The Making of an Endorsement

Decision

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10/8/08 9:39 AM

Katherine Gregor:

I respectfully, but strongly, oppose the idea of running a minority opinion, for the reasons cited below.

It's not a lemon. It's a successful project, of its kind. You personally may not choose to shop there; nor have I. But lots of people are thrilled to have it in North Austin. If there were fraud, the city could sue - a separate issue.

What I hear you saying is that you don't personally like developers and their tactics, or malls, or Endeavor, or incentives as a tool. Many share those attitudes and opinions. But the personal satisfaction of "sticking it to Simon" should not be a factor. Not liking developers, or growth, isn't grounds for a charter amendment.

I know it's hard to swallow this one - but we have a duty in writing endorsements, as an editorial board, to rise above our personal opinions and attitudes and examine the substantive issues on their merits.

I have spent a few Saturday nights at the Domain. There are tons of people and families there, using it as a Downtown. I never see anyone I know, but that does not mean it's not a community benefit for another crowd of Austinites - and they deserve nice places to go too. Lots of people are strolling around the pedestrian area, hanging out eating ice cream, listening to live music, eating dinner on patios. It's a pleasant pedestrian space, big trees with lights in them, nice landscaping, somewhere to go for people in North Austin. Families come out for the big Christmas tree lighting.

It's not your cup of tea, or mine. I stare at the people and wonder who they all are, and if they all work at Dell?? But LOTS of people live in North Austin, where there is no "there there." They are clearly using this New Urbanist "people place" exactly as intended - to feel a sense of place and community. And if you spend any time at all with the 10-year plan for the whole Domain area - which this, again, is just the starter seed for, somewhat like the roadside retail at Mueller - you'll see it's planned to become a positive addition to Austin. Not your Austin. But that doesn't make it wrong. It's a big step in the right direction, over the Arboretum and any other development ever done in North Austin.

In writing editorial endorsements, I think we all have a duty not to assume "my" preferences are the "right" preferences for how to live in Austin.

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> 3. I don't buy the city/RECA/Chamber's warnings of unintended consequences and lawsuits. If I may play the "I've-covered-local-politics-for-a-long-time-card," let me just say that I've covered local politics for a long time and these are the arguments they put forth any time a ballot proposition threatens the money crowd. If anything, the city is very good at negotiating, or coming up with loopholes, to avoid unintended consequences.

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> Let me also say that any time certain city officials, the Chamber and RECA are all on one side of an issue, and people like, say, our advertisers, are on another side of the same issue, I instinctively go with the people who help me pay my physical therapy bills (or whatever I happen to be paying for in an election year).

Instinctively, I agree. That's what makes this one so tough. But the fact is, all those endorsing progs haven't seriously dug into the language of what this amendment actually says, and all of the effects it would have, so far as I can tell. It says a LOT more than "stick it to the Domain."

If this amendment barred only sales and property tax incentives, I'd view it very differently. But that's NOT what it says.

Read the language of the amendment, as written:

It is the intention of this section to restrict the use or expenditure of tax revenues or other resources of the city to provide subsidies, financial benefits or advantages for development of real property that includes one or more Retail Uses.

(1) "Financial Incentive" means: ... (v) a grant of funds.

Austinites need to understand exactly what they are really voting for. And think this through very, very carefully. Do the citizens really want a charter amendment that will invalidate ALL existing city programs to incentivize positive development practices? (If the development includes even one coffee shop?) That means we are scrapping the current Smart Housing program, barring incentives to developers for including locally owned businesses in a project, disabling existing incentives for affordable housing, etc. No city resources whatsover devoted to favoring projects that meet council policy promoting mixed-used development. THAT is an "unintended consequence" indeed.

In addition: There's no way Simon would NOT sue, over being cut off from $25 to $57 million in subsidies, given the legal murkiness of the whole contractual obligation. It would be worth it to them to invest in a legal challenge.

We can't write an endorsement based on what we wish the amendment language said, or how we'd personally interpret it. We have to go by the actual language. I believe the passage above is too vague and broad for us to endorse, in any way.

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> 4. Does the city even have an incentives policy in place? I don't know the answer to that. If passage of Prop. 2 forces the city to rework its agreement with Mueller, who knows -- it may just be an opportunity to craft a better agreement that's more in tune with our economic times. For example, how do you address retail subsidies for a development whose national retail tenants are hanging on by their fingernails? And Shoe Pavilion, for one, is in foreclosure.

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10/8/08 5:10 PM

Michael King:

I'm also not enthusiastic about split opinions in this instance, so I'm going to try to draft an endorsement that everyone can at least give grudging acceptance.

I don't know if I'm that good a rhetorician, but I'll give it a shot.

I hope to circulate some things by tomorrow. We've got a short week, and several people are traveling -- it's going to be difficult to meet our deadlines.

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10/8/08 7:18 PM

Nora Ankrum:

I've changed my mind several times on this thing. For what it's worth, here are my thoughts right now ...

On "Integrity"--Or, At Least Not Shooting Ourselves in the Foot

At first, I felt it was a straightforward matter of integrity: the city can't go around backing out of deals all willy-nilly, bad deal or no--otherwise, its word is just as meaningless on deals we do like as on those we don't, right?

