Parker Springs Developer Beats the (Reset) Clock

Photo By John Anderson

For three years, developers at King Fisher Creek Ltd. have clashed with Southeast Austin residents, city and state officials, and their own subcontractors over their efforts to build the Parker Springs low-income housing complex off East St. Elmo Road. Now, the saga may soon be over. King Fisher vaulted a major hurdle last week when the Tampa, Fla.-based developers met an Oct. 1 state-imposed deadline for finishing construction on the Parker Springs complex. That clears the way for King Fisher to get $2.2 million in federal low-income housing tax credits and begin renting Parker Springs' 35 units.

It's a startling reversal of fortune for the development, which appeared to be dead just seven months ago. Despite a frenzied attempt to finish Parker Springs in under two weeks, King Fisher missed its initial Dec. 31, 2002, deadline to finish construction and obtain a certificate of occupancy from the city of Austin, verifying the complex was livable and up to code. Early this year, the Texas Department of Housing and Community Affairs revoked the federal tax credits King Fisher had been counting on, and Parker Springs' neighbors -- who had opposed the project on environmental grounds -- delighted in an apparent victory.

But in March, King Fisher principal Tom McMullen and his team of lawyers asked the TDHCA board to give them another chance. McMullen claimed at a March 13 TDHCA board meeting that poor weather, meddlesome neighbors, and the city of Austin's burdensome development review process were to blame for King Fisher missing the December deadline. The board was sympathetic; over objections from TDHCA's own staff, they reinstated the tax credits and gave the project a new completion deadline of Oct. 1. No one at the agency can recall TDHCA ever restoring tax credits after a developer had missed such a deadline, according to agency spokesman Gordon Anderson.

Kensington Park Neighborhood Association President Lee Sloan speculates the TDHCA board backed down because McMullen and his lawyers may have threatened to sue. (Sloan and his neighbors have fought Parker Springs for years, and at one point, McMullen did threaten to sue the Kensington Park NA for interfering with his plans.) But Anderson contends that TDHCA has treated King Fisher fairly. "They had a very persuasive argument," he said. "Our board realized this was a unique set of circumstances that was outside the developer's control."

King Fisher worked furiously during the summer construction season to meet its second-chance Oct. 1 deadline, and last week Anderson confirmed that TDHCA had received the necessary certificate of occupancy from the city before the deadline expired. King Fisher has one final technical hurdle to clear: Developers must submit accounting paperwork for agency approval, but Anderson said, "I would be surprised if something were to go wrong at this point." He said the agency will likely release King Fisher's tax credits, which total $225,000 a year for 10 years.

Of course, King Fisher Creek still must rent its units at Parker Springs in a tight market; Sloan notes that the developers haven't even started advertising the available apartments. Then there's the little matter of King Fisher's unpaid bills. Subcontractors have filed 34 liens against King Fisher for nonpayments totaling more than $1 million, according to Travis Co. records. With the development nearly finished, it's unclear what recourse subcontractors have; Anderson said the liens wouldn't endanger King Fisher's tax credits.

Anderson argues that while the project has had serious problems, it ultimately is a low-income housing success story. "There's certainly a need for affordable housing in Austin. Had those [tax] credits been recaptured, there's no guarantee they would have gone to another Austin development." And even Sloan notes optimistically that the King Fisher affair has led other developers to work more closely with the neighborhood, listen to and take heed of residents' input, and build quality complexes. As for Parker Springs, Sloan says, "from our point of view, that land over there is ruined. It's very sad."