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Central Health PUD passes on first reading

Monday, May 24, 2021 by Jonathan Lee

City Council has approved Planned Unit Development (PUD) zoning on first reading for the 14-acre Central Health site at 601 E. 15th St., formerly home to Brackenridge Hospital.

The zoning, if approved on second and third reading, will allow tall and dense buildings on one of the biggest redevelopment tracts in Central Austin.

Council first outlined its priorities for redevelopment in 2014 when it passed a resolution to adopt new land use regulations for the site. Those regulations were almost put into ordinance last year in the form of an overlay, but Council members at the last minute said they preferred PUD zoning instead.

Once Central Health, the owner of the tract, secures the PUD zoning, it will send out a request for proposals to developers. Because the zoning waives height and floor area ratio limits, the developer would have freedom to build as dense and high as it wants.

Dense development is not only in the interest of Central Health but also of property owners who pay tax to Central Health. The denser the development, the more money Central Health will make from the site, adding a non-tax revenue stream to support its mission of providing health care to underserved communities.

“The whole drive behind wanting density on this property is to offset the tax revenue to the taxpaying citizens of Travis County that Central Health would be collecting if they didn’t have this additional revenue source,” Nikelle Meade, agent for Central Health, said.

This year, Central Health will tax properties in Travis County at approximately 11 cents per $100 of property value. This rate is similar, for example, to Project Connect’s 8.75 cent per $100 valuation. The overall tax rate for most properties in Austin is around $2.25 per $100 valuation.

Council Member Kathie Tovo raised concerns about the PUD zoning waiving some requirements of the Downtown Density Bonus program. The program, which gives projects increased height and density in exchange for community benefits, usually kicks in when a building reaches a floor area ratio of 8:1. But in this case, the program would kick in only after 25:1 FAR, saving the developer from paying the fees toward affordable housing typically required for FAR below 25:1.

“I can’t support that, at least not at the moment,” Tovo said, questioning the rationale for setting the density bonus baseline so high for this project.

“We are asking for the city to not look at this as you would with a typical for-profit developer,” Meade said, adding that the affordable housing fees would just be passed on to Central Health, taking away funding for its “critical” service to the community.

Tovo also asked about the 100 on-site affordable units that the PUD ordinance would mandate. Jerry Rusthoven of the Housing and Planning Department explained that the developer of the site would have to reserve 100 affordable units, but the city would have to pay for them.

Mayor Pro Tem Natasha Harper-Madison moved to approve PUD zoning with certain requirements set forth by the Planning Commission and Environmental Commission. The vote was 9-0-2, with Tovo and Council Member Alison Alter abstaining.

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