Georgetown Smackdown

Suburbanites wrestle over managed growth, Smart Growth -- and 'Stupid Growth'

The Georgetown City Council
The Georgetown City Council (Photo By Jana Birchum)

It's just after 10am on Monday, July 30, and the Georgetown City Council chambers are thick with tension. The seven council members and Mayor MaryEllen Kersch are on the dais. Several council members look pinched -- visibly uncomfortable, fidgeting in their chairs. The gallery is hardly full, about 20 people -- mostly local developers and landowners with a few activists thrown in -- occupying the rows of neatly lined chairs. But those who are here are all fuming: eyes rolling, snickering hardly contained.

This morning the council has gathered for an "emergency" session aimed at immediate passage of an interim commercial development ordinance that would, among other things, severely limit the amount of development allowed on commercial parcels, and require developers to pay for all traffic mitigation upgrades on the roads surrounding proposed developments. Significantly, the notice for the meeting was posted Friday at 9:59am -- one minute before the Texas Open Meetings Act deadline -- and conveniently beyond the deadline for any notice to run in the Williamson County Sun's Saturday edition. So very few citizens were even aware the measures were on the agenda.

And although none of the City Council members nor the mayor are willing to admit this from the dais, everyone else in the room appears convinced that the "emergency" ordinance is a directly targeted attempt to prevent any impending commercial development on a single tract of land: a 212-acre parcel known as "the Rivery Tract" that sits just off the frontage road on the west side of I-35, and just north of the San Gabriel River in the heart of Georgetown.

No Stupidity Allowed?

The meeting is only the latest chapter in a political drama unfolding in Georgetown over the past two years. In the 1999, 2000, and 2001 elections, control of the mayor's office and the City Council completely changed hands, save for one veteran member. The current council and its allies -- under the slogan of "managed growth" -- ousted the incumbent council, which they successfully labeled as pro-growth at any cost. "It has to do with the fact that for so long there was no control [of growth]," Mayor Kersch said. "If it's a choice between generating revenue in order to generate revenue -- if we have to brutalize the quality of life [of Georgetown for money], we'll give up the revenue." Kersch's council ally Sam Pfiester calls the current council's approach to development one of "managed growth, or what I like to call 'Please, No Stupid Growth.'" In large part, the council is opposed to offering incentives to businesses to get them to come to Georgetown -- in the manner that Austin has over the past several years -- preferring instead an approach that would woo potential business development solely with Georgetown's quality of life. Council members are also explicitly opposed to "big box" retailers like Wal-Mart and Home Depot which, they say, have a habit of coming in and then moving whenever a better site becomes available -- leaving big, ugly, and empty buildings in their wake. "Look what happened when Wal-Mart pulled up stakes on North Lamar," said Council Member Ken Evans. "Tell me that's a nice looking area. You ever seen pictures of Queens, New York?"

Others in the city -- past council members, developers, and community activists among them -- believe that the current council's motivations are less than pure. "It's the idea that we have a City Council that is committed to killing any community development which would bring tax money to Georgetown," said Mike Sheffield, president of the Austin Police Association and one of the co-founders of Citizens for Georgetown, a grassroots political action committee formed in 1999. "And this is really about how your community works, and it can't be based on money just from residential taxes, unless you're West Lake. It just don't work that way in Georgetown."

Downtown Georgetown -- <i>not </i>Queens, New York
Downtown Georgetown -- not Queens, New York (Photo By Jana Birchum)

Indeed, since the current council took charge, economic development in Georgetown, with a population of about 23,000, has all but ground to a halt, with projects that had been initiated by the former council and city manager wholly dismantled. "They keep tearing things up and saying the others were bad," said former Council Member Susan Hoyt. "If you notice, everything's been torn down and nothing's been built."

And the tearing down may be taking its toll. The city is now facing a major budget shortfall and, in an effort to balance the nearly $17 million budget, numerous social service programs have been readied for the chopping block. Yet current council members are convinced that by protecting Georgetown's quaint quality of life, the city will be insulated from any harm -- chiefly from "the wrong kind" of major retail and industrial development. "If you build the right quality of life and the right population, with an educated workforce, you'll have the right kind of development," said Mayor Pro Tem Clark Lyda. "You don't have to grow and get crappier, I don't think."

In short, the story of Georgetown's political present is one of sniping political warfare and an ideological battle over how to manage growth in a city that is going to grow whether residents -- and city officials -- like it or not.

