Travis County Commssioners Court
December 7, 2004
Item 18
Number 18 is to consider and take appropriate action on requests from city
of Austin for waiver of 60-day notice of public hearing regarding establishment
of reinvestment zone at former robert mueller municipal airport site, designation
of a county representative for investment zone financial planning and related
matters.
>> morning.
>> good morning.
>> how are you, judge, Commissioners, as I hobble up here.
It was a hunting accident, actually, but it was with susan shiverson. [ laughter
] good morning, judge, county Commissioners. My name is vicky schubert, I知
the deputy chief financial officer for the city of Austin. I知 here on behalf
of the city council to do a brief presentation on our creation of a tax reinvestment
zone at the site of the former airport, which we're now calling the mueller
development. And to request your action in waiving 60-day notice requirement
before the city can hold a public hearing on this matter so that we can get
the zone established by January 1st, 2005. And i'd like to take a few minutes
to talk a little bit about the plan and a little bit about the reinvestment
zone to give you some additional information before you take your action.
As you probably know by now, this last Thursday the council approved the master
development agreement with catellus. As a part of that agreement the city
agreed to devote a portion of its tax increment from the property out at mueller
to help fund the project. And we agreed to do that through the creation of
a tax reinvestment zone, which I知 going to refer to as a trs. The project,
just to talk about why we need a trz. It is a 700-acre urban infill project.
We are going to have about 20% of that as parkland, about 140 acres. We will
have a substantial commitment to affordable housing. About 25% of the units
or at least 25% of the units will be affordable. And we're going to have a
comprehensive network of bike lanes and paths, just a lot of amenities that
you may not see in a normal development. In addition, unlike a green field,
an open field development, out at the airport there are a lot of things that
we have to tear down before we can start, the runways, existing buildings,
and that adds cost to development also. So this is like many projects across
the country that are similar development projects, the project as we are envisioning
it is not really feasible without some public financing. Based on our current
best estimates, and we spent a great deal of time talking to economists, engineers,
folks in the building industry, our financial advisors, we have come up with
a pro form in a ma that's a part of the agreement that gives us the best look
at what the finances will look like. We think current revenues from the project
will be in the 200-million-dollar range, while costs incurred will be in the
246-million-dollar range. We are proposing to fill that gap with public financing
we've committed to catellus that to the extent the project generates sufficient
funding to fill that gap, the city will help do that. We anticipate the development
will occur over a 10 to 15-year period based on what the economy looks like
right now. The economy has reform -- housing has remained strong. We will
seek a community with 4600 housing. About half of those would be single-family
and other owner occupied units such as townhomes or condominiums. 650,000
square feet of retail uses, including some local retail, also a town center
off of airport boulevard, which would be grocery stores, dining, dry cleaners,
local serving retail. And around the i-35 edge, regional serving retail. In
addition, we've got 400 -- not 400. We're estimating 4 million square feet
of office and institutional uses, and that includes the dell central Texas
children's medical hospital that's already beginning -- has begun groundbreaking
and the Austin film studios. At buildout we estimate the assessed valuation
of this property will be about one billion dollars. A little information about
the tax increment reinvestment zone. We are proposing that it be the entire
site of the old aimpt, which I believe we provided you with a map. And we're
proposing that it be created under chapter 311 of the Texas tax code. The
tax code has several requirements. First before the zone can be established
we must hold a public hearing. And before we can have that public hearing,
we must give notice to the other entities who have taxing jurisdiction in
the zone of the public hearing. We also must also development a proven project
plan and a financing plan, which we have done and we've provided, as well
as a presentation, which I知 providing today. The 60-day requirement can be
waived, and that is what we are requesting of you. I'd like to take a few
minutes to explain why we're requesting it. If the city doesn't establish
the tirz by January 1st, 2005, we would lose the value that occurs during
the 2005 calendar year. Despite the efforts of both catellus and the city
to get the agreement done earlier in the year, we found ourselves in early
November before we finally came to final terms. Because of the complexity
of the agreement, the parts that it has, we were not comfortable moving forward
with the financing plan and the tirz until the agreement was finalized. That
timing didn't allow us the full 60 days before January first. A couple other
pieces of information I think you need to know, creation of a tirz does not
obligate any other taxing entity to financially participate in the tirz. The
creation in and of itself. On the other hand, creation a tirz does not preclude
someone from beginning to participate at a later date should they choose to
do so. State law allows that entities that want to participate and contribute
a portion of their increment into the zone may do so at any time in the future
upon action by the board in agreement with the city. At this time the city
is not requesting that other entities to specifically participate. We realize
that everybody has had tough times recently, and so we didn't want to build
that into the deal itself. As I said earlier, we are requesting the 60 day
waiver, and in cases like the hospital bed where we know that they will definitely
not want to -- will not be able for them to participate in the future, we
are asking them to waive their membership. We are not asking that of you at
this time. That includes my comments, i'll be glad to answer any questions
that you have.
