Prepare for Departure
Mueller Redevelopment Plan Inches Toward Council Approval
On paper, it looks like a beautiful baby: a showpiece, cutting-edge inner-city redevelopment project that increases the tax base, enriches the neighborhoods around it, and puts flesh on the bones of Smart Growth. But now, after 15 years of gestation, comes the fun part: How are we going to build the New Mueller? And so begins the next chapter in the long, twisting, turning tale of the death and transfiguration of Robert Mueller Municipal Airport. A generation has now been spent on the planning and politics of the New Mueller -- beginning with a neighborhood-based vision in 1985, the basic tenets of which are today called New Urbanism and Smart Growth and have been preserved ever since in the city's Mueller plans, because those same neighborhoods have remained at the table.
But that is really all prologue; we still have decades to go before Mueller is fully redeveloped. Yet the course of those decades will be determined, in one fell swoop, by one vote this City Council will take during its tenure: cutting a deal with a master developer to implement the city's adopted Mueller redevelopment plan. (Right now, we don't yet have an adopted plan, or an official decision to seek a master developer, but both seem inevitable, in the absence of a very good Plan B.)
As you know, this council, or should we say this mayor, has plenty of experience cutting deals. And there's already been a public fracas over a potential Mueller development deal with Stratus Properties -- based on a Mueller-for-Barton-Creek land swap -- since nobody really knows yet what we're looking for in a Mueller marriage partner.
The city has never done a project like this before, and doesn't have all that many models to follow. So a whole bunch of power and responsibility, not just for Mueller's 711 acres but for much of Central and East Austin, will reside in the hands of whatever private-sector partner, or partners, marry up with the city to raise the New Mueller to adulthood. We know what we want Mueller to be when it grows up. Now would be a good time to think about what we want from that future spouse.
Where we are now: After several delays of various origins, it now appears that the City Council will in August be presented by its appointed consultants, Roma Design Group of San Francisco, with a final draft of the RMMA Redevelopment and Reuse Plan. The council will then mull it over, or more accurately, put it aside while it fusses over the 2000-01 city budget, and then adopt it in September.
The Genuine Draft
This is version 2.0 of the New Mueller plan; the first round, presented in March 1999, included a 282-acre state of Texas office complex nestled uncomfortably within the Mueller site. But the state, which has for years made a sport of screwing with the city's Mueller plans, backed out and bounced Roma, the city, and the neighbors -- now organized, albeit loosely, as the Mueller Neighborhoods Coalition, or MNC -- back to the drawing board. (Along the way, two specific projects got worked into the plan: a new emergency communications center and the Austin Film Society's conversion of old hangars into a soundstage complex.)
The New New Mueller hasn't really changed that much (see map, p.26, for the latest version of the plan), and it's mostly for the better: Free from the state's constraints, this is a more genuinely mixed-use, walkable, sustainable urban village. These SmartGrown attributes, exotic flora when the old Citizens for Airport Relocation (CARE) first alluded to them in 1985, are now common garden crops, copped by even the squarest suburban homebuilders (in our market, Bill Milburn and David Weekley) for their "neo-traditional" neighborhoods. Even in the three years since Roma got here, public reaction to New Mueller's features -- small-lot homes, apartments over shops, combined live-work units -- has gone from "What in the hell is that?" to "Can I buy one?"
So the plan itself is pretty mainstream. But getting someone -- especially someone in Texas -- to actually build out your 711 acres of unusual and valuable city property, and in the process respect your well-defined and oft-repeated citywide and project-specific goals (affordability, sustainability, diversity, et cetera), is not an off-the-shelf task. Part of the Roma team's job -- actually being handled by Berkeley-based Economic and Planning Systems (EPS) -- is to give Austin advice on implementing the plan.
When the state was still playing, EPS recommended an independent corporation -- a joint venture, in effect, between city, state, private sector, and community -- to acquire and develop the New Mueller. Such a corporation would need money, to build out Mueller's infrastructure and negotiate real-world development deals, and those funds would have come from the state's purchase of its 282 acres. With that option now gone, the Roma team is all but certain to recommend that the city solicit proposals from potential master developers, who could then in turn partner with smaller subdevelopers to build out the plan's various pieces in a way that meets the city and community's Smart Growth goals.
Does the city know how to do that? Well, no. "We'd expect to send out an RFQ or RFP," says Dave Kreider, the city's Mueller project manager (within the recently created Office of Redevelopment Services), referring to the standard tools of public-private dealmaking, the "request for qualifications" and "request for proposals."