Wipeout at the Water Park

If it weren't for an earlier proposal to build a water park just south of Georgetown, it is possible that neither the current council members nor the current mayor would be at the helm of the city's government. In 1992, the city's Convention and Visitors Bureau, along with the Georgetown Industrial Foundation -- which held a contract with the city to serve as a liaison for local economic development -- were kicking around an idea to build a water park on the south edge of town, something akin to the extremely successful Schlitterbahn water park in New Braunfels. "We'd been looking at it since 1992, but there needed to be a funding mechanism," said Bruce Barton, former director of the GIF and also a member of the Citizens for Georgetown PAC. What they came up with, Barton said, was the use of municipal bonds leveraged by the city's 4B corporation. "The 4B corporation sells bonds at an interest rate based on the prospective project. The city is not liable in any form or fashion whether [the bonds] do good or bad," Barton said. "They are only sold to sophisticated investors, who know that they may be very speculative."

Past council members said they supported the park because of the potential tax revenue windfall it would bring, not just through the park itself but through associated businesses it would attract, and the jobs and recreation it would provide for the younger citizens of Georgetown. "Yes, it was a seasonal project, but it would bring economic development around that area," said former Council Member Shelley Davis (now district director for State Sen. Rodney Ellis), who lost his council seat to Lyda in 1999. "I saw it as something that was going to help our economic development."

By the 1999 elections, the water park deal was under a harsh spotlight, morphing from a proposed project to enhance economic opportunity and community recreation into a theme-park symbol of what the current council members consider "bad growth." Kersch, a local real estate agent and former school teacher who wrote a book titled How to Fight City Hall, says the water park proposal was the reason she decided to run for mayor in the first place. And current Council Members Clark Lyda, Sam Pfiester, and Ken Evans all agree that they had been concerned about how the city was developing prior to 1999, but that the water park deal was what motivated them to actually run for city office. "The straw that broke the camel's back was the water park thing," Kersch said.

The explicit issue was the use of the 4B corporation bonds, which would've helped finance the infrastructure required to build the park. The 4B corporation "could've been used for a good purpose, but instead they wanted to use it for the water park," Kersch said. "There was no good reason to think it would've been a positive venture." In addition to the controversy over the use of the 4B funds -- which current council members considered nothing more than an economic scam foisted on local taxpayers -- there was also a negative reaction to the aesthetics of the project. Sam Pfiester says he didn't like the idea of a water park as "the gateway to our city." Council Member Ken Evans agrees. "It would produce lots of jobs for the high schoolers for one or two years, and then the excitement dies down and you are left with a rusting hulk outside the gateway to your city," Evans said. "It's just a rusting hulk of a burned-out deal."

Georgetown Mayor MaryEllen Kersch
Georgetown Mayor MaryEllen Kersch (Photo By Jana Birchum)

Others in the city are convinced that the water park conundrum was really less about the 4B financing (as was presented to the voters), and more about this council's elitist attitudes toward city development -- attitudes that they say are running the city into a black hole where no economic development can thrive. "The real big deal is you have a group of people who -- and they've told me this -- they don't want 'that' kind of development," said Bruce Barton. "They want this to be a small town and they don't want -- and I quote a current council member that actually said this during meetings about this stuff -- they don't want 'Mexican, food-stamp, Wal-Mart kids in this town.' I've never forgotten that and I never will as long as I live. It still gives me goose bumps."

The water park battle -- effectively won by the current council members in the 1999 election -- served to redefine Georgetown's direction. That direction is now primarily defined by aesthetics, quality of life, restrictive development -- and a very, very tight budget.

A Rivery Runs Through It

Shortly after Mayor Kersch and Council Member Lyda were elected in 1999, the battle lines over growth began to appear. Lyda felt that the reason he and Kersch (along with five other new council members elected in 2000 and 2001) won their races was because Georgetown's citizens want their officials to update the development ordinances to ensure quality growth in the city. "Our development ordinances and zoning ordinances are nearly 30 years old," said Lyda, a local developer with extensive area land holdings, who once owned the land where Del Webb's Sun City Georgetown now sits. "We need that new base-line land use planning." As such, the council began looking at development plans already in the pipeline with new eyes.

The biggest and most important of these was the Rivery deal.

For over a year, the 212-acre tract of land, just off the western frontage road of I-35, had been the focus of development negotiations between the city and Dallas-based Quorum Equities Group LLC, which wanted to build large-scale retail business and multifamily housing on the tract -- a development in theory akin to Round Rock's La Frontera shopping area or North Austin's Arboretum. As originally planned, the development would benefit from monies secured for the city through a Texas Capitol Fund grant, which would help build the roads into and out of the heavily wooded land bordered by the San Gabriel River and Williams Drive.