>> I have just a couple. Ow you doing today?
>> I知 fine, thank you.
>> I want to go back a little bit. I知 looking for a couple
of comments and then a question. For this particular site, going back to the
era of when the traffic was in there in this community and the other parts
of the community -- in fact, I still have a move it bumper sticker. I can
still recall david van os and I standing out there to get the one airline
to get the terminal act and get off the site. But to make a long story short,
I guess, there's been a lot of effort I guess done by this Commissioners court
looking at the future use of that facility, even to the point where we had
to fight and struggle to oppose proposed legislation to retain general aviation
at that site. And that was done here a couple of legislative sessions ago,
which we were successful in doing. However, there has been a proposed use
for some of the buildings that were out there, and I want to make sure that
some of that is still retained by persons in the community that have expressed
a concern. And I think you mentioned something about the Austin film studios.
Of course, during that time the community wanted to have an opportunity for
the youth to express themselves, and of course during that time we were looking
at this, it was basically how to reduce crime, youth crime in east Austin,
how you reduce crime. And what those young folks told us at this time, they
would like to have more music participation and also get in the film production
area. I recently had a call from thedown man who is still trying to head that
up. And I want to make sure what happens is that the youth still have an opportunity
to express -- whenever this site comes on board, that they have an opportunity
to express themselves of using their facility there that will still address
the need for their filming experience and getting that type of experience.
And that's really -- I think really important. And I know what we're doing
here is to, I guess, make a waiver as far as a public hearing is concerned;
however, those two concerns, since you did bring those things up, I think
they're still paramount as far as making sure you get the maximum use out
of that facility and make sure that those concerns that were expressed many,
many years ago by that community are still adhered to. So I知 still kind of
concerned about that.
>> okay.
>> so that was my question. My question is has there been
any intention to ensure that the filming industry, with those young persons
in this community, that still a possibility?
>> well, sir, the lease with the film studios is actually
a separate lease from this agreement. I am not extremely familiar with it,
but I can certainly talk to the folks who work with it and pass this information
along.
>> okay. That really would be important. Thank you.
>> I will do that.
>> so has the city had the public hearing?
>> no, sir. We are proposing to have it on the 16th of December.
That's the last council meeting prior to the holiday break.
>> and the public hearing will be at the new city hall council
chambers?
>> no. We'll still be at lcra until the end of this year.
It will be at 6:00 o'clock at the lcra hancock building.
>> that's just for those interested in coming.
>> yes, sir.
>> and so the request of this item is really for us to waive
the 60 day notice requirement of that public hearing.
>> yes, sir.
>> the first part of the item. There are two parts.
>> help me understand, because you know what you read in
the newspaper. Help me have a better sense of who is going to have say so
over who buys certain parcels of land out there? I知 not quite sure I understand
the process.
>> except for a site that we've identified as a potential
academic health center and an elementary school, catellus development corporation
will have the exclusive rights to negotiate both with for profit businesses
and nonprofit entities, including governmental entities who wish to locate
at the property. We do have a clause that talks about if catellus is negotiating
with a governmental entity that once they've come up with a deal that they
would bring that back to the council for approval. And partly put that in
there because of the impact of having a tax exempt property out at the site
and how that would impact our commitment in terms of the dollars that we may
have to put in to the tax increment financing.
