Council members irked at low appraisal of parkland for Oracle expansion
Thursday, December 8, 2022 by Chad Swiatecki
City Council members pushed back against some of the steps taken by staff over the past year to work out a complex swap of city parkland approved by voters last year.
During Tuesday’s work session, Mayor Pro Tem Alison Alter used discussion of Item 60 on today’s agenda to question the appraisal process used to determine the value of a 9-acre parcel on South Lakeshore Boulevard near South Pleasant Valley Road, currently the site of the city’s central maintenance complex. That parcel is the key piece in last fall’s Proposition B, which called for it to be exchanged for 48 acres of waterfront parkland elsewhere along with enough money to rebuild the existing maintenance complex and remove a similar facility at Fiesta Gardens.
Tech giant Oracle came forward with the proposal to acquire the parkland it hopes to integrate into its campus that sites immediately to the west of the property.
In discussions held last year, Oracle representatives and the city formulated a plan in which the company would purchase the former Driveway Austin Motorsports’ 48-acre parcel abutting John Treviño Jr. Metro Park and give it to the city, along with a to-be-determined amount that the city will use to construct the new maintenance facility, which is expected to cost $40 million-plus.
Alter’s concerns centered on the update from real estate services officer Michael Gates, who said the $35.5 million appraised value of the Lakeshore parcel didn’t include the expectation that it could eventually include the density of surrounding properties and carry a far higher asking price.
Gates said the lower expectation for the appraisal came because the city didn’t include the parkland parcel in the East Riverside Corridor Master Plan, and that Council should have taken action after last fall’s election to add it to that overlay and make it possible for an appraiser to approach it with the right assumptions about its highest possible value.
“The appraiser is going to assume whatever zoning can be achieved. They took a look at the property across the street … to assume that it would be able to include in the corridor plan would be a hypothetical that the appraiser probably thought was a bridge too far.”
Alter said the land needs to command an appropriate value for the development Oracle has planned for it, and the lower amount will hamstring the city’s attempts to make good on its pledge to use the land deal to fund a new, larger maintenance complex.
“The consequence of this is that voters are expecting the central maintenance facility to meet the need of (the parks department) in the new location and there is not enough money between those numbers to get even the most modest of what we need,” she said.
“I’m just trying to understand how we get these pots of money and make it really clear that we promised voters that we were delivering an essential maintenance center of particular quality … there’s something off in the numbers I’m hearing at this point that gives me a lot of pause.”
Council Member Kathie Tovo joined Alter in her direction for staff to do what is necessary to get the highest appropriate sale price for the Lakeshore parcel.
“This has been described to me by various folks including some former staff as one of the most valuable tracts of land in the city’s portfolio, and in our conversations prior to putting this on the ballot we had really explicit discussions about the issue,” she said. “Tracts around this one have really significant entitlements … I’m really concerned about what I’m hearing that the appraisal doesn’t take into account the entitlements under the Riverside plan.”
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