Council approves spending $15 million on the Convention Center Hotel; City Manager Jesus Garza presents the Draft Policy Budget; and Roma Design Group announces its vision for the south shore of Town Lake.
Council members swallowed hard Thursday and did what any reasonable soul would do, what must be done, what only a pack of provincial yokels wouldn't do -- further downtown development and boost the tourist trade by signing off on the new Convention Center hotel project. There was no sense fighting it, and no one did.
True, the city has been asked to ante up $15 million, when the $220 million project was originally supposed to require no city investment; and it'll have to buck up another $5 million for a parking garage and slog through a contentious eminent domain proceeding. But other cities are spending so much more on downtown hotels. Look at Denver; look at Houston: $55 million and up, and unlike Austin they won't own their hotels when the loans are paid off. Council Member Beverly Griffith wanted guarantees that the city's upfront money wouldn't disappear down a rabbit hole (sorry, we aren't in that position, said Assistant City Manager Jim Smith), and Daryl Slusher wanted to know how soon the hotel could contribute to the city's general fund. But there was never any doubt that this deal had to happen because, well, the conventioneers are knocking at the gates.
Attorneys and architects say that $15 million for an 800-room hotel is a can't-miss deal. Under the arrangement, the city -- acting through the nonprofit Austin Convention Enterprises Inc. -- will sell tax-exempt bonds to East Coast banking concerns to cover construction costs, which will be paid back through hotel revenues. Those revenues will first pay interest and principal on the loan, then cover operating expenses, then flow into a reserve fund (used for repairs, additions, and other contingencies), and then, finally, land in the surprisingly euphemism-free "bottom fund" -- which, when full to overflowing, will spill into the city coffers.
In other words, the city gets paid when all the buckets stacked above it are full -- perhaps in 10 years. Surely, council members calculated, that's the kind of long-range investment the city needs to make, both in terms of working-class jobs, and revenue streams that fund city services. They may be right, one council aide mused after the vote; but then again, maybe it's just another paean to trickle-down economics, promising a payoff that will never materialize. (For more analysis of the deal, see "Impulse Buying".)
On the Drafting Table
It helps to keep that $15 million figure in mind when sizing up City Manager Jesus Garza's draft policy budget -- officially presented Thursday -- which touts sustainability initiatives as among the city's primary goals. Noting that economic disparity and insufficient infrastructure threaten to undermine the city's growth, Garza has recommended placing $14.7 million into a special "Sustainability Fund" to pay for ... affordable housing? Workforce development? Well, yes, those too, but mostly to pay for road improvements. Social equity initiatives created by the council last year will be continued, with about $2 million going to pay for workforce programs, $1.5 million for child care, and $1 million for the housing trust fund.
The policy budget, essentially a starting point for negotiations leading up to the real city budget due later this summer, also suggests $4 million for an Economic Development Fund to aid redevelopment strategy and help high-tech companies locate here. Parks and police comprise most new expenditures, and the only proposed tax hike is a one-penny-per-$100 valuation property tax increase to pay off bonds approved by voters in 1998.
We Have Our Limits
The Roma Design Group presented their vision of the south shore of Town Lake, and (surprise, surprise) recommended that buildings near the waterfront be held to no more than 60 feet, which could spell trouble for the proposed 120-foot Gotham Condominium project on South Congress. However, the report also says that developments in the zone surrounding the Gotham site may go as high as 120 feet if proper setbacks from Congress and the shore are observed, and if area landowners collaborate to create better access from Barton Springs Road. The Roma plan also allows an exception for the imminent 96-foot building proposed by the Austin American-Statesman across Congress from the Gotham.
Roma Design Group was also hired Thursday to come up with a proposal for the redevelopment of the Rainey Street neighborhood and the Seaholm Power Plant.
This Month in Council
The June 30 meeting was the council's last for a while, as the newly seated council takes July off to gird up for the coming budget season, plus the usual docket of issues large and small that will have piled up by their next meeting on Aug. 3.