>> in that case I知 having a hard time understanding because
at one point not so very long ago, Travis County was one of many entities
that was being actively talked to about whether you are interested in being
a part of the airport redevelopment project, and in fact, I thought the finalists,
catellus and I don't remember the name of the other local group, were basically
told to have conversations with not only Travis County, but perhaps others.
And now it seems like that is not what's being talked about. It's like that
will have to be an exception as opposed to that there was some sense that
there would be inclusion from the very beginning as opposed to there's almost
-- there's a veto power related to any other governmental entity, whether
it's Travis County or Austin community college or cap metro or anybody else,
and that disturbs me. It seemed to feel like a veto when at some point we
were all being told this is an amazing project, and some of the largest local
employers out there are going to be treated differently than other potential
employers out there.
>> it is not intended to be a veto power. It is intended
for the city to be able to take a look at the impact of any nonprofit type
entity locating out there on the project. There had been some discussions
with the county earlier I don't think that signing an mda in creating the
increment district is intended to stop those conversations, I believe, we
just felt like we needed to get the mda signed and moving forward, and then
we could work with you. I知 just curious in materials of the things that seemed
to be out there from the very beginning, did folks at the city let Travis
County know that things in the catellus agreement were going to be different,
that this kind of inclusively was all of a sudden going to require an extra
step and, no offense, a veto power by the Austin city council on whether that
fit into it or not. Because there seemed to be surprise by folks saying oh,
no, there's never been any discussion about anybody else coming out there.
And it's like, excuse us, you're rewriting history. There have been ongoing
discussions, we were asked, are you at least interested in exploring, and
the answer always was yes. And now there seems to be a deliberate effort here
to say we don't know what you're talking about.
>> I certainly do recognize that we have had some conversations.
I know we've had at least one meeting with christian smith. And I知 not sure
that we did notify him of the change. And I apologize for that.
>> [inaudible - no mic].
>> I don't recall that we did before -- we did before the
master development agreement was signed. We did not before the master development
agreement was made public on the web.
>> that's accurate. I've spoken to greg weaver as recently
as yesterday, and suggested that it would be very beneficial to have a discussion
with Commissioners court and catellus will future relationships. He has said
he would like very much to have the county there. The question of the city
having a role in a deal between the catellus and the county, as I mentioned
to vicky schubert yesterday, was a surprise. I didn't realize that that was
a part of the deal. I think what one must do is go into this with good faith.
And that's my intent. And would think that that would come from both parties.
The county brings some interesting characteristics to the table from a straight
financial standpoint. I recognize that the county will not be paying taxes
and therefore there is some issue. And if you're just looking at it from a
physical standpoint, it could have a bearing if you put yourself in somebody
else's shoes. On the other hand, there are other substantial programmatic
benefits from a county presence there. So there have been no discussion points
talked about other than the size of acreage that would be logical at the site,
and those discussions have occurred multiple times with multiple individuals,
both with the city as well as with catellus. So greg weaver, who is not here,
and actually I suggested to mr. Weaver that this request for a 60-day exception
is -- has much less to do with catellus and much more to do with the city
of Austin, that it would be beneficial perhaps in a work session in January
to dedicate an hour and have a presentation and a discussion and a dialogue
on the next steps. Because this is -- it is a fact that the mda is signed
and the mda does have this clause. I have not read it, but I take it at face
value that it does have a role for the city in any county presence at mueller.
Is that fair, vicky?
>> that is fair.
>> it was a huge surprise to me.
>> I just want to add briefly to christian. I also -- facilities
management has also had conversations with greg weaver about our presence
being there. And Commissioner Sonleitner, your memory is correct. Both applicants
to the city, their maps had Travis County noted on them at a key location
in the project, and there have been ongoing conversations ever since these
discussions began. So there is no surprise that Travis County has an interest
in finding out whether or not it's feasible to go there. I attended the public
hearing, which was held, I believe, about two weeks ago at a city facility.
