The Mayor's Plan to Fix Everything

Mayor Steve Adler will host a press conference Monday (10am, at City Hall) to announce a strategy for revitalizing the city’s most centralized Downtown districts while simultaneously purchasing housing for more than 200 members of the homeless population – all without raising property taxes on city residents.

What else you got in there, mayor? (Photo by the Chronicle Art Staff/Thinkstock)

The plan, covered in part on Wednesday by the Austin Monitor, has since December been discussed as "a possible solution to the Downtown puzzle," but in practice may play out more like a domino chain.

Central to the scheme is a 2% increase to the hotel occupancy tax, which city staff anticipate would lead to a $610 million bump in capital. The city would also create a tourism public improvement district (a designation voted on by the Austin Hotel & Lodging Association that would allow hotels with more than 100 beds to add another 2% tax to every bed) and extend the tax increment financing plan at Waller Creek from 2030 to 2041.

Extending that TIF is expected to bring $110 million in bond money to help expedite the completion of the planned park system along Waller Creek. The TPID, which could be used to fund a swath of improvements in the Downtown area's historic and tourist districts (as well as offset costs for things like police during South by Southwest, etc.), should net the city another $8 million.

But the key player here is the $610 million from the hotel occupancy tax, which will allow the city to pay off its debt on the Convention Center and also fund its expansion over the blocks immediately west of its current footprint, with money left to spend on other area enhancements. (Options being discussed include a purchase of the Palm School, to turn it into a museum, and the renovation of the Mexican American Cultural Center, in addition to more standard improvements.)

Paying off the Convention Center's debt will trigger the creation of a bond that the city would use as another Downtown TIF with $30 million for capital expenses. That money will go toward purchasing housing for the homeless. The city also expects to receive $8 million each year through the TPID that will get earmarked for homeless initiatives like medical services and treatment access. In January, Chronicle staff writer Kevin Curtin explained how the convergence of those living homeless in close proximity to two central entertainment districts is already quite problematic.

$30 million would get allocated toward funding housing for the homeless, with another $8 million allocated annually for various homeless services. (Photo by John Anderson)

On Friday, Ann Howard, the Ending Community Homelessness Coalition's executive director, told the Chronicle that the type of affordable housing the organization seeks for members of the homeless community (small one-bedroom apartments) typically costs about $100,000 per door to purchase. With associated costs, she said she anticipates being able to support housing for 200-224 of the city's most vulnerable homeless living Downtown, though she foresees housing being purchased throughout the city. "The best practice," she said, "is having people living in communities all across the community."

Elsewhere, at Waller Creek Conservancy, CEO Peter Mullan said that he anticipates committing "significant philanthropic support" as a result of the bond money accrued through the TIF, as well as "other private sector support" – the sum of which the city has predicted will match its $110 million. Mullan said the increased funding will accelerate the timeline for renovations to the area, with the entire chain of parks becoming on track for completion within the next decade.

Back in the hotel rooms, raising the HOT tax would escalate that figure from 15% to 17%, the maximum allowed under state law. Of that revenue, 6% goes back to the state, with the remaining 9% earmarked for the city – to use on the Convention Center, historic preservation, tourism enhancements, and a general promotion of the arts. Representatives for the mayor talked like kids in a candy shop Thursday about the potential improvements that could come through that funding. Chapter 351 of the state code, which dictates how most of that money can be spent, allows for what the Chronicle will call "a lot of wiggle room" that may align with Austin's cultural interests.

Adler's pie-in-the-sky plan has been in the works for months, since at least Dec. 22, 2016, when the mayor posted his "Downtown Puzzle" brainstorm to the City Council online forum. The project has revved up in recent weeks. On June 30, the Visitor Impact Task Force posted its final report, recommending many of these ideas as a way to "utilize all hotel occupancy revenue to impact tourism." On July 6, city interim Chief Financial Officer Greg Canally issued a memo to the mayor and members of City Council with financial predictions for each initiative. Asked Thursday about potential negative outcomes of the city using a hotel occupancy tax to fund improvements throughout the city, Adler's spokesperson Jason Stanford reminded the Chronicle that our heartless president fancies himself a hotel mogul.

"If Trump were to build a hotel here, we'd actually be rooting for him," said Stanford. "Because it would help the homeless – which would probably be the only time he ever helps the homeless."

Stanford said Council expects to put forth a resolution in August to sort out which ordinances are required to set the plan into motion. Once that happens, the first domino topples forward.