"It really is kind of a fork in the road with respect to what our downtown area looks like," Mayor Steve Adler said Aug. 30.
Planning for the South Central Waterfront, which runs roughly between Lady Bird Lake and Riverside Drive east of South First Street, has stretched on for years. Over the last decade, the district was identified as an area on the cusp of rapid change, a position that led the city to support the creation of a long-range vision plan to guide new development there while also creating "the best possible outcome for all Austinites" overall.
That framework, adopted in 2016, was meant to serve as the foundation for a separate city regulating plan—a zoning alternative that would set development rules across the entire 118-acre area. The regulating plan has yet to be completed but is intended to maximize the benefits provided through any new development in line with the vision plan's goals.
The district regulating plan could be brought before relevant board and commissions and eventually City Council before the end of the year. But while that planning remains in progress, the large-scale Statesman project is also drawing attention given its size and importance to the South Central Waterfront's future.
That 19-acre development from Endeavor Real Estate Group at 305 S. Congress Ave. could bring multiple high-rise towers featuring millions of square feet of apartments, condominiums, office and retail space to the lakeshore in addition to accessible parkland and other features. The project has attracted scrutiny from council and the community over the scope of proposed benefits it could bring to the district and how public funds would tie into the private initiative.
City Council is scheduled to vote on the second of three required zoning readings needed to finalize a planned unit development, or PUD, for the Statesman site Sept. 1. PUDs are an alternative to traditional zoning that allow more complex projects to exceed local development limits by trading off a package of superior public benefits such as the affordable housing, parks and infrastructure improvements proposed by Endeavor on the property.
Funding questions
On top of all those decisions, city officials are also facing a choice regarding a tax increment reinvestment zone, or TIRZ, blanketing properties in the South Central Waterfront including the proposed PUD.
A TIRZ dedicates annual property tax gains within its limits to local infrastructure and civic improvements. While council members approved a preliminary plan for a South Central Waterfront TIRZ late last year, they have yet to fully set up the funding mechanism.
Ahead of their possible September vote that would leave the Statesman PUD just one step away from final approval, council spent hours during an Aug. 30 work session running through the various planning layers and challenges that remain in the South Central Waterfront. Officials said they hope the process will end up bringing intended benefits to district residents and all Austinites who want to live near or visit the lake while also calling attention to the roadblocks still faced before the processes wrap up.
Lingering questions include whether city financing in the area is even feasible, if the landmark Endeavor project matches up with the Austin community's hopes for the district, and if the tradeoffs between the city and developer on the PUD make financial sense. A recent consultant analysis of the initial PUD outline found several amendments proposed by the Austin Planning Commission and City Council members could make the project unrealistic for the developer given a price tag of more than $300 million for various benefit requirements Endeavor may not support.
Land-use attorney Richard Suttle, representing the property's owners, has repeatedly told council that the Statesman project will not happen if the finances do not line up. The city's consultant report also found based on asks for affordable housing, dedicated parkland and more, the project could end up costing as much as $2.55 billion against an estimated $2.16 billion value—a nearly $400 million shortfall attributed to some amendments and rising local construction costs.
“You can only add so much to it before it stops. ... If the Statesman stops, I think the South Central stops, and then we lose an opportunity for another number of years to generate revenue for the city," Suttle said. "I didn’t want to leave the impression that we’ll take whatever we can get because it’s just a numbers game. It’s just math. And we can get through it. But it won’t happen if it doesn’t make sense.”
Lining up benefits
Council is set to continue its review of next steps on both the TIRZ and regulating plan Sept. 1 in addition to the Statesman PUD. Council's items of interest on that project include its affordable housing aspect; proposed green space contributions, including a new park, lakeshore trail access, and a seating and bat viewing area; the funding of a Barton Springs Road extension; and locating a Project Connect light rail station on its eastern edge.
Council touched on those items and more during the work session, although staff were unable to immediately address several officials' questions on points such as who would be responsible for parkland management or funding the new roadway.
Adler said council's ongoing discussions may also need to center on whether Austin should give Endeavor even more entitlements, such as increased height and density for its project, to fill the funding gap and provide the desired improvements. Despite some reservations, he said a deal with Endeavor along with the new TIRZ could support the South Central Waterfront vision.
"Is it really a developer giveaway if as a community we’re building the road system that we want, the grid system that we want, the utility lines we want, the infrastructure? Is that really a developer giveaway, or are we just putting the developer in a position where they can and will build enough for us to be able to get ... the dollars we want to be able to have 1,000 or 2,000 [homes]?” Adler said.
District 5 Council Member Ann Kitchen said she hopes to continue pushing Endeavor and the district planning process overall for the affordable housing as laid out in the 2016 vision plan. That framework calls for 20% of all housing in the district to be available to those earning below the local median family income, a portion of which has been requested from the Statesman project.
Through this week's talks and beyond, Kitchen said the city should find some way to make the affordability workable so the district does not become exclusive to the wealthy.
“Yes, it costs more there. And that’s why people who have more money can live there. I’m wanting to understand how it is we’re going to plan for this area so that it can be more like a Mueller where we got 20% affordable housing," Kitchen said. "If we just focus on the cost, we will never have anybody that’s lower income living downtown or near downtown or near the lake.”
