housing.’”

Despite Shea’s trepidation, the court eventually voted to create the WildHorse Ranch PID on a 3-0-2 vote, with both Shea and Gómez abstaining.

According to the preliminary term sheet upon which the larger PID agreement will be based, WildHorse Ranch will deliver 4,300 housing units. Included in that mix will be single-family detached homes at or below twice the market rate, and multifamily units at market rate or below. The PID will also likely provide other benefits such as parks, trails and the construction of the WildHorse Connector, which will run from State Highway 130 to FM 973. According to an agreement Dwyer signed off on in February, all workers building PID infrastructure will benefit from the Workers Defense Project’s Better Builder Standards.

Even as the court was in the thick of its PID business on Tuesday morning, city staff was giving a work session briefing to Council about WildHorse Ranch. The discussion, which lasted over an hour, ended without any indication of whether a majority of members were inclined to put a stick in the County’s spokes.

“Were this to pass at Travis County, we’re going to have to plan for a fuller discussion here,” said Mayor Pro Tem Kathie Tovo.

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