Your Tax Dollars at Play
The Rosewood Entertainment Center
"It's the beginning of rebuilding the community, of bringing businesses and jobs back, and giving kids another alternative besides hanging out in the streets," says 25-year-old Christopher Smith, a member of For the Youth, By the Youth, a city-initiated group created two and a half years ago to provide community involvement in the center's creation.
But community resurrection doesn't come cheap. The start-up costs - to turn an abandoned, boarded-up grocery store at 2334 Rosewood into the entertainment center by next autumn - will be $9.6 million. On June 22, the city council, with Max Nofziger abstaining and Brigid Shea in Minnesota, agreed to secure most of that funding in the form of an $8.8 million loan from the U.S. Department of Housing and Urban Development. The city already spent the other $800,000 from the general fund for land acquisition, a financial assessment of the project, and design work for the center.
Shea and Nofziger, however, fear that the center could become a money pit, stealing funds away from social needs that are more pressing than entertainment. A $54,000 profitability study completed by the Austin-based M. Crane & Associates on May 31 shows that in a best-case scenario, the center will make no more than $150,000 per year. But that takes into account neither the $880,000 annual debt service for the next 20 years nor the $200,000 per annum capital costs (the city will pay for everything, right down to the bowling shoes).
Half of that debt service will come from the city's general fund, as will the capital expenses. "Where is entertainment on our list of priorities?" asked Nofziger after the vote. "Funding for 47 police officers is not included in this proposed budget. This $440,000 is."
The other half of the debt service will be paid for out of the city's increasingly unstable allotment of Community Development Block Grants (CDBG), an average of $440,000 a year in HUD money normally reserved for low-income housing. Each $440,000 CDBG installment could have amounted to down-payment assistance for 298 potential homeowners next year. Moreover, this puts the city's entire CDBG allocation at stake, since the funds will serve as collateral to secure the HUD loan. Meanwhile, at the federal level, the Senate has proposed a 50% cut in CDBG funds, the House a 20% cut.
"Since we live in a time of increasing need and diminishing resources out of Washington, with the potential of HUD going down the drain all together, I think CDBG money should be allocated for the greatest need," says Raymond Rabold, Jackie Goodman's appointee to the Community Development Commission, which last year voted against repaying the loan with CDBGs. "Nobody [on the commission] feels they don't want to see [Rosewood] happen, but how do you tell people, `I'm sorry, you've got to live in the street, we've got to pay off Rosewood'?"
But Eric Mitchell, the project's shepherd, says the M. Crane study is overly conservative, and expects the center to recoup expenses, perhaps even the debt service. Mitchell says the project will provide a sense of community, provide disadvantaged youths with jobs (approximately 20, according to former project manager Leon Barba), and most of the city's youth with an entertaining alternative to hanging out on the streets. "This will tell the community that we've neglected that we're gonna take a chance on you, just like we have everywhere else in Austin," Mitchell said from the dais on June 22.
Councilmembers Gus Garcia, Ronney Reynolds, and Jackie Goodman also expect the center to be more popular than the study estimates. To enhance its draw, the prices will be the cheapest in town. According to the city's loan application, roller skating will cost $3; other rinks charge $4 to $5 for weekend skating. The bowling alley will also cost $3 for all-day bowling, versus about $2 per game at other alleys. A movie will cost $2. Food prices will be bridled to ensure affordability. Also in the center's favor is that fact that the nearest rolling rink is more than four miles away, and the nearest bowling alley more than seven miles away. Depending on how well the project is designed, built, and operated, they say, it could attract families citywide.
For Goodman, the design is key. "If it just looks like a made-over shopping center, I don't think people will go." She adds that besides aesthetics, the design could help augment safety - a commonly cited concern for participants in the survey - by eliminating dark corners or alleys.
At a cost of $197,000 a year, the Parks and Recreation Department is in charge of operating and maintaining the center with 16 parks personnel, while contracting out with each entertainment vendor. Under this scenario, according to a 10-year estimate in the M. Crane study, the city's income will reach a high of $147,000 by year four, then slowly decrease for the next six years. If debt service and capital costs are included, the center in this scenario will lose at least $933,000 per year.
Under a scenario favored by Garcia, the city would hire a general contractor to operate and maintain the center, and according to the study, do slightly worse. In this case, the city would lose $13,000 to $20,000 per year for the next 10 years. Including capital costs and debt service, the city could lose roughly $1.1 million per year.
Garcia thinks making the private sector build and operate the facility will make it more community-oriented, and thus attractive, to local residents. "If we do it in this format, it has the chance to make cash-flow positive enough to cover debt service. I fundamentally believe that if we do it right, it will make money. We would want this to be a joint venture of hopefully an African-American, a Mexican-American, and an Anglo." That way, he adds, "it's not going to attract just African-Americans. It'll attract Mexican-Americans and even whites. What's wrong with having `la diferencia'?"
Garcia admits, however, that "la diferencia" has been hard to come by. "Quite frankly, the Hispanic community has not expressed a lot of interest in it." In fact, surprisingly few investors seem interested, despite the low-risk, low-cost investment: M. Crane estimates that bowling, skating, food court, and movie vendors will take in more than $100,000 per year.
Assistant City Manager Oscar Rodriguez says his office has received a few inquiries for vendor information, but nothing serious. Garcia knows of one interested party, but won't say who. Other city staff say they don't know of any. Mitchell isn't talking to the press.
"There should be a mix of public and private sector money," says Goodman aide Robald. "For any neighborhood that is going to benefit, there ought to be people in the local area who have the resources to make it work, but there's not one company out there that has offered any resources whatsoever. If Rosewood is to do all the things it's supposed to do to work, it should have community resources behind it. When the community has something at stake, there's a lot more participation in the project."
Residents around the proposed center concur wholeheartedly. Wayne Paint, a 35-year-old resident two blocks from the center, says "Don't take the money out and give it to the white folks. We got plenty of black and Hispanics who need the money. You've got to live within the community."
While the questions of who, how, and how much await answers, one thing, as
Reynolds says, is certain:
"The project will be built." Goodman agrees. Since the community was promised a center two and a half years ago, shortly after 17-year old Tamika Ross was gunned down when hanging out with children in a parking lot, "it's especially important that this one is approved."
Nonetheless, Shea, who says she "might have abstained from the vote" had she been present at the meeting, says the council should look for alternatives to the center. "There's been a real cowardice to ask fundamental questions like, `Why are we proceeding to build yet another building adjacent to other recreation facilities when our own city audit department has concluded that those existing facilities are underutilized and badly programmed?'"
Shea suggests that the Givens and Rosewood recreation centers, both within walking distance from the proposed center, should begin offering family entertainment, like movie nights, to help keep youth off the streets. "Some people have said `That's a very good idea,' and other people have said, `You're a racist jerk and you don't ever want to do anything in East Austin,' which is a really stupid reaction," she says. "People have been bullied into not even being able to ask basic, fundamental prudence questions."
Smith counters that the rounds of price squabbling miss the point. "To me, if you focus on the death of the children, you can't put a price on their lives. There's a possibility that if Tamika Ross had something else to do, she may not have been killed. She was hanging out, sitting out in a parking lot of a church and a youth center that was abandoned. Maybe if it was open, and she had been inside, she wouldn't have been killed."