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Del Valle PID moves forward, but county is not done negotiating

Wednesday, February 13, 2019 by Ryan Thornton

The petition to create the Velocity Crossing Public Improvement District in Del Valle was unanimously approved by the Travis County Commissioners Court Tuesday morning after its third and final public hearing.

As the county’s first commercial PID, the development has raised a number of concerns over the past several weeks about what distinguishes this PID from any other attractive mixed-use development. Up to this point, the designation has been reserved for residential developments that provide a number of benefits to the surrounding community that would typically not be included as part of a site plan. However, as Commissioner Brigid Shea noted, many of those benefits have become expected features of newer, denser neighborhood developments.

In the case of Velocity Crossing, those improvements include access to public transit, separated bike lanes, generation of primary employment and tax revenues for local schools, and an extension of a reclaimed water line to the district. While agreeing these are all good, Shea said such features are found in many developments not designated as PIDs.

“What else is the public getting above and beyond what the market would have produced anyway?” Shea asked. “I don’t completely buy it that they would have built an ugly and unpleasant place if they wouldn’t have received all the PID money.”

The PID monetary structure will allow the developer to raise up to $70 million up front through bonds paid by property owners within the PID. All of that money will go toward the various public benefits. Given the amount of money involved, Shea said she is looking for commitment to public benefit that is “clearly beyond what the market would have produced.”

Velocity Crossing is also located entirely within Austin city limits, which means it is subject to different and more stringent design regulations. Given that a PID is meant to “incorporate more than minimal green building standards,” according to county code, Shea said it’s important to keep track of what Austin considers minimal building standards and make sure the design is not simply meeting the status quo.

“I want to be careful when we’re tracking what the ‘community benefits’ are, that we’re not giving developers credit for stuff that they have to do by law,” Shea said.

The court has previously discussed avoiding PIDs within the city entirely because of similar complications. Due to a citywide moratorium on PIDs, however, developers wanting to use the financial structure have no other option but to petition the county. Austin still oversees all zoning and land use permits within the developments, but the county issues the PID bonds.

With that financial authority, the county is also responsible for making sure the PID does what it’s supposed to do in benefiting the community.

Rosa Rios Valdez, president of Business & Community Lenders of Texas, said the site plans don’t show promise of the kinds of community spaces most needed in Del Valle. She listed numerous public spaces that the community needs, such as arts and learning facilities for youth, child care centers, a library, or spaces for small and minority businesses to share in the growth.

When it comes to such negotiations, however, the county’s greatest tool is to put community leaders in contact with developers to work out these types of possibilities. Short of rejecting the application, explained Karen Thigpen, assistant corporations administrator with the Planning and Budget Office, the county is statutorily limited as to where PID bond proceeds can go.

The county can incentivize better infrastructure and guarantee affordable housing, but is largely unable to help negotiate for such specific community needs. As in the case of the PID developer’s negotiations with HEB and ACC, County Judge Sarah Eckhardt said that instead the county can sometimes facilitate cooperation between different entities to create better outcomes for everyone.

To Shea’s relief, Tuesday’s vote only makes public improvements eligible for reimbursement through bonds and does not prevent further negotiations between the county and the developer.

In addition to looking for ways to tighten the criteria for PID qualification, Shea said she will be exploring ways to prevent commercial and industrial property owners within the PID from challenging tax appraisals and avoiding tax increases, a provision that Commissioner Gerald Daugherty said would “kill the deal.”

“I would like to explore that because it’s such a profound problem and it’s forcing a growing burden on homeowners who are having to subsidize commercial properties,” Shea said.

The city of Austin now has 30 days to reject the PID if it does not want it to go forward.

This story has been corrected to clarify where the money from the PID will be directed. Map courtesy of Google Maps.

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