Friday, May 29, 2020 by Jo Clifton

Council OKs rule changes for old Motorola site

Last week City Council gave preliminary approval for a number of changes to an existing land development agreement at the site of the old Motorola chip fabrication facility at 3443 Ed Bluestein Blvd., giving area residents hope for much-needed jobs on the huge property.

After hearing glowing recommendations for the developer, Adam Zarafshani, and promises that the project will mean more jobs for the area, Council voted 10-0-1 to grant the increased heights and other changes, with Council Member Alison Alter abstaining.

As Jerry Rusthoven of the Planning and Zoning Department told Council, the 110-acre site is almost totally unoccupied at the moment. The developer requested and was granted a 50 percent reduction in the parking and loading area from the previous plan; one building at a height of 160 feet, one building at a height of 400 feet and an impervious cover limit of 65 percent. Other buildings will be limited to 280 feet in height.

Attorney Terry Irion, who represents Zarafshani and the company now named Tech 3443 (previously 3443 Zen Garden LP), told the Austin Monitor his client is planning to house Fortune 500 companies in the towers.

Irion pointed out that the rent would be significantly lower than downtown because the land is cheaper. The property also has its own electric substation and there are plans for thermal tanks to chill water overnight and cool the buildings during the daytime. In addition, the developer is planning to put solar panels on the rooftops. However, Irion said the first tower will not be built for another three years.

Jon Hagar, chair of the East MLK contact team, and team member Angela Garza told Council their group was strongly in favor of the project.

According to a memo from the contact team to the Planning Commission, the developer has promised to provide a number of civic uses, including a farmers market, artist studios, a community garden parcel, a cafe, and a grocery/convenience store, with all of these amenities available to residents of nearby neighborhoods.

The memo indicates that neighborhood support is contingent on a number of promises, including the following: “Given the number of jobs this development is likely to create, the developer engages the East MLK (Planning Team), the neighborhood associations contained therein and other nearby civic institutions in order to maximize the employment opportunities for nearby residents.”

Irion said, “We think it’s time that East Austin got a major job center. And this is the place to do it because it doesn’t have any negative impact on any neighborhood.”

Zarafshani told Council he would build a community center “that would feature approximately 25,000 square feet for civic uses for East Austin. That is to be completed by phase three. And that will feature a lot of different programs for music and art, which has been the bedrock of East Austin.”

The developer also pointed out proximity to the airport, which would make it convenient for companies wanting to ship their products.

During the hearing, no one mentioned the fact that the site’s previous developer, Zen Garden, has been placed in involuntary bankruptcy. As the Austin Business Journal reported on April 16, three contractors who claim that Zen Garden owes them more than $1.5 million filed the petition for involuntary bankruptcy on March 22 in the U.S. Bankruptcy Court in Austin.

Canadian Dan White, who did not participate in the zoning hearing, is the majority partner in Zen Garden. According to the ABJ story, Zarafshani blames White for the company’s problems. White could not be reached for comment at his office in Edmonton, Alberta.

Irion noted that the bankruptcy is a reorganization, not a termination of the company. Irion did not want discuss the bankruptcy but expressed optimism about the outcome of the case and the project.

Greg Milligan, the court-appointed trustee, told the Austin Monitor via email that he had filed a motion with the bankruptcy court to appoint Irion as special counsel in the case. He also said, “Mr. Zarafshani’s company, Panache Development and Construction, was the debtor’s general contractor on the project prior to the bankruptcy filing and nothing has happened to disturb that relationship. I work with Mr. Zarafshani and the Panache team on a daily basis.”

On May 21, Council Member Natasha Harper-Madison made the motion to approve the requested changes to the development regulations for the property and spoke in glowing terms of the benefits of the project. She told her colleagues, “When you finally get something that you think your area needed, it’s exciting. It’s not every day that you see a landmark project like this that has overwhelming support from the neighborhood residents.”

She continued, “This project has a potential to generate jobs, community activity, where we need it the most in our eastern crescent. It also sits along the Southern Walnut Creek Trail with the all-weather trail … and it can help provide the kind of activity we really need to see to set the Green Line up for success,” referring to the proposed commuter rail line that would connect downtown to Colony Park and points beyond.

According to a memo from staff, the property has a restrictive covenant prohibiting housing. Harper-Madison said she wishes there could be a housing component. “But for those of you who aren’t that familiar with the project, you know, I understand how the applicants’ hands are kind of tied right now. I also remain hopeful that we can cut through those knots eventually and find out a way to make this truly mixed-use, truly mixed-income community development.”

Editor’s Note: This story has been updated to correct an erroneous statement about the Green Line. 

Map courtesy of Google Maps.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

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