Council Watch

Ex-Neighborhood Housing Direc-tor and current developer Gene
Watkins is
roaming the corridors of City Hall more and more these days, and
raising
ethical questions since he’s not registered as a lobbyist. His latest
affordable-housing proposal, under Gene Watkins Development, Inc., is a
plan to
turn the historic Stephen F. Austin Hotel, located at Sixth and
Congress, into
105 apartments and two floors of commercial space. To do so, he wants a

$6
million, low-interest city loan and a 100%, seven-year tax abatement on
improvements.

Considering his familiarity with the city’s affordable housing
program and
the council’s desire to revamp the hotel, which now serves only as an
outlet
for the angst of window-smashers, it could be an easy sell.
Council-member Max
Nofziger, the head of the Downtown Subcommittee, loves the idea.
Watkins, the
housing director between 1988 and 1993, hopes he can get other
councilmembers
to fall in line.

Representing the current hotel owner, Raleigh Enterprises, and
nine other
investors including himself, Watkins is asking the city to cash out a
CD
account and lend the proceeds, which would total close to $6 million,
to the
investors. The CD is currently held by the Austin Housing Finance
Corporation
(AHFC), a city-created entity. The city council, which makes up the
board of
the AHFC, created the account with money from a 1980s bond issuance for
affordable housing that was never used. It is currently bringing in a
4.5%
interest rate, and could go to 5% by the end of the decade.

The interest goes to the little-known Down Payment Assistance
Program,
helping low-income homeowners get affordable mortgages. Watkins helped
design
the program in the 1980s. Now, he promises to give the city the same
4.5%
interest rate over a period of 30 years and to build two-bedroom
apartments
that will rent for an estimated $510 a month.

Watkins is also an investor and council “briefer” in two other
recently
approved affordable housing projects that will receive upwards of $2.2
million
in Housing and Urban Development funds from the city. (The Meadows at
Walnut
Creek and Scattered Cooperative Infill Housing Project, aka SCIP II).
Yet, he
is not even registered as a lobbyist. He says he doesn’t need to be,
since he’s
only representing himself. “I’m representing yours truly… hustling as
a
developer.”

He also says his intricate knowledge of the housing department
– some at city hall say he knows more than anyone else in town – does not create any problems, since he has been off the city payroll for a
year and a half. “There’s no intimate
knowledge that I’m taking advantage of. The city’s funds are all
made
public. I would encourage anyone who’s interested in affordable housing to come and utilize the city’s programs, because without the city’s help it’s impossible to
produce
affordable housing.”

Last Thursday, council approved the final phase of the Balcones Canyonlands Conservation Plan. The
vote was
5-1-1, with Council-members Eric Mitchell opposed and Ronney Reynolds
abstaining. The plan allows developers to pay a mitigation fee (between
$1,500
and $5,500 per acre) that would go for the purchase of 9,501 privately
owned
acres in western Travis County over the next 30 years. The land will be
combined with 21,000 previously acquired acres to create an endangered
species
habitat preserve. In exchange, developers could build on what would
otherwise
be protected habitat, under a blanket 10(A) permit granted to the city
and the
county from the U.S. Fish and Wildlife Service.

The cost for both the city and county to acquire and maintain the
habitat
is estimated at $153 mil-lion for the next 30 years, according to staff
figures. A large portion of the funding will come from the mitigation
fees.
Some will also come from an oft-disputed fiscal tool called an
incremental tax
plan, which will allow Travis County to redirect the increase in
property taxes
from the developed land to purchase more preserves.

Reynolds says he abstained because a proposed $12 million for the
plan
would come from the Drainage Utility Fund. Reynolds has consistently
opposed
using the fund for environmental projects. Mitchell, explaining his
“no” vote,
said he doesn’t like spending tens of millions of dollars to protect
“bats and
lizards” in the Hill Country while East Austin is full of crime and
drugs.

Members of Save Austin From Extravagance (SAFE) held
their first
meeting Thursday – a public press conference attended by about 22
people. The
group, led by ex-Councilmember Bob Larson, sprang up after city council
authorized the issuance of $8 mil-lion in “certificates of obligation”
(which
are the same as bonds, but don’t require a public vote) for a new
baseball
stadium. Larson says the authorization violates the spirit of the city
charter,
since it was not approved by voters. (The city charter allows debt
without
voter approval only in cases of emergency. Since other cities were
allegedly
vying for the Phoenix Firebirds baseball team, city staff deemed the
need for a
stadium an emergency.)

SAFE, which has about 20 members, is considering trying to gather
25,000
signatures on a petition calling for a city charter amendment that
would
require that all debt be voter approved, unless it’s a public health or
safety
emergency. Larson says the “emergency” loophole in spending must be
closed to
prevent an ever-escalating city debt. Including interest, the city’s
total debt
currently stands at $5.4 billion, or about $11,228 for every Austinite.

According to Larson, the councilmembers who have been responsive
to the SAFE message are Jackie Goodman and Brigid Shea, but not
Reynolds,
Mitchell, or Mayor Bruce Todd, all of whom ran last year on the theme
of fiscal
conservatism.

On Thursday, environmentalists, fiscal conservatives, and
East
Austin representatives spoke in favor of putting the proposed $100
million
city hall in East Austin, instead of the four-and-a-half city-owned
blocks
currently occupied by the council chambers and Liberty Lunch, a site
suggested
by the three members of the Downtown Subcommittee – Todd, Nofziger,
and Gus
Garcia.

East Austin residents and environmentalists say an East Austin
locale for
the building, which would house approximately 9,500 employees, would
bring new
business into the area. Fiscal conservatives say that if a new city
hall must
be built, then an East Austin location is preferable; it would allow
the city
to profit by renting or selling the lucrative four and a half blocks,
which
abut Town Lake. After more than 20 speakers, the council accepted a
Nofziger
motion to put off site selection for a month.

This week in council: The city will vote on providing
wastewater
service for the Northwest Travis County MUD #1, which Austin may not be
able to
annex under legislation that just passed the Texas Senate and is
currently
being considered by the House.