Austin at Large: We’re Not Making More Land

Showdown at the Batcave Part 3: What’s the return on this $277 million investment?

Austin at Large: We’re Not Making More Land

Y'all might have gathered over the last two weeks that, if I describe the trio of populist activists who started this whole mess at the South Central Waterfront as "the law firm of Bill, Bill, and Fred" (Bunch, Aleshire, Lewis), that I don't have that much respect for them, which might seem churlish given their decades of advocacy on important Austin issues, and, for Aleshire, years in elected office. I think a better assessment is that I find myself often unconvinced by their arguments that some civic intervention or another – in this case, tax increment financing on the South Central Waterfront – is an affront to the rights and welfare of good and true Austinites, that can only be rejected and never understood, and that can only be justified by civic corruption. That's a fun way to organize politically, but it doesn't solve for Austin's growing pains that are unique to us as the City That Never, Ever Shrinks, the fastest-growing major U.S. metro area of the last decade and No. 3 of the decade before that and No. 2 of the decade before that. (We were bested pre-2010 by Las Vegas, but that changed after the Great Recession of 2008-09 that decimated Sin City and largely passed Austin by.)

It's a shame, because there really are areas of public interest where City Hall is on the verge of fumbling its enormous boom-town bag away from Austin's civic values and toward its worst impulses. For example, I have growing concerns about the blitheness with which the city is willing to acquiesce to private claims on public spaces, be they neighbors seeking residential parking permits or the millionaires and billionaires behind Waterloo Greenway. I'd totally appreciate the help from activists like Bill, Bill, and Fred to protect things that belong to the people of Austin. The proposal to spend up to $277 million (note the "up to" – it's a pretty big detail, as I covered last week, that Bill, Bill, and Fred seem to have missed) on infrastructure in the SCW does the opposite of this. It gives us the opportunity to leverage private land that right now isn't even benefiting its owners (unless you need to, I dunno, practice fire-eating safely on the 15-acre parking lot at the old Statesman HQ, aka the Batcave) for needs expressed by the public during a SCW planning effort that lasted for three years and has been waiting to be implemented for another five. It also (another detail they missed) helps a Council that as a matter of policy wants the affordable housing, open space, flood control, and multimodal mobility the TIF would help pay for, but which BB&F have demanded simply vote no on this proposal, without any kind of compromise or refinement.

What Else Did They Miss?

All that's to say that there are only so many ways I can gracefully correct Bill, Bill, and Fred without it seeming that I'm trying to make them look bad. I wish I didn't have to. And yes, there's more.

The city's other four active TIF districts or "reinvestment zones" (to make this even less limpid, they're numbers 15 through 18; the SCW would be No. 19) contain, respectively, City Hall itself and the Second Street shopertainment district; the former airport at Mueller; the Waller Creek/Waterloo Greenway corridor (to fund construction of the flood control tunnel once voter-approved bonds proved insufficient); and the former Seaholm Power Plant. All contain what is now private property along with pieces of various sizes still owned by the city, as does the SCW. While the end-of-life of their predecessor uses made them ripe for redevelopment, except for a couple of sad blocks of Waller Creek none of them were "blighted" in any ordinary sense of the term. Why does this matter? Because BB&F have declaimed loudly and repeatedly that land within a TIF district must be "blighted" and impossible to redevelop at all without the investments funded through the TIF. "This proposed $278 million giveaway violates – and as a gross abuse of the Texas Tax Code – provisions for subsidizing development of blighted areas that would not otherwise develop on their own," the trio wrote in their epic December letter to Council denouncing the project.

Do I need to tell you that the Texas Tax Code, Chapter 311 (enacted in 1987), says no such thing? You can see for yourself! Sec. 311.005 lists nine criteria, any one of which can satisfy the requirements for a TIF district, including defective or inadequate sidewalks (which, since the SCW largely lacks interior streets, kinda goes without saying); "faulty lot layout," which I discussed in some detail two weeks ago; and "the deterioration of site or other improvements," which could describe basically any part of an aging yet growing city. If one of these is met, and "improvements in the zone will significantly enhance the value of all the taxable real property in the zone and will be of general benefit to the municipality," then you're good to go. For much of the SCW, including the Batcave, the city might not even need to substantiate this, since the areas are also slated to be rebuilt to accommodate Project Connect investments, and transit gets a free pass to TIF legitimacy. Or 50% of the property owners can simply petition a TIF into existence! BB&F can get right on outta here with their "gross abuse of the Texas Tax Code" nonsense.

The code does require that cities actually study the proposed return on investment of their planned TIF spending as part of their creation. For the SCW, that work is being handled, once again, by Charles Heimsath, the dean of Austin real estate analysts, who pegs the taxable value of the SCW land as of Dec. 31 at $988.4 million. In 2040, that same land will be worth $3.9 billion if, as Bill, Bill, and Fred suggest, the TIF investments that they have argued are unnecessary aren't made. But if they are? Well, BB&F might need to explain why they're right and Heimsath and the city finance team are wrong, because the latter have the SCW ballooning in taxable value to $7.9 billion should the city do its job here. "Without the implementation of the district plan and supporting infrastructure investment," Heimsath writes, "the area will develop in a fragmented manner at significantly lower densities and taxable value."

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KEYWORDS FOR THIS STORY

Batcave, Waterloo Greenway

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