But it seems to me that since the settlement agreement says the city is not obligated to pay, that means that this deal is not the same as other deals and therefore council does have the right and perhaps even a duty not to pay--perhaps not legally, which I'll get to next, but in terms of the city's "integrity," whatever that means.

Ah, Legally

Legally, yeah, passage of Prop 2 could lead to litigation, and the city could lose, and we could end up losing even more money than we would if we just stuck with the crappy agreement we have now. It sounds like that's likely, in fact. And before the meeting with Rodgers and Leffingwell, I thought that was reason enough to vote against Prop 2. I thought that if we lost more money with Prop 2 than we stood to lose to begin with, then we were defeating the purpose of the proposition.

But after the meeting, I realized that the stakes for me had changed. It wasn't about money, it was about establishing a precedent that we don't roll over to developers who screw over our city and our local businesses under the guise of bringing us the benefits of New Urbanism. If Prop 2 doesn't pass and we lose our shirts, it may be worth it just to set the no-rolling-over precedent--and to avoid the alternative: If Prop 2 doesn't pass, not only will it likely deflate the progress and broad support that has built around this issue over the past year, but it will set in stone Austin's collective "who cares?" about how the city strikes deals with developers. That is one unintended consequence I fear.

I guess what I'm saying is that before the meeting, I was worried about the unintended consequences of passing Prop 2. Now, I'm worried about the unintended consequences of not passing it.

I Heart New Urbanism

I'm a fool for New Urbanism and mixed-use development with affordable housing as much as anybody, so despite what I've said so far, I don't think passing Prop 2 is worth losing the ability to encourage those things. The problem is, I'm not entirely convinced yet that it really means losing those things.

As Michael pointed out, "It will be much harder for the city to encourage mixed-use developments, or affordable housing in the same context." But is the "same context" necessary? I have no idea--I don't feel that I have enough information on this point. Both Rodgers and Leffingwell seemed to think that funding could be found through other types of agreements. Jim Walker says he's sure we're all creative enough to come up with some sort of solution. I wish I knew the opinions of other outside experts on this particular point.

Many of you have made persuasive arguments against Prop 2, and I'm not sure my thoughts really add anything to the conversation. But maybe someone has the perfect rebuttal to my email that will help me tip more decisively to one side or the other? That would at least help me sleep soundly at night--because it's all about me!

-Nora

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10/8/08 7:46 PM

Michael King:

I had a lengthy chat yesterday with Jim Walker, of the Mueller Neighborhood Coalition, about the potential effect of the Prop. 2 charter amendment on the Mueller development agreement. (I apologize for not writing sooner; Wednesday intervened.)

In brief, Walker was reluctant to get in the middle of the Prop 2 debate (or rather to put Mueller in the middle of the debate), and he counseled that any arguments coming out from the partisans had to be heard with that understanding. For example, the city's report (at last council meeting) that the amendment will affect the agreement is coming from one side to the dispute, he said, so he's skeptical of that report.

On the other hand, Walker said, "The amendment does affect the Mueller agreement; the question is, the degree to which it affects it." He said he is confident that in the context of the ongoing conversation among the city, the community, and the developers -- and the good relationship among these groups at Mueller -- he is confident that a solution can be worked out that allows the development to proceed on its current path.

When we got down to cases on what actually might happen, he was less certain of actual solutions. For example, when I asked how sales taxes currently contributed to the development under the agreement might somehow be replaced by something else, but not of financial value -- which the amendment seems to ban -- he argued that there are plenty of "creative people" and "creative development lawyers" associated with the project who should be able to find a way to keep the project intact without violating the charter. I asked, for example, about the current attempt to increase density as a way of keeping more affordable housing in the project -- could that be undermined by the loss of the sales tax subsidy, and perhaps become economically unviable? He pointed out that the sales taxes don't go directly into the housing -- which I understood, but didn't see how that alters the question -- and he simply reiterated, that there are plenty of "creative minds" working on the project to find a way to maintain it.

In short, Walker was mainly arguing that Mueller should be kept out of the argument over the proposition as much as possible, and maintain its community process that has been successful (and generally supported) thus far. He redirected the conversation to other projects – notably the Green WTP project – where he said the same problems are likely to recur, and "creative people" need to conceive ways for the city to provide incentives for certain kinds of development that the community wants. Since Tax Increment Financing districts are permitted under the amendment, we concluded perhaps that's solution for at least some projects of a certain size (as we understand it). For smaller projects that include any aspect of retail that the city might want to "buy down" for affordability, for example, it's not at all clear what might be done. At this point, we were reduced to speculating that "there must be a way around" the amendment, which neither of us found a particularly gratifying exercise -- to pass a law but immediately (with the best intentions) trying to find ways to subvert it.

In short, he said, "I don't think anybody really knows" what the unintended affects elsewhere are going to be, and that problem is that right now people are making political assessments (based on their own positions) and not yet practical assessments about what needs to be done. He continues to believe that in the Mueller case, "people of good faith can come together in a community conversation to protect the project."

Overall, Walker acknowledged that the Domain dispute reflects "an erosion of trust between the citizens of Austin and city officials," and that it shouldn't just be a personal argument about people's attitude toward the Domain. "I don't think the charter's the right place for the kind of thing," Walker said. "I want to preserve Mueller, and no one's seeking to get out of it. We don't want to unravel the thing, and nobody's trying to do that, but it's going to take an ongoing community conversation to keep the project going."