Travis County Commssioners Court
August 5, 2003
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Item 35
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35 is to consider request from endeavor real estate group, llc, for financial incentives on the domain development project and take appropriate action.
>> > we do have in the backup a draft proposed agreement and we have gotten from the attorney for the developer. If you could look up the substantive changes.
>> > I can make a pretty quick overview of the changes.
>> > what we tried to do is look at the policy to make sure that the proposed agreement contains -- in the proposed agreement we're looking at -- by the way, we also tried to track the city of Austin agreement that the city of Austin approved about a month ago. In terms of the capital investment, that amount is in excess of $100 million. In terms of the jobs it's in excess of the 750. It's at 1100 permanent jobs after completion.
>> > judge, I think that was one of the changes we made maid when it related to jobs. The city headache broek it out in term of what happened during the construction period and what were permanent problems jobz. And we had a good deal of discussion about that and what we have in here is what are the expectations of minimum permanent full-time jobs. We felt like trying to maintainter compliance on temperature jobs during construction -- temporary jobs during construction would be a nightmare in terms of trying to verify payrolls. Because what's really important is what's at the end in term of permanency on jobs as opposed to -- the construction would only be a bonus in term of the good things that happened there, but we note thought trying to monitor payroll during construction was -- if the city wants to go there, that's lovely, but that's not what we were looking at. It was the end result. And what happened in the meantime --
>> > judge, where are we in terms of capital metro with this project? > could you come up to the table and identify yourself. Thank you.
>> > I apologize. My name's kirk rudy. I'm with endeavor real estate group and this is bries miller with endeavor real estate group. We have not, Commissioner, approached capital metro since the last time we've met. There have been some people out of town. Our intense is to he -- intention is to eventually approach them. If we do, it will not be on the basi as a long-term 20-year agreement. If we are successful in having cap metro invest, it will be on a one-time basis or not at all.
>> > and related to transit?
>> > yes, ma'am. Related to infrastructure and transportation related improvements within the domain site, yes, ma'am.
>> > well, and you know that -- my biggest concern there, just so I can say it publicly one more time, anything that would have them be involved in this thing that would indemnify them with the one penny sales tax, which would mean if you allow them to participate such an amount of years that you may just basically lock them in to that, and that is something that I would be very concerned about. So if they do get involved, if they're going to get involved in a one-time, five million dollars or whatever it is. You all know that, but I wanted to clarify that one more time. Thank y'all.
>> > is there one issue that stand out maybe as the biggest one that in the city of Austin agreement there is a calculation of the present day value of the incentive and spread that out over 15 or 20 years is what I was thinking. And their proposed language on page 8 when there's a calculation for the present day value. This is the language that the city of Austin has in our contract?
>> > it's an abbreviated version.
>> > so you think we're affected by the same?
>> > yes.
>> > the amount?
>> > yes.
>> > the job creation from the affirmative -- the permanent jobs of 1100, what type of permanent jobs are we talking about there? Could you give me some type of --
>> > it's not a breakdown job for job, of course, but in a general sense.
>> > we expect there to be approximately 500,000 to 670,000 square feet of retail space, department stores, restaurants, retailers. We expect many of those employees to be employed in those businesses at floor level and at management level positions. We may have a health club. We're talking to theaters. Those are the types of employees that would be in that component. We're also going to have about 400 to 500 square feet of residential space and so we'll have people that help maintain and operate multi-family apartment complexes as well.
>> > okay.
>> > I can elaborate.
>> > go ahead. Were you finished?
>> > to elaborate on what kirk just said, I'm bryce miller with the real estate group. The study that we conducted based on the types of users we're targeting for this center shows that the average annual compensation is in the neighborhood of $35,000 per year, and that 50% or more of the employees in the project will receive full medical benefits, and many of those will receive -- would qualify for four o one k's. The range of jobs, Commissioner, would start at a higher end, which would be the store manager for a major department store. And then it would -- the other end of the spectrum would be the food service support people in the restaurants. We're hoping to have 75 to 100,000 square feet of restaurant space allocated within the project for food service. So we are covering a fairly broad spectrum of compensation. The high being in the 100,000-dollar a year range, the low I would assume would be in the -- owe in an hourly rate. Just what amount of the hourly rate I can't say.
