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Council OKs WildHorse Ranch PID

Tuesday, September 6, 2016 by Jack Craver

A major mixed-use development planned in eastern Travis County cleared an important hurdle Thursday, when City Council voted 8-2 not to object to the first-ever public improvement district created by the Travis County Commissioners Court.

Key to approval of the resolution authorizing the WildHorse Ranch PID was a clause inserted by Mayor Steve Adler that states that the city will withhold funding requested by the developer and the county for a new road if the project does not ultimately include certain “community benefits,” such as affordable housing.

The original resolution recommended by city staff would have committed the city to the deal – under which the city will spend an estimated $5 million to $7 million over the next 10 years to fund one-third of a connector road that is critical to the project – without such conditions.

The Travis County Commissioners Court approved the creation of the PID last month, but because it will be located entirely within Austin’s city limits, Council was required to either approve or disapprove of the PID within 30 days.

Under the PID, the developer will issue $65 million in bonds to finance much of the infrastructure necessary to serve the new homes and businesses. Future residents will pay an annual fee, in addition to typical property taxes, to pay off the bonds.

The details for the final project are far from finalized. Developer Pete Dwyer has suggested that he is open to including affordable housing in the final product. However, he told Council members at a Tuesday meeting that officials from the Travis County Housing Finance Corporation had told him that the site was not an ideal location for affordable units because the surrounding area already had a large amount of low-income housing.

Council Member Ora Houston, in whose east-side district the development will be located, reiterated her skepticism about the project and its potential to be accessible to people with lower incomes. She pointed to the $700 or more in PID fees residents will have to pay and argued that the city would have “no control” over the direction of the development once it approved the resolution.

Adler pushed back on her reasoning, saying that his resolution was aimed specifically at guaranteeing the city leverage to get affordable housing included in the final project.

“The whole purpose was to put us back in control,” he said.

David King, an officer with the Austin Neighborhoods Council and a regular speaker at Council meetings, warned that the money Council can withhold from the development might not be enough to persuade the developer to do what the city wants.

“What’s to stop the developer from saying, ‘I don’t want your money, city,’” he said. “And then we have no influence at all.”

It’s hard to know whether the $5 million to $7 million in city funds would make or break the project. When the PID was originally proposed, the city was not going to contribute funds toward the connector road; the developer was to pick up two-thirds and the county one-third of the cost.

The deal sounded good to affordable housing advocate Stuart Hersh, who noted that he had originally signed up to speak as “neutral” on the issue but was persuaded to support it by the mayor’s changes to the resolution.

Mayor Pro Tem Kathie Tovo joined Houston in opposing the resolution. On Tuesday, Tovo had suggested that she was unconvinced that the proposed project met the criteria of “superiority” that is expected of PIDs.

Although city staff recommended that Council approve the WildHorse PID, it separately recommended that the city not approve any more PIDs until it can develop a new policy on the unique financing mechanism. A presentation given by staff on the subject last month suggested Council create a policy that is “consistent, fair and transparent.”

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