But the debate deadlocked over who would pay the cost of road improvements around the land -- and that ultimately killed the deal. "[The Rivery tract has] always had the same infrastructure problems: one way in, one way out onto a two-lane frontage road," Pfiester said. "So we were working with [the developers] on a development agreement. Under the existing ordinances, he only has to pay for the roads on the site. But because of the location of the property you have a transportation problem." Indeed, because of the location -- bounded by city parkland to the south, the two-lane I-35 frontage road that bridges the river to the east, and the already congested main artery road, Williams Drive, to the north, any intensive development of the site would cause some potentially sticky transportation problems. After several Transportation Impact Assessments, the cost of upgrading the roads around the Rivery property was estimated at $11 million. Even so, the TIAs predicted, the congestion at the Williams Drive and I-35 intersection was still going to be a problem. "The struggle we have is that you can put all the construction on that you can, and it still is a traffic problem," Pfiester said. "Proponents say the sales tax revenue will pay for it. I ask, would we rather pull that $11 million out and put it somewhere else?"

Neither Jeff Johnston, president of Quorum Partners, nor Greg Hall, a local developer involved with the deal, returned phone calls from the Chronicle requesting comment. But former city officials say the Rivery developers were willing to put almost $3 million in additional money toward fixing the existing traffic problems around the proposed development. "Usually your tax dollars are supposed to do this stuff," said former Council Member Susan Hoyt, who left office this spring. "But in working together, the city could get them to participate in some of the other costs at that intersection over there. Whether the Rivery is there or not, that intersection is graded an F." In the end, Hoyt said, the new council was pushing for the developers to bear too much of the financial burden for fixing an intersection the city already knew had, and would continue to have, problems. "The developer felt like a tennis ball," she said. "They kept changing the rules. It was, 'If they'll go this then they'll go that,' and they kept asking for more and more. They had this thing in the loop forever."

Council and developers deadlocked over the Rivery Tract
Council and developers deadlocked over the Rivery Tract

Other city insiders are not as charitable as Hoyt. "We're sitting on one of the busiest highways in the country, and they use as one of their excuses that this will increase traffic in the city? This is I-35, the traffic is already there," said Mike Sheffield. "They've killed every development deal that has tried to go in up here, and there go our tax dollars, southbound on I-35 to La Frontera and the Arboretum."

Negotiations completely broke off in early June, when the Quorum partners finally pulled out of the deal. "I just cannot keep going indefinitely here and not doing anything," partner Eric Brauss told the Austin American-Statesman on June 12. "It's sad for us because we've got a major investment in Georgetown. We're just going to put the property up for sale again." The Statesman reported that in a letter to the city ending the deal, Quorum partner John Weber wrote, "It has become abundantly clear that the Georgetown City Council and its mayor are unable to come to a conclusion as to the terms and conditions of the agreement."

In the wake of the decision, a new rumor flew through the town: Quorum was going to sell the property directly to "big box" corporations like Wal-Mart and Home Depot -- intended as primary anchor tenants in the Rivery deal as originally proposed. That outcome was a notion the current council members detested. "The rumors were rampant that they were going to be selling pad sites," said Council Member Lyda. "It's a bad situation." Some city insiders said they thought it was a fitting end to a deal city officials had tried so brutally to manipulate. "So they'll get these two big boxes in there that will build their own little roads going into them," said a source close to the city. "It is exactly what the city didn't want, and it's going to happen in spite of them. And I think it's justice."

It was on the heels of these rumors that the council and mayor made their most recent move, the "emergency" development ordinance meeting on July 30. This time, however, the outcome looks less like "managed growth" -- and more like "no growth."


Despite all the recent wrangling over commercial development, the topic of the Monday morning emergency meeting came as a shock to those in attendance. Developers, landowners, and community activists alike bristled with irritation. They had barely any time to review the ordinance the council was proposing, they said, and they were deeply concerned that the measures would effectively halt all commercial development in Georgetown. Indeed, the 45-page ordinance sets out a number of detailed restrictions. Chief among them are limits on the amount of impervious cover, a requirement that developers whose projects would generate more than 2,000 total trips per day would have to pay for Traffic Impact Assessments -- and for any traffic mitigation requirements the assessments identify. Further, developers must conduct a tree survey and protection plan, protecting any trees with a diameter of six inches or more. Moreover, the "emergency" status of the measure eliminated the standard two public readings of the ordinance, normally required 10 days apart to allow public comment before the rules are approved, revised, or discarded.

"This is not the open government we voted for," said Mike Henry, a local neighborhood association president, during the tense morning session. "It appears you are trying to pull a fast one. The way you are treating development here is not in the best interest of the community." Mayor Kersch wasted no time firing back. "Excuse me? There are things I cannot say because I am a public figure," she said. "But you, as a private citizen, can come here before me and be as obnoxious as you want."

