Travis County Commissioners Court
July 25, 2006
Item 17
Item number 17 is to consider and take appropriate action on request from hill country galleria, lp, for creation of a road district.
>> good afternoon, judge, Commissioners. Carol joseph, tnr. Back in December the hill country galleria represented by arm brift and company, applied for an application and made an application to become a road district, Travis County galleria road district number one. The requirements of our policy dictated that we receive various letters of points of interest or concerns from the various entities based on our policies, the auditor's office, the bond counsel. In addition, we reported in a work session a unified report. In that report we had several issues which are listed in the back in exhibit 1. Since that time david armbrust and his staff have been meeting with the various Commissioners and my understanding is that they have resolved their issues. They are here today to speak to their issues. If you want, I should go through all of them again. We went through them in the work session, and I don't know the end results of their conversations, so I can't speak to whether they have all been resolved. My understanding is that they have been. I tried to get (indiscernible) to attend today, and I was unable to reach him. I think he's out of town. We've been playing phone tag. He didn't try to get me.
>> thank you.
>> I have a question. It's probably for sheryl. And david, if you want to come up real quick just in terms of making sure we did get the one last thing resolved.
>> I meant to say I e-mailed this stuff to them just about half an hour -- 11:30, around that time. It's hot off the press.
>> one of the things we're talking about is removing anything that even looked like it was anything other than we are a pass through for other kinds of activities since there will be no subsidy, however modest. I guess if you were here to see us not have to take up this week the golden triangle road district. So there are things that appear on our agenda. Did we reserve the right for the o and m to reimburse the county for albeit modest work, but there is a certain amount of work that remains for the life of this road district. Where did we end up on that?
>> I think where we are on that the owner has agreed to put into the development agreement that he will pay those costs on an annual basis. We have talked to some of the staff who I think were going to talk to your office and we didn't hear back just to get an idea of what the new costs were. But he did indicate that they were not significant costs. And I think what we have recommended to our client is that we have put that into the development agreement so that there's no question about that.
>> the developer has agreed that there will be no subsidy coming from public funds or from the county, and to the extent that there are even personnel costs for reviewing the application each year, we will cover those as part of the bond issue.
>> if we had taken up the northwest Travis County road district, there is -- there are duties and responsibilities related to payment of claims and investing road district funds and preparing a budget. And it's ridiculously modest, but it's something, so we wanted to make sure that was indeed covered in terms of for the lifetime of a district.
>> so these bullets are from where? What source?
>> I'm not aware. It's the first time they came from us. This background, as you recall, the court had a work session a couple of months ago and really the purpose was to try to raise questions, you issues. And we took notes and issued and there were a number of issues that were raised. We've spent the last couple of months really trying to address all those issues and we believe that we have. One of them even involved the village of bee cave. There was a question about whether the road would remain open in perpetuity as a public facility, and you have received I think under separate cover a letter from the village of bee cave saying that that will be the case. So -- and I think that relates also to an issue that was raised with respect to your balance sheet and the financing aspects. But I think we've answered all the questions that have been put to us. As you rawm, this is a road -- as you recall, this is a road district that we're asking for some public assistance. The village of bee cave has agreed to participate through a 380 agreement throughout the whole process the developer said this is a very significant development, very significant mobility improvements. And we need some public participation to make all this work. It was always understood that there would be kind of a second piece, either a municipal management district or a road district or something like that, and so we're here today really asking for the second piece. The first part has been approved by the village of bee cave.
>> so approval to go ahead today will mean that what additional steps take place? After today.
>> if the county votes to create the road district, then we need to negotiate with your staff the final documents, final creation documents, and those would either be negotiated or brought back to you for signature or the court or whatever your idea is. We would have to negotiate the agreements. We don't anticipate that being very complicated. Again, I'll just remind the court that this district is so different than anything you've done in the past because no bond will be sold until the value is on the ground, period.
>> at some point the financial feasibility of the businesses there will I guess determine whether or not the road district makes sense.
>> yes, sir.
>> so that condition will be stated in the documents that you have in mind?
>> yes, sir.
>> I'm assuming everything will work out, but in the end our financial people have to tell us that based on the businesses that are there, they would support indebtedness by a road district.
>> the intention is that we would not even ask the county to consider issuing bonds until the value is there and verified by your staff and recommended by your staff that there's sufficient value to support the amount of bonds that we've requested to be issued, and we anticipate that would be a couple of years from now.
>> but judge ultimately, it's really not the strength or the comfort that we need to get in the tenants, it's really -- unless I'm reading all of this mess wrong, and the strength of that company is one that certainly gives me the comfort level that I'm fine. Isn't that ultimately --
>> Commissioner, it's the strength of owe pus, but the only taxpayer here will be opus and the development, and your staff would look at the value of the improvements, the buildings, the parking lots, the parking structures, but then also the viability of the businesses. And today even before any vertical construction is started, they've leased half the property. So they're optimistic they're going to have lots of value there, but your staff would look at the whole big picture.
