Who’s in the Pilot House?

Mayor Steve Adler and his aides are doing damage control over the city’s Pilot Knob PUD deal, initially declared “a landmark affordable housing deal” by the mayor and District 2 Council Member Delia Garza. Adler is now responding to criticism of the deal with elaboration, while reiterating, “This is a valuable tool to create affordability.”

The Pilot Knob planned unit development (aka “Easton Park,” east of McKinney Falls state park, near 183 in southeast Austin) was negotiated over several months with developer Brookfield Residential, renegotiated (primarily by the mayor’s office and that of Garza), and approved Dec. 17 in 10-0-1 vote (D6 CM Don Zimmerman abstained). In a press release issued that day, the mayor noted that 1,000 of the estimated eventual 10,000 units would be affordable long-term (650 permanently affordable homes, 350 rental units with 40 years of affordability), and continued, “This is a huge win for affordable housing. Austin has an affordability crisis, and what we did today not only makes real progress to provide affordable housing but to make sure that it stays affordable on a scale that Austin has never done before but how we’re going to do things from now on.”

The primary mechanism of the agreement is to redirect a portion of the developer’s water and wastewater fees to a special affordable housing fund ($50-$80 million over 20-30 years), which the city could annually draw on to create the affordable units – with the homes via a land trust (city owning the land), and buying down the cost of the rental units. Moreover, a 10-acre portion of the 2,200-acre development will be donated to Capital Metro for a transit facility or park-and-ride (an estimated $2.5 million value), with another $6 million developer contribution for potential affordable housing.

However, subsequent news reports – first in the Austin Monitor, then in the Statesman and other media – headlined the “$50 million or more in fee waivers,” leading to the widespread perception that the money was an immediate hit to Austin Water and its ratepayers, a giveaway to the developer, and not a potential redirection of fees over the course of many years. Council members fielding angry constituent reactions started to back away from the deal, said they didn’t realize its fiscal implications, and are asking for reconsideration.

In response, Mayor Adler has posted a lengthy explanation and defense of the deal on the Council message board, accompanied by an apology, and promised a briefing in Tuesday’s work session: “In retrospect,” Adler wrote, “we should have more clearly communicated the mechanics of the agreement and the broader policies implicated in the days leading up to the council meeting and from the dais at third reading. I take responsibility for not taking the opportunity to explain the deal in greater detail. But we welcome the upcoming chance to do so, because we believe it is a fiscally sound deal that makes meaningful progress on one of our city’s top priorities – affordability, and does so in a way that does not irretrievably divert any money from the City’s water or any other department.”

In his post, Adler defends the PUD deal at length, notes that despite the term “fee waiver” the developer is in fact paying to the city for affordable housing all the funding that would normally go to infrastructure fees, and that the pledged amount over time “totals less than $2 million per year.” Moreover, he says that the agreement provides for another “$30 million in water/wastewater infrastructure that would likely otherwise be paid for by the water utility.” At a Friday press conference, Adler also pointed out that the agreement does not bind decisions by future Councils. “There may be times that the city needs more funding for the water utility or something else, for whatever reason,” he said. “The next Council can overturn anything we’ve done … or a future Council might want to redirect the funds because of different future needs.”

Adler said it is apparent now that “I didn’t give enough information” to other Council members as the deal developed, but reiterated that the deal “fits entirely within existing city policy.” He said he is looking forward to Tuesday’s discussion and Thursday’s regular Council meeting, adding, “I made a mistake, in that it is readily apparent to Council members that they didn’t have the full awareness of the details. I have learned from that mistake.”

Nevertheless, Adler insisted, “I still think what we did is right.” The mayoral explanation appears to be spreading out to the media, as the Statesman’s Alberta Phillips editorialized over the weekend that despite the flawed “rollout” of the plan, it appears to represent a serious attempt to address the city’s affordability crisis. Phillips recalls the many millions of city dollars spent on open space (“some $300 million since 1992”), and comments, “Clearly, the public has yet to witness the kind of response to today’s affordability crisis that city officials and grassroots organizers waged in the 1990s in the midst of an environmental crisis.”

Unless TNC regs once again devour the available time, all this is likely to be part of the discussion at Tuesday’s work session or Thursday’s meeting. D8 CM Ellen Troxclair has said she will propose a re-vote on the deal. For more on City Council, follow the Daily News and this week’s print edition.