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Planning Commission approves Plaza Saltillo project, affordability level disputed

Thursday, January 12, 2017 by Joseph Caterine

After what Chair Stephen Olivier called “officially our longest case ever,” the Planning Commission approved three rezoning items associated with the six tracts of the Plaza Saltillo project at its Jan. 10 meeting.

The properties, owned by the Capital Metropolitan Transportation Authority, span 11 acres along East Fifth Street and the rail line. In 2013, Capital Metro posted a Request for Proposals for redevelopment of the properties and selected Endeavor Real Estate Group in 2014 to act as developer for the project.

Endeavor is seeking Central Urban Redevelopment zoning for the mixed-use development, which would extend the 70-foot height restriction permitted through participation in the Transit Oriented District’s density bonus program to an unlimited height restriction. If constructed as planned, a 125-foot tower will be built on the eastern portion of the first tract.

Although the height restriction was the main subject of the request, the point of contention during the public hearing and deliberation was the affordable housing component of the project. Endeavor has proposed to pay a $660,000 fee-in-lieu through the density bonus program and to have 141 units on-site. Forty-one will be “floating” units at 50 percent median family income within the multifamily development and 100 units will be in their own building on tract 6: 10 at 30 percent MFI, 40 at 50 percent MFI and 50 at 60 percent MFI. Without the fee-in-lieu, the developer would have to build 40 additional units on-site.

Sandra Harkins with Neighborhood Housing and Community Development said at the meeting that her department supported the proposal in light of the fact that most large, majority commercial projects participating in the density bonus program will only pay the fee-in-lieu. “We thought that having both the fee-in-lieu and residential units on-site was a win-win,” she said.

In response, Commissioner Nuria Zaragoza clarified that according to the Plaza Saltillo Regulating Plan, a developer participating in the density bonus program must demonstrate a compelling reason why including all affordable units on-site would not be economically feasible. “It’s what the TOD asks for, not what the developer is giving,” she said.

Harkins replied that the department would rather have 141 affordable units than none, if the project were not to go through.

Case manager Heather Chaffin explained that the CURE zoning, in addition to changing the height restrictions, was also being used to modify the percentage MFI requirements for the on-site housing.

Commissioner Tom Nuckols questioned why the CURE zoning could not be used to enforce more units on site. “If CURE is going to be the tool to tweak height and affordable housing, I would use CURE to say all affordable housing has to be on-site.”

Jason Thumlert with Endeavor said that if the city of Austin were to contribute to bringing the affordable housing percentage from 15 percent to 25 percent, the developer would be agreeable to that.

However, José Valera, chair of the East Cesar Chavez Neighborhood Planning Team, said that City Council Member Pio Renteria had attended its last meeting and that he was “not optimistic at all about the city’s ability to achieve that extra 10 percent.”

Bertha Delgado, president of the East Town Lake Citizens Neighborhood Association, questioned whether the one- and two-bedroom units would be catering to the housing needs of the surrounding community. “We’re having an issue with displacement; we’re having an issue with gentrification,” she said. “That’s what we need to be talking about, instead of paid consultants coming up here and just selling you all the project.”

In attempt to assuage this concern, Commissioner Trinity White proposed a friendly amendment to a motion made by Zaragoza to approve the cases without the extended height restriction, where 30 of the 41 floating affordable units would be designated as two-bedroom, but it was rejected by the motion’s second, Commissioner Karen McGraw.

Commissioner Michael Wilson made a substitute motion to approve the cases with the staff’s original recommendations, and Commissioner James Schissler seconded.

Commissioner Fayez Kazi proposed two friendly amendments to recommend a five-year time frame for parcel 6 and for the city to look into contributing the 10 percent of additional affordable housing.

Commissioner James Shieh made a friendly amendment to include strong language in the proposal that would emphasize how the 125-foot office tower should not set a precedent for future development. Nuckols suggested that staff use the language used in the Zach Theatre ordinance as an example.

The motion passed 9-4, with Nuckols, White, McGraw and Zaragoza dissenting.

Photo by Patrick Lu made available through a Creative Commons license.

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