"But we don't really know what the content of an RFQ or RFP would be," Kreider continues, "and it will take time to figure out, because we do have a lot of community concerns. For example, we have the affordable-housing goal [25% of Mueller's 3,500-plus housing units] and other things that we'll work into whatever solicitation we send out. That's what we'd look for in any proposal -- how well the developer responds to those community concerns."
Trust but verify, say the neighbors in the MNC, from whose years of input and involvement many of these community concerns sprang. After all, the mayor and city manager felt no shame in exploring a Mueller deal with Stratus -- the Moffett-free successor to the reviled FM Properties -- which has zero experience at affordable, diverse, sustainable, neighborhood-friendly mixed-use development. (One might say less than zero, looking at Stratus' portfolio in Barton Creek, Lantana, and Circle C Ranch.) So the city's deep and unwavering commitment to its lofty Mueller goals has yet to be demonstrated in practice, and the neighbors want citizen oversight to dampen any further outbreaks of senselessness.
The 1996 RMMA Process and Goals Task Force, which laid the groundwork for the Roma effort, was made up largely of Mueller neighbors, and it called for a "semi-autonomous management entity" -- basically the same sort of nonprofit corporation first recommended by Roma -- that would be accountable to the city but not hostage to its leaders' political needs and whims, of which the Stratus episode is a prime example. Now that a master-developer strategy seems likely, "I think [it's] a good idea if there is also a citizens oversight entity," says local architect and Mueller neighbor Girard Kinney, who chaired the Task Force.
On June 8, the City Council created an RMMA Implementation Commission that is intended to fulfill that role, but it's a standard-issue city board, by definition not independent of the City Council that it's supposed to oversee. "All along, from the task force in 1996 until last month, we've been trying to get the oversight entity as politically removed from the council, and as independent, as possible," says Windsor Park neighborhood leader Rick Krivoniak, who served on the Task Force and who now chairs the RMMA Redevelopment Advisory Group, which goes out of business once the city adopts the Roma plan.
"If we'd been able to work on that earlier, that may have happened," Krivoniak continues, "but things don't move that fast in this town, and a commission is about as good as it's going to get." The Implementation Commission's effectiveness "depends on who's on [it] and how much they're willing to do -- the personalities that are on that will make a huge difference." The appointments were due to be made on Thursday, June 29, and MNC leaders are looking for high-profile civic leaders to give some weight to the board and its mandate.
Presumably, the commission will have some input on how the city staff is going to translate the community-oriented Mueller goals into measurable "performance criteria" that a master developer can be bound to. "I keep being told by city staff that [those] criteria need to be written into the contract, and that developers need to be made aware of them in the RFQ," says Krivoniak. "I'm hoping they'll put numbers to how much affordable housing, how many jobs, how many local businesses will be in the retail space, what kind of incentives the city can offer to employers whose workers live close by."
Now, despite the citywide rolling of eyes, it is possible that someone like Stratus could meet such goals and build the New Mueller the city says it wants. But not bloody likely, and even less likely that Stratus -- or, for that matter, damn near any local developer -- would be the best for the job. "I am not opposed, nor do I think is MNC, to transfers of development rights to RMMA," notes Kinney, referring to a potential land swap. "But this should be at the sub-developer level; the master developer should be a national or international firm that has done this before."
Wanted: Master Developer
What "this" is -- the actual job description of a master developer -- will probably depend on what respondents to an RFQ are willing to do. But we're probably looking at some big-deal national firm who would coordinate getting infrastructure into the site, breaking Mueller into parcels, and disposing of them to local sub-developers who would do the Town Center retail buildings, or the small-lot homes, or whatever they do best.
"I think that would be a better approach than trying to find one super-developer who does it all," says local developer Philip Capron, who chairs the Austin district council of the Urban Land Institute, the professional association for developers who do this sort of thing. "Rarely is someone excellent at both zero-lot-line homes and big office buildings. You need a conductor, but then you can get the best people to play the instruments in the orchestra. And it would be a more democratic approach, since no local developer has done a big project of this sort."
There are quite a few national firms, however, who would sell their souls (no developer jokes, please) to work on a high-profile project in a suddenly hot real estate market, and who have the chops to handle Mueller. Most, to be sure, have not worked on projects quite as big as Mueller -- 3,500 homes, 300,000 square feet of retail/commercial space, 2 million square feet of office space, 74 acres of green space -- because there haven't been that many; your typical neo-trad urban village project is around 100 to 200 acres, not 700. (The maximum size for a project under Austin's own Traditional Neighborhood District ordinance is 250 acres.)
