City Council acknowledged that looming boom Nov. 14 when it directed City Manager Spencer Cronk to work with the city’s public transportation authority, Capital Metro, to help finance the completion of new rail stations in the two areas.
Last year, City Council greenlit the first phase of a massive, 20-year, phased mixed-use development at the 66-acre Broadmoor Campus, an area currently occupied by the IBM campus. Plans for the area include at least 2,000 housing units and buildings reaching 360 feet tall. The area has been referred to as Austin's future second downtown. The developers agreed to help relocate the Kramer Lane MetroRail station to the Broadmoor Campus.
McKalla Place will also see some changes—construction is currently underway for the Austin FC stadium, Austin’s first professional sports complex. The birth of the stadium is expected to spur surrounding development. The aforementioned Kramer Lane MetroRail station was about a half-mile away from the stadium, but with its relocation to Broadmoor, Austin FC agreed to pay $3 million toward the construction of a new rail station.
However, more money is needed to develop the rail stations, and City Council asked Cronk on Nov. 14 to work with the transit authority in figuring out how to finance the construction. The direction, brought by District 7 Council Member Leslie Pool, floated the idea of a tax-increment reinvestment zone, which captures property tax increases in a specific area to fund targeted projects.
Although they supported the direction, some City Council members said they were uncomfortable with the creation of the tax-increment reinvestment zone because it prematurely earmarks property tax revenue that would otherwise go into the city’s general fund budget. Mayor Pro Tem Delia Garza said the city needs to be careful when wielding the tax-increment tool and using it too freely lead developers to think certain projects can just be paid for through tax-increment financing.
District 10 Alison Alter echoed Garza’s concerns.
“I think we have to be really careful earmarking our funds without understanding the down the line costs,” Alter said. “If we don't take in that tax money for our general fund, our general fund will be missing money that it needs to cover expenses, and we know that we're going to be struggling to get enough general fund money with the [state-mandated] revenue caps moving forward.”
Cronk is scheduled to come back with his findings by January 2020.