>> > just a larger scale of what you're doing here, a bigger picture, a bigger type of setting situation compared to what I'm trying to do in precinct is. That's exactly what this is. You're just doing it from a larger scale. I think when you mention retail and all these other things, like an anchor tenant. With the type of housing, the smart housing initiative and a whole bunch of other stuff that you have included in here, it will be attractive in itself. But the concept basically is a larger scale proposal to what I'm trying to do as far as development in precinct 1.
>> > yes, sir.
>> > it's just a larger scale.
>> > yes, sir.
>> > but basically the same animal. Okay. And how will this be advertised, I guess, if the court decides to approve this, how will that draw people or persons in Travis County? You know, we're trying to create some jobs here. How would this draw those persons that are unemployed, how will you advertise to ensure that those folks that are unemployed in this area will have an opportunity to actually work and will it just basically be with Travis County employees or are you going to be hired from all other counties?
>> > well, the public investment from all the areas that we're talking to will make the project a more viable project and help us to attract more tenants to the project. The tenants themselves will be very active in hiring employees. I suspect predominantly from Travis County, but maybe from the region as well. It will be a very visible project in terms of -- we have a number of people, marketing people both in this city, in this region working on attracting tenants. And when we're successful at tracking those tenants, they will become very active in staffing their own restaurants or retail stores. They will be very active in trying to hire people.
>> > thank you.
>> > again to add on to what kirk has said, during the construction phase of the project we have committed with the city to use -- I don't have the exact language, but reasonable -- frses. Scernible).
>> > and to retain a consultant/spokesperson to aid us in getting the word out that the project is interested in doing business with hubs.
>> > what's the amount of investment in the city contract?
>> > we anticipate the city's investment over a 20-year period to be a total of --
>> > what's the amount of the total capital investment from the city? You indicated to the city you would invest how much?
>> > the total project cost we anticipate to be $130 million.
>> > okay. I think our first draft was 125 million.
>> > no, there's no commitment in the city agreement, I don't believe, to a dollar amount of the total project cost. We have given them preliminary numbers for what we think the project is going to cost.
>> > about 130 million?
>> > it's about 130 million.
>> > and I think ours was 125 and the city was 130. I think we knocked five off theirs.
>> > your honor, I don't think there's a required investment of an x amount in the city agreement, but there are some performance standards that have to be met, and in reality those cannot be met without an investment in that range. In terms of the number of jobs, the tax value and those kind of things.
>> > judge, if I recall, our discussions, we did take note of the fact that the city did not have a minimumment to be invested. And we preferred that they would meet the minimum of 100 million, that that may have been good enough for constituent, but it wasn't good enough for us. We wanted it in there, that there would be a minimum of 100 million, which would be laying out and matching what is in the proposed policy related to economic development, that they would meet that standard, which was the 100 million.
>> > so that was --
>> > the city doesn't have it in their c and that's their business. But we wanted to be very clear that it would be a minimum of $100 million. And if it happened to be 130, so much the better. If it happened to be 200 million, we're thrilled, but it had to meet the minimum that we've got proposed. And again, that's just a proposal in the economic development policy, which this clearly would.
>> > that's on page 4.
>> > well, that's their business, but that's pretty odd that you would not have --
>> > I think the numbers would shake out. There is a requirement to build at least 500,000 square feet, at least 300 units of multi-family. And in today's dollars, that's going to translate into --
>> > you right, but we --
>> > right. But we felt better saying it.
>> > one thing about this proposed agreement is as far as the housing component, that it's at least 300 residential units, which is on par also.