>> anything else?
>> unless one of you have something to say. I've got one bit of housekeeping to add. That is, if you do direct us to move forward with the rest of the procedure to examine formation of the road district, part of the road district policy requires the applicant to reimburse the county for all of our expenses, bond counsel, the financial advisor, basically all the outside consultants and experts we rely on. And as part of their application, the applicants have submitted an agreement and they have executed the agreement that basically says they'll pay all those expenses, they will pay them within 30 days of being invoiced by Travis County. So if you move forward, we'll be getting billed for work by bond counsel, financial advisor, so on, they'll submit those bills to us and we will in turn -- what I'm saying, you need to sign that agreement so we can then send those invoices to to the applicant and they can reimburse the county as we incur those expenses.
>> we're agreeable to that.
>> and the actual expenses as opposed to numbers of ours. It's what it took to get the work done.
>> yeah. There was no cap inserted.
>> so how does that square with the annual reimbursement of expenses that was referenced?
>> at the point when we ask you to issue bonds, we would include in that amount what we jointly, the county and the financial advisors, deem to be the county's expenses for reviewing, processing the district. And that would be included in the bond amount.
>> and they would pay for creation of the district.
>> yes, sir.
>> by now we're talking about a reimbursement within a month of receipt.
>> when it's created.
>> those would be paid as they're created now.
>> all we're setting is a debt service road, which is the -- debt service rate. It doesn't have any kind of o and m. This would have, however modest it needs to be to take care of whatever we estimate it to be, unbelievably modest expenses but they need to be covered because over 20 years they add up to be something with several zeros on it.
>> judge, I move approval. Any addition that tom thinks we need to put in that we don't already have written as to, you know, what david has said that they are in agreement to do with those particular expenses.
>> so the motion is basically to proceed with creation of a district?
>> yes.
>> whether or not the road district actually issues debt turns on financial opinions, analysis, etcetera, that we see later on.
>> it would require a recommendation from your staff as to that.
>> I second the motion. Carol, attached to your memo is an exhibit one that contains a list of issues. These issues are separate from the wish list.
>> I don't have that list.
>> that we got from mr. Armbrust today.
>> okay.
>> so the issues that you listed in yours --
>> were the same issues that I brought up during the work session.
>> okay.
>> yes.
>> those are the same issues we've been working to solve, and we believe that those will be resolved through the negotiation of the final documents.
>> okay.
>> judge, if I may, I'm probably responsible for most of those bullet points. And when they were brought up, it wasn't intended to be reasons I am going to vote no, it was reasons that they would have to reach a very high bar in order to win my affirmative vote. And they range from things as seemingly silly as what's the name of this thing, and I see now we're calling it the Travis County-bee cave road district number one, to a very serious issue related to the subsidy which is being handled through the o and m side. We questioned heavily the sufficiency of the improvements on highway 71 and go work has happened there. A big one for me, and we've gotten that letter, was the absolute assurance that this roadway after the fact would always remain a public roadway. That if things got busy on that road, bee cave could not make a decision at some later date of saying, that's really an internal mall road and the public gets excluded. That's not the reason going in here. And then questioning the sufficiency of the development I think as many people in this room now, malls can come and malls can go, but in this particular instance you're sitogsome really valuable dirt, so that's always going to be there to more than support the sufficiency of this road district. So anyway, I am going to be voting along with us and I appreciate all the work that's gone into here. I think it was a very genuine effort to meet a very high challenge that I laid out there in terms of -- because unfortunately we've had to learn from past road districts. I wasn't on here when some were creelted -- created. We don't want those things to happen on this one. I will be voting yes.
>> I have a couple of other roads if y'all are interested in looking at out west and we can wrap it all into this one bill if you don't mind, judge. [ laughter ]
>> you know, earlier when this came before the Commissioners court, I did vote no at that time not to support it. And I see no reason why my vote should change in that regard. So I'm going to continue to support as far as voting no and continuing to support my earlier vote and I stated all the reasons at that time, and those reasons are still paramount in my mind as far as me not creating the -- supporting the creation of this road district. I will be voting no whenever the vote comes up.
>> the road is under construction now.
>> yes, sir.
>> and when will it be completed?
>> there's two roads, highway 71 is being improved and so is galleria parkway. And both of them should be finished in the January-february time frame, 2007.
>> okay. All right. Any more discussion? All in favor of the motion? Show Commissioners Sonleitner, Daugherty and yours truly voting in favor. Commissioner Davis against?
>> voting no, against.
>> voting no.
>> thank you.
>> thank y'all very much. Look forward to working with you further.
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Last Modified:
Wednesday, July 26, 2006 10:34 AM