County Revives Proposal for Palm School / Expo Center Land Swap
County Judge’s latest offer to city manager expires Dec. 16
Now that Austin and Travis County voters have expressed their wishes, it's time for leaders of the two jurisdictions to return to their discussions of the Neal W. Kocurek Memorial Austin Convention Center, the neighboring Palm School, the Travis County Expo Center, and the city and county's respective levies of hotel occupancy tax. On Monday, Nov. 18, County Judge Sarah Eckhardt, in a letter to City Manager Spencer Cronk, relayed the Commissioners Court's latest offer: In return for Palm School, the county would like the land upon which the Expo Center sits (currently leased from the city) and, beginning in 2022, access to the 2% HOT the city has collected since 2002 to pay for the previous expansion of the Convention Center. This offer, she writes, expires Dec. 16.
Those terms are somewhat more favorable to the city than Eckhardt's last offer, made by letter to Mayor Steve Adler in July, in which she asked for those two things plus the city-owned HealthSouth property at 13th & Red River (next to the former Brackenridge Hospital campus). After talks with Cronk last week "showed promise," the judge writes, "we can forge agreements benefiting downtown Austin as well as ... far east Austin and Travis County." Eckhardt has now identified HealthSouth as "another resource of interest" that could be offered in lieu of the Expo ground lease in exchange for the Palm property. (The city has been looking at HealthSouth as a housing site; local mental health providers have looked to it as a potential hub of Downtown services, especially now that Brackenridge is being demolished.)
As you know because you read the Chronicle, the city had hoped to pay nothing for Palm, the historic elementary school serving the Mexican American Eastside from 1892 until its closure in 1976. The building and grounds at what is now I-35 and Cesar Chavez ended up in the county's hands, housing its Health and Human Services offices as the Convention Center, and then Rainey Street and the booming Eastside, shot up all around it. That left Eckhardt and the county unwilling to simply give away a real estate asset they'd had valued at $53 million, even with plans in place – now codified as restrictive covenants – to preserve and restore the historic building for a public purpose, as has been advocated by community leaders who want the city to take control of the property.
Many find it hard to believe Palm would really fetch $53 million in a market transaction with those covenants in place, and Eckhardt in her letter "strongly supports" Cronk getting his own appraisals of the property's value with and without the restrictions. Also back in July, developer Doug Manchester, who built the adjoining Fairmont, briefly – for less than 24 hours – made an unsolicited proposal to the county to preserve the school while building around and over it, but backed off after Palm's champions made their displeasure known.
Meanwhile, somewhere in between "more than $50 million" and "nothing" is the value of the land underneath the Expo Center, which adjoins the Eastern Crescent's Walter E. Long Park and its namesake lake. The county owns the Expo buildings; its largest tenant, Rodeo Austin, bankrolled the county's successful Proposition A campaign to designate the Expo Center as a venue for HOT funding. Outside the city limits, Travis County can collect its 2-cent HOT on room rentals now, but within Austin's confines the combined city and state HOT is already at the state-allowed 19% maximum. The question before Cronk, Adler, and the City Council is whether to relinquish the 2 cents earmarked for the 2002 expansion bonds, which are almost paid off, or keep it to help fund the next Convention Center expansion. The failure of citizen initiative Prop B earlier this month means plans for a rebuilt center are still a go, but the finances of that project are very much not set in stone; Eckhardt presents the county's latest offer as a way for the city to take "decisive action" on the "voter-approved" Expo project.