Travis County seeks public input on restrictive covenants for Palm School site

This 1940 file photo from Austin History Center shows Palm School while it was still in use as an elementary school.

This 1940 file photo from Austin History Center shows Palm School while it was still in use as an elementary school.

Travis County commissioners voted unanimously Aug. 20 to approve a 30-day public comment period regarding draft-restrictive covenants for the Palm School property in downtown Austin.

Commissioners approved the draft terms June 4, directing county staff to work with the county attorney’s office to finalize specific legal language and to solicit feedback from residents.

The comment period will run from Aug. 21 through Sept. 20. Travis County residents can provide feedback by emailing [email protected] or sending a hard copy letter. More information can be found here.

County staff will report their findings to commissioners before final language is put to a vote, said Diana Ramirez, director of economic development and strategic investments.

The site

Established in 1892, Palm School is a former elementary school that served predominantly Latino students. Most recently, the building was used as office space for the Travis County Health and Human Services Department, which will move to a different location in 2021.

Travis County owns the Palm School building, while the city of Austin owns the adjacent, 37-acre Palm Park.

The park is currently being redeveloped by Waller Creek Conservancy, a local nonprofit, as part of a wider effort to create a new parks district in Central Austin.

The restrictions

The set of restrictive covenants—essentially guidelines for future use, regardless of who ultimately owns the property—include requirements to pursue national and state historic landmark designations for Palm School, to complete restoration work before any new construction can take place and to keep up with ongoing building maintenance.

Perhaps most notable is a requirement that 80% of the property’s occupiable space be dedicated to heritage or community uses, while maintaining that the primary area be available and open to the public.

The draft terms also limit development on the property.

Subdivision of the property is prohibited, unless otherwise approved in advance by the seller, according to an Aug. 12 draft of the restrictive covenants.

“At the Commissioners Court’s discretion, if you get an offer that you think is appropriate, and it includes subdivision, then the Commissioners Court, at their sole discretion, can approve that subdivision,” Ramirez said.

Additionally, any new construction must be limited to the north of the original Palm School entrance; must allow viewing of the school from key access points, including Palm Park; and “maintain physical and visual connectivity” between the school building and the park, per the draft.

The Travis Central Appraisal District values the Palm School site at $53 million, with the restrictive covenants taken into consideration.

In light of the recently-passed property tax revenue cap, commissioners have stressed the need to find alternate revenue streams as the cap will limit their ability to collect property tax revenue.

“I’m in no way interested in handcuffing ourselves with the ability to monetize at least some of that tract,” said Precinct 3 Commissioner Gerald Daugherty. \

Other concerns

On July 3, Eckhardt proposed in a letter to City Manager Spencer Cronk and Austin City Council members that the county swap ownership of Palm School with the city.

In exchange, Austin would offer ownership of the former HealthSouth physical rehabilitation facility, which TCAD assessed to have a market value of $20 million in 2019; the Travis County Exposition Center, which the city leases to the county; and a portion of the local hotel occupancy tax that is statutorily available to—but has not yet been claimed by—the county.

City officials have not formally responded to the proposal.

Then, in mid-July, Douglas Manchester, president of the Manchester Financial Group and financier behind the Fairmont Austin hotel, proposed unsolicited an offer to buy the land surrounding the Palm School building in downtown Austin.

The site neighbors that of the Fairmont Austin hotel.

In response, local grassroots organization Save Palm School wrote in a July 13 Facebook post that Manchester’s proposal “violates the integrity of our community’s request to preserve and protect” the property and that his contribution is a “disingenuous” one meant “to bully and buy [his] way into current negotiations between Travis County and the city of Austin."

Manchester quickly rescinded the offer, which he described as “preliminary” and “shared with the local media without my authorization” in a July 16 letter to commissioners.

Meanwhile, county commissioners began exploring a November referendum regarding a venue project to expand the Travis County Expo Center. If voters were to approve the project, the county would have moved to levy a 2% hotel occupancy tax to fund it.

However, on Aug. 9, council members approved a 2% increase to the city’s hotel occupancy tax rate, bringing it up to 11%. Combined with the state’s 6% hotel tax, the city’s amended rate is now 17%. the maximum allowed in Texas.

During the vote, council members also directed Cronk to work with the county to find a mutually beneficial path forward on the expo center expansion project.

County commissioners still intend to hold a referendum election, hoping to access hotel occupancy tax revenue in 2021, when the city is expected to pay off its debt for a previous venue project—the 1998 expansion of the convention center downtown—and, in doing so, free up a 2% hotel tax increment.