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Community Development Commission pushes for affordability at Statesman project site

Tuesday, July 19, 2022 by Chad Swiatecki

The Community Development Commission has asked City Council to require significant affordable housing be located on-site for the planned unit development for the former Austin American-Statesman property that is being led by Endeavor Real Estate Group.

The commission voted unanimously last week to resend its December 2021 resolution to Council, which called for 20 percent of housing units in the South Central Waterfront to be priced at affordable levels. Ongoing talks for the project, which received a unanimous first reading approval from Council in April, have circled around fee-in-lieu payments that would allow for it to provide equivalent to 4 percent of the units at affordable prices, with those units constructed off-site at a to-be-determined location.

Commissioner Karen Paup, who also sits on the South Central Waterfront Advisory Board, said those changes from the 20 percent goals established for the district early on would make the area accessible almost exclusively to wealthy residents.

“The developer has presented the idea of not providing the housing on-site but giving the city money, which would indicate the city could use it to provide housing elsewhere since the city wouldn’t be able to buy into the private developers’ property,” she said. “The developer is talking about giving something that is 4 percent or maybe a little less than that. So it’s low on the number of units and then instead of fulfilling the promise the the South Central Waterfront has made that it’s a place for everybody and would include some low-cost housing … the units would be all off-site.”

As of the initial Council approval in April, plans for the project called for six towers ranging from 215 to 525 feet tall with a total of 1,378 residential units, 1.5 million square feet of office space, 275 hotel rooms and 150,000 square feet of retail and restaurants, with over half of the property turned into public space. Endeavor has committed to paying for a reconstructed hike-and-bike trail, a lawn, a bat-watching area, plazas and rain gardens, though negotiations continue to decide who will pay for other features, including a boardwalk over the lake.

Representatives for Endeavor have said requirements around affordability and paying for infrastructure, including selected new roads, would make the project more risky financially. Council members have taken a range of stances on the project, with Council Member Kathie Tovo pushing for 10 percent affordability on-site while Council Member Chito Vela has voiced support for using Endeavor’s proposed fee-in-lieu money to pay for more permanent supportive housing for the homeless.

A draft memo to the city from the California-based consultant Economic & Planning Systems Inc. said that the Statesman redevelopment project already had a projected funding gap of over $100 million even prior to the recent effects of inflation on construction costs and changes in demand for residential and commercial units. The costs associated with six amendments made to the PUD by the city are stated to add nearly $350 million in costs to the project, with the affordable housing units priced for those making 60 to 80 percent of median family income levels estimated to cost $265.9 million.

At the April hearing, attorney Richard Suttle said Endeavor is willing to discuss the city’s goals for the project, while emphasizing, “It has to be financially sound.”

Commissioner Heidi Sloan noted that even with money from Endeavor, the city could face challenges to creating 50-plus, or more, residential units elsewhere in the city.

“We know developing new affordable units is not always easy and so this is sort of a question of having a bird in hand versus not even having one in the bush, and having to fight the political fight to find where to put these units elsewhere is not a given as a task for Council and for the Housing (and Planning) Department,” she said. “Relating something similar to our (December) recommendation would speak to our unwillingness to waver in that philosophical policy position.”

Rendering courtesy of 305 South Congress PUD via the city of Austin. This story has been changed since publication to clarify the current fee-in-lieu proposal and the 20 percent affordability goal, which applies to the south central area, not the project specifically. 

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