>> > I would say that I -- I don't think that anybody needs to be thinking that even though this is going to be affordable -- we like to throw that term around. I know we don't like to use affordable because that always insin waits something that some people don't like, but something that is attainable, I suppose, attainable housing from a cost standpoint. Did you get that down over there? But I think that we do need to make sure the people understand this component, most of the people that would work in this project would most likely not be able to afford one of those dwellings. I mean, I would suspect that. 35, if that's the average, I would say that your managers would be able to afford it, but the lion's share of people that are going to work in the domain at $35,000 a year are most likely not going to be able to afford one of the units that you all -- is that correct or do you think they would be able to live there?
>> > let me say that I think the final agreement with the city, and it has something to do with this agreement with the county too, is that 10 percent of the units are allocated to those -- I may get this wrong technically, but the thought is that are at 65 percent of the median income in Austin. And there are different median incomes for different members of families. If there's four people in a family, three people in a family, two people in a family. And I -- I don't know that we've looked at the numbers to see how many employees the average range is $35,000, how many people are above that and going to meet that 65% median threshold. I will say that there are about 20,000 employees, not just at the domain site, but within a mile from here, that work at a number of different companies in that area that we hope would be interested that some of those people would be eligible for these apartments that would live in those apartment compleks.
>> > but in terms of apartments that have come through the housing corporation, there are a lot of apartments that are in the northwest -- kind of the arboretum area that if you looked at them you would go market rate. And no, there are set asides within those apartments, a lot of them on great hills trail, to make sure that the affordableability is still there. So there are set aside, and this would have a set aside as well. If our definition of -- what's that word, attainable?
>> > [ laughter ]
>> > I'm sorry, judge, the one thing that I think we did have a little bit of confusion, you and i, and in terms of the way we put this in here, and I think it's page 9 of working off of the draft is that it says that the maximum reimbursement is five million. That has also been said as five million in present value dollars. I'm now having an appreciation as to why the city put in this very bizarre formula in theirs because it basically says a smaller number, not present value. So we either need to adjust that, that that means five million net present value, or state the one that truly is over the 20-year performance because that is what has always been portrayed to us. It's five up front or whatever that is over a 20-year period. And those are not the same concept.
>> > Commissioner, we tried to address that in our comments, and it's five million dollars, today's dollars, or it's $9,317,793 ofer a 20-year period.
>> > that's page 8 of the proposed changes?
>> > page 8 and 9, sir.
>> > I beg your pardon?
>> > it appears in two places, page 8 and page 9. We've said that it would not exceed whichever of those is lower.
>> > we'll look at those between now and next week. The present day value is critical part.
>> > yes, sir.
>> > anything further today?
>> > yes. One thing. I'd like to thank you for looking at this. I think Commissioner diewrty did bring up a good point, and that is the 10% set aside as far as folks trying to live in those particular units at the domain and making it work and having persons of that income level may not be and sfacial as others to be able to live there. Again, when I met with you on one occasion or two occasions,, I did make sure that we were doing it, but I wanted to make sure that the city of Austin was also doing it to make sure that we had a affordability to ternz who didn't exactly meet the economic guidelines as far as affordability as far as some of those particular units. I appreciate y'all getting that included.
>> > you did mention that, Commissioner. You also pressed upon us that we need to focus on small businesses.
>> > exactly.
>> > in part of that discussion there's a-million-dollar fund that we're allocating to subsidize if you will or help small businesses in this community locate at the domain.
>> > okay. So I will be getting with you if necessary between now and next week because i've got to protect precinct 1 also and do the same kind of thank we're doing. Thank you.
>> > it will be back on the court's agenda next week.
>> > thank you very much.
>> > christian, can we get your overview in eight minutes?
>> > no.
>> > judge, that was 34. You said 35. It was 34 will be back.
>> > 34 and 35.
>> > both of them.
>> > thank you.
Last Modified:
Wednesday, August 6, 2003 4:52 PM
