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Eckhardt offers the city Palm School in exchange for expo center, hotel tax

Wednesday, November 20, 2019 by Jack Craver

Travis County Judge Sarah Eckhardt says that she and her colleagues on the Commissioners Court are willing to give away the Palm School to the city of Austin. But they want a couple of big things in return.

In a letter to City Manager Spencer Cronk, Eckhardt proposes the county transfer ownership of the historic downtown property to the city in exchange for the Travis County Expo Center property and the right to begin levying a 2 percent Hotel Occupancy Tax by the beginning of 2022.

Eckhardt noted she had met with Cronk last week to discuss the future of both properties: “My meeting with you last Wednesday showed promise that we can forge agreements benefiting downtown Austin as well as catalyze economic development and equitable investment in far East Austin and Travis County.”

The offer stands until 5 p.m. on Dec. 16, said Eckhardt.

Although the county owns the expo center facility, the city owns the 128 acres of land on which the building sits. It is leased to the county through 2033. In order to move forward on its desired redevelopment of the expo center, the county must acquire long-term rights to the property, either by owning the land or getting an extended lease.

Voters earlier this month authorized the county to levy up to a 2 percent hotel tax to fund a redevelopment of the expo center. However, the county cannot levy that tax until the city stops levying a 2 percent hotel tax that is being used to pay off the debt from an expansion of the convention center that voters approved in 1998.

The city is currently scheduled to retire the debt in 2029, but Eckhardt has said she believes the city could expedite the timeline by dialing back its ambitions on the convention center expansion that city leaders are currently discussing.

As for the Palm School, the county currently owns the property, which it has for decades used as an office building, but it plans to leave in 2021. Talk of selling the land to a private entity has drawn pushback from activists and City Council, which in May unanimously backed a resolution calling for turning the historic property into a public cultural center celebrating the Latino community that was served by the school between 1892 and 1976.

While city leaders have shown no interest in paying the roughly $50 million a county appraisal says the property is worth, county leaders have said they’re not going to simply give the property away. Eckhardt has also rejected the idea of the city and county coming to an agreement in which they share responsibility for the property.

In her letter, the county judge acknowledged the city has “shown no interest to date” in exchanging the expo property for Palm, but said she was open to counteroffers. She suggested the city-owned HealthSouth property on Red River Street as a potential bargaining chip.

Mayor Steve Adler told the Austin Monitor on Tuesday that he wants to see both the Palm School preserved and the expo center redeveloped, but he didn’t “see those things being linked.”

Instead, he stressed his hope that the county and city could collaborate on preserving and operating Palm School and redeveloping the expo center.

“I think they’re both things we need to work on and make happen,” he said.

Adler said he doesn’t care which local government owns which property.

“I really reject all that,” he said. “We share constituencies, we share goals, we share purposes and we should be delivering for this community.”

Adler said he didn’t have enough information to say whether the city would be able to retire its debt from the previous convention center expansion and allow the county to take over the tax.

“We’re not anywhere near close enough to understanding the variables involved in that decision,” he said.

Council Member Kathie Tovo, Council’s lead proponent of the Palm School preservation, said she was encouraged by the negotiations between the city and county and believed the two would eventually come to a mutually beneficial deal. Like the mayor, she does not appear convinced in the specifics of what Eckhardt has proposed.

Tovo also rejected the idea of opting for a cheaper convention center project in order to retire the debt sooner. The plan that she and others on Council have endorsed has an estimated $1.2 billion price tag.

“I intend to continue to support an expansion that I believe vastly improves our downtown landscape,” said Tovo. “And that is the more expensive option.”

Photo by Larry D. Moore [CC BY-SA 4.0], via Wikimedia Commons.

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