The last public hearing before the mda was signed. And this is what I learned
of the provision, that any governmental entity wishing to locate that would
be -- that would have to be approved by the city council. I asked questions
about it, and was just told that, you know, many people that I spoke with
representing city positions, I will say one was a board member, one was an
actual city employee, says we had no idea that the county was interested at
all and the ship has sailed and it's too late to do anything about it. And
that really was a surprise to me. So I think this may be, and I agree with
christian 100%, this may be a case where the people we were communicating
with were not necessarily on the staff level, the folks that were actually
involved in the construction of the actual document. That may be a factor,
I知 not positive.
>> perhaps vicky could address that.
>> I知 not sure who you were communicating with.
>> the night of the public hearing who I was communicating
with, joe walker and mr. Hilgers.
>> and mr. Hilgers probably would not have known because
his primary role has been in the affordable housing component, we just pull
him in to discuss that.
>> well, during the times of the committee meetings and --
[ inaudible ]. And during that time a lot of these things have been discussed
--
>> the city is very much aware -- the county judge wrote
a letter to the mayor and the city and the city management has been aware
that of the county's interest. The question of whether the city -- the role
of the city in approving a non--taxing entity there does -- if you look at
the pro forma, there's a set of expectations financially over a 10 year period
of time, and those expectations are driven in part by increased property value.
And increased property value means increased taxation and increased revenue.
So if you think of -- if you were the owner of that property and at the farthest
extreme a billion dollars' worth of value was going to go to non-taxing entities,
one would have a very different pro forma than if the billion dollars was
going to a private firm. So I can understand the desire to have a role. It
was a surprise. All of the discussions that were occurring in executive session
for at least a year, if not two. And I guess at this point, as I said, I expect
that there will be -- [ inaudible ]. There have been relationships between
the city and the county as we have discovered in the last six to nine months
that either the relationships are so intertwined that I believe it would be
important to recognize that moving in one area results in actions in another.
>> help me understand it. This reinvestment zone strictly
is related to constituent's property taxes, vicky?
>> yes, ma'am.
>> it's it's not like a tif where you might role other kinds
of things into it, for example, sales tax or other kind of things?
>> the city will also be lowering our sales tax generated
by the property into -- rolling our sales tax generated by the property into
this, but most likely with a 380 agreement rather than a reinvestment zone.
The reinvestment zone, just the ad valorem tax portion.
>> and I know that's what folks like to concentrate on because
that's basically all we get here in Travis County is property tax dollars.
But the reality is even governmental entities pay utility bills, pay electric
bills, pay water bills, wastewater bills. These are all things that create
dollars for the city of Austin. People eat, drink, people go to the dry cleaners,
people buy gasoline. Those are all things that create sales tax dollars. So
the presence of a non-taxing entity can still be an ams. Ing plus for this
kind of a site because if I have to make that today on who will still be here
100 years from now, I知 not sure I would bet on certain companies that are
here in Austin right now, but I will bet on the state of Texas and I will
bet on the city of Austin and I will bet on Travis County still being here
100 years from now. So it just one of those things of it is only governmental
entities that are being told you have to go through the council or any non-taxable
entity going to the council?
>> the way we structured it is all governmental entities
would go to the council. Then we allowed a small portion for other non-taxable
entities. I don't remember the number of acres, but so catellus could sell
to a church or a nonprofit housing builder or something like that, without
coming back to the city. So the nonprofits are treated a little bit differently
in that we give away a little bit of acreage and they can sell ordeal with
that land up to that certain amount of acres, but anything above that, then
they would have to come back to the city also.
>> i'll remind the Commissioners court also that references
that have been made more than once, which is let's not put all of our eggs
in one basket. There's lots of opportunities out there, both inside mueller
and outside mueller. And if -- if one can come up with a rational deal with
catellus, if the city is interested in it, fine. If the city's not interested
in it, there's plenty other opportunities. So we're not caught, if you will.
It is -- it was a surprise, but that's the way the ball is, I guess.