But the closest national precedent to Mueller, Denver's defunct Stapleton Airport, covers more than 4,700 acres, and its redevelopment plan -- which hews to the same SmartGrown goals as Mueller's -- calls for eight separate urban villages. And while the Stapleton project has been plagued with many troubles, finding interested developers was not one of them. (The Stapleton Development Corporation went with Cleveland-based Forest City, one of America's largest real estate firms, but absent from Texas markets. But the other three firms on Stapleton's short list -- Catellus, Jones Lang LaSalle, and Westbrook Partners -- all have plenty of Texas properties, though no Austin properties, in their portfolios.)
So a Mueller RFP would likely be a widely requested document. Negotiating an actual contract will doubtlessly be long and painful -- it took Stapleton and Forest City 15 months to put ink to paper -- and may be made more so by the City Council's will. One of the problems that dragged on Stapleton was that, since the airport had been built with federal funds, the Feds ruled that all land sales had to be at fair market value, and proceeds from the sales had to go to pay down the debt of Denver's new and very expensive airport. This made it difficult for the SDC to either offer discounts as incentives to developers (for things like affordable housing) or to put project revenues into infrastructure, which is one reason the corporation -- created to be the master developer, as the Process and Goals Task Force envisioned happening at Mueller -- threw up its hands and found a private-sector partner.
We have avoided this fate, thanks to a 1997 agreement with the Feds that allowed Mueller, as an asset, to be taken off the books of the city Aviation Department and transferred to the General Fund, a deal for which Council Members Daryl Slusher and Beverly Griffith have each taken ample credit during their tenure. The downside of this is that Mueller redevelopment revenues would also go into the General Fund, and be used to pay for your parks and libraries and fire trucks and street repair, instead of staying at Mueller to pay for infrastructure needed there. The latest wrinkle is the call, by Griffith among others, for the city to lease, rather than sell, Mueller parcels (except for the single-family homes) to developers, and thus provide ongoing cash flow to the city.
"I think it's definitely doable with leases, but it's not a very good long-term viable option," says Capron. "As time goes by and the lease burns down, and as that property gets old and tired and needs to be renovated, then lenders don't want to lend because the lease is going to explode. And many lenders will charge higher interest rates for a ground lease. The issue is whether the city would grant as long of a ground lease as is necessary to make the financing work. Right now, [the difference] might only be a [percentage] point. But this is a long buildout, and with the ups and downs of the local and global economy, when capital is more scarce and lenders are more conservative, if they have a choice between fee-simple [i.e., a straight sale] in Jacksonville or this long-term ground lease in Austin, they'll take the first one."
And, as developers keep telling the city, if we really want affordable housing, or any other kind of non-market-dependent development, at the ratios desired at Mueller -- 25% of all units -- the city is going to have to put some skin in that game. Presumably, an RFP or final contract that includes community-oriented performance criteria could reward developers, financially, for meeting our high standards, rather than just threatening dire consequences should they fail.
"It's going to be harder to get the first developers out of the chute to build [in] a mixed-use neighborhood in transition," says Capron. "The first 100 zero-lot-line houses might require some sort of subsidy of the city that goes beyond waiving building permit fees. That's the biggest challenge." An alternative would be for a nonprofit community housing developer (a CHODO, in Fedspeak) to use federal funds, and perhaps other monies, to handle the affordable-housing component at Mueller. Some MNC members think such a nonprofit could be spun off from the coalition.
Right now, MNC organizer, spokesman, and de facto leader Jim Walker is trying to find ways the Mueller neighbors can convey their goals for the project directly to developers, rather than through the complicated channels of city officialdom. (The MNC is looking at holding a forum in late July.) "If neighborhoods and developers can talk to each other before there's a crisis on the table, it'll be a great precedent. And the development community is very resourceful -- they just want to know what the rules and parameters are, and they'll find a way to make a profit. We think, and certainly hope, that the quality issues we want to be part of Mueller are not obstacles to profit. But we'd feel better if we can express that to developers directly."
For their part, developers already feel better, Capron speculates, about going into a project that's already been forged in a public process. "The fact that it's a coordinated master plan, and that the city's behind it -- not just staff, but the mayor and council as a political issue -- opens it up to a lot more developers. A project where you can go in wearing the white hat is a lot more appealing, and more people want to be part of it. The end result of the plan may not be exactly what I would've done on this site, but I'd rather have something that was supported by the neighbors and politicians. It'll move faster, attract higher quality, and be a more positive experience for everybody. It's win, win, win, win."
Contact Mike Clark-Madison at email@example.com.