"It appears you are trying to keep something from happening," Henry replied.

Bruce Barton, Citizens for Georgetown
Bruce Barton, Citizens for Georgetown (Photo By Jana Birchum)

"We are trying to keep something from happening -- a total traffic snafu, water contamination ..." Kersch said. "Oh well, don't bother to listen to that, I must be lying."

And so it went, for nearly an hour, noisy bitterness abundant. But in the end, the council voted 7-0 to approve the new commercial development restrictions, with members insisting that the ordinance would not have a big effect on Georgetown's development future. And their only alternative, they added, would be a moratorium on all development. "This only affects [deals] that are greater than five acres of commercial development. I can count the number of greater-than-five-acre developments on one hand," Lyda said. "I believe 90% of the citizens are in basic agreement. They want us to set reasonable standards."

Yet the backlash has been swift and loud. "This shuts down development," said Bruce Barton, a Citizens for Georgetown PAC member who is still involved with local commercial development. "Banks are not going to loan money to someone in a place this squirrelly. That news got picked up by all the clipping services and we were getting calls from all over Texas from people asking us, 'What the hell is going on?'" Indeed, Austinite Don Martin -- who was part of Round Rock's La Frontera development -- got a fax the following morning from an investor who was backing out of a Georgetown development deal he had struck with Martin. At the top of the fax was a copy of the Statesman article about the ordinance. "I'm as shocked as everybody else. I don't understand how you can change an ordinance and then tell people it's not going to have an effect when it affects everyone," he said. "How can you make such a sweeping change on a Monday morning without any public input? It's beyond me."

Maybe the public outcry wouldn't have been so loud if it weren't for the tight fiscal year ahead for Georgetown, one that opponents of the current council and mayor say could've been at least partially averted if there were any new commercial development generating tax revenues for the city. "They said they didn't need anything to attract businesses, and it's over two years later now and they haven't attracted anything," said one city source. "The bill in Georgetown is being paid by the rooftops. Property taxes. There's no new industry or businesses coming in there. Georgetown is becoming the laughingstock of Texas."

Indeed, as budget talks have been coming to a head, numerous city social services and programs have been lined up for decapitation by the council. Topping the list, as reported last week in the Williamson County Sun, are a 9% reduction in library funding, elimination of the Georgetown Independent School District's Drug Abuse and Resistance Education program, closing the local pool -- where the city swim team practices -- and dissolving the city's Community Services Division, which oversees (among other things) the city's trash service contract and animal services department. The Sun also reported that the council is unsure what to do about outside community service organizations -- like the Women's Crisis Center and Hispanic Parents in Action -- which have traditionally received at least some funding from the city. Lyda, along with Evans and fellow council member Jack Noble, want to eliminate that funding altogether. "There are people in this community that have a hard time paying their taxes," Lyda told the Sun, "and I have a hard time making their giving decisions for them."

By Saturday it seemed the community was bursting with revolt. Several local citizens had placed Styrofoam cups in the fence surrounding the community pool, spelling out the message "Save Our Pool," and including Mayor Kersch's telephone number. The Sun ran a picture of the sign and reported that city workers were told to take the sign down after Kersch began receiving calls at her office. That same day, the newspaper was filled with angry letters. "Growth is good. Business growth is even better, because it creates a tax base that pays for services that are needed, parks for our children, and the goat trails we call streets," read one letter. "The council needs to heed this warning. Elections are coming, and when they are all out of office, they still have to pay taxes. They will have to drive to Austin to shop and spend hours in traffic, just to come home to a place where the roads are falling apart ... ." Others were more stinging. "I am writing this letter deep within the border of the Peoples' Republic of Georgetown," begins one. "Our Politburo, which is 21/2 years into its takeover, has created its own vocabulary and scare tactics to let the common people know that we are being watched over and shepherd[ed] by superior beings. All is well!"

Georgetown PAC members Sheffield and Barton said they are not at all surprised by the growing discontent. They argue that the tax problems, exacerbated by the loss of commercial development over the past two years, are going to take many years for the city to overcome. "The problem for me is, as a parent, those tax dollars, if they were located in Georgetown, could be going into our school system," Sheffield said. "But now they're cutting programs because they don't have any money."

Council members and the mayor maintain that what they are doing is indeed the right thing to preserve the quality of life that defines the heart of Georgetown. "As a matter of fact, we've been a bedroom community since at least 1970. We have a great lifestyle," Pfiester said. "This is about maintaining lifestyle. It doesn't have a damn thing to do with [residential tax to commercial tax] ratios. Temple has a 50-50 ratio, and who the hell wants to live in Temple?"

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