>> vicky said from the very beginning that this only priewmz
that presumes that the city of Austin will be reinvesting its property tax
dollars into this property. You are not making that requirement, nor is there
a presumption that anyone else is going to participate.
>> that is correct.
>> when is the public hearing again?
>> it is on December 16th at 6:00 p.m.
>> anything further?
>> no.
>> I know this is not what you came over here for, why wouldn't
we be doing this after the public hearing. My fear is I know what the city
is wanting from us, and I can't imagine that with the number of years of playing
that has taken place out there that the public hearing is going to generate
some substantial -- no, don't do this because everybody associated with this
thing has been done for a long time. But I don't want somebody to come up
to me and say why did you do that before the public hearing? Something might
come up that would cause us to go, well, if we would have known that, maybe
we wouldn't have waived this period. Maybe you already have a good feel for
that much more than I do, vicky.
>> well, I guess two things, Commissioner. First, we did
have a public hearing at last Thursday's council meeting to discuss the mueller
development as a whole part of the presentation there talked about the city's
creation of a tax increment reinvestment zone, even though we didn't have
a specific hearing on that item, we did have a hearing on the development
as a whole and kind of how the deal worked. And in that meeting we only had
one of two out of 15 or 20 people that spoke or had criticisms of pieces of
it. I don't think anyone spoke against it in total. So I don't think that
there will be -- because this is more of a vehicle to get the project done,
I don't believe that there will be much if any opposition at the 16th meeting.
>> it comes down to folks believe it ought not be sold, it
ought to be retained. It has to do with the whole concept of mueller and not
the reinvestment zone.
>> the public hearing is scheduled for the 16th. That's nine
days away.
>> yes, sir.
>> so without waiver by the affected governmental entities,
if you have a 60-day notice requirement, that would bump the public hearing
into February. So you would miss your January 1, '05 opportunity.
>> that is correct. That is correct, judge. If we don't get
the waivers from all the entities, we would have to postpone the hearing until
January.
>> have you exhausted all the entities that you have been
to before with this particular language, all the taxing entities?
>> no, sir. I talked to aisd last night, and they will be
acting on the matter next Monday. Based on their discussion last night, they
asked us to bring back a resolution waiving the 60 days. So I don't anticipate
anything there. I believe that the hospital district, we talked to them last
week and I believe they were going to act on the matter sometime this week.
And the --
>> what about their -- [ inaudible ].
>> that is correct. And a.c.c. Did not have a meeting until
December 13th. So we will not now until December 13th whether we've gotten
all the waivers.
>> I move we waive the 60 day notice requirement of a hearing
that will authorize the county judge to sign a resolution. I don't have one
of those in my backup. If there's language that you have, if you will get
that to us, we will authorize the county judge to sign on behalf of the Commissioners
court. And no matter when the public hearing is had, you still need a county
representative on the board.
>> on the board once we create -- yes, there's a slot for
a county representative.
>> any more discussion of the motion? All in favor? That
passes by unanimous vote. Move that we designate christian smith the county
budget director as the county representative for reinvestment zone financial
planning whenever that position is needed. Discussion? I did chat with christian.
He eagerly anticipates -- [ laughter ]
>> I am happy to help, but vicky just said something that
there was a representative to a board. And it was my impression from the letter
that this was a representative for investment financial planning. Are these
the same positions or are we talking about two separate positions? And if
we're talking about two separate positions, it would be beneficial to clarify
which of these two positions we're talking about. And this is -- [ laughter
]
>> the agenda clarifies that for us. It would be the county
representative for reinvestment zone financial planning, which I pulled from
the letter. So if there is another one, we really need a written request so
we can agendaize, place it on the agenda and act on it.
>> that would actually be appointment of a board member after
the creation of the zone. We can get that back to you.
>> I am certain you will get back to our friend at the city
the nature and some of our discussions this morning. And the 4-o vote.
>> thank you. I appreciate it.
>> discussion of the second motion? All in favor? That passes
by unanimous vote. Anything else related to this item today? Thank you.
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Last Modified:
Wednesday, October 26, 2005 1:52 PM