Travis County

Agenda Item

Receive comments regarding a petition to create the Velocity Crossing Public Improvement District in Precinct Four. (Action Item 17) (Commissioner Gómez)


Department:CC Agenda requestSponsors:
Category:General Government

Meeting History

Feb 12, 2019 9:00 AM Video Commissioners Court Voting Session
draft Draft

MOTION: Open the Public Hearing.

MOVER:Margaret J. Gómez, Commissioner
SECONDER:Gerald Daugherty, Commissioner
AYES:Sarah Eckhardt, Jeffrey W. Travillion Sr, Brigid Shea, Gerald Daugherty, Margaret J. Gómez


Feb 12, 2019 9:00 AMVideo (Windows Media) MP4 VideoCommissioners CourtVoting Session

9:28 AMExists because oftentimes when we are looking at areas in the community where we've got a lot of displacement and out migration, if they are named as low-income or low opportunity, then we push communities further and further out. There's an interest in making sure that we have these types of developments close to local transportation and close to school districts. So if we can discuss preparation of a work session to address that fair housing bubble, if you will. But I think that this is an example of a developer who has reached out to community, who has worked within our processes, and who has presented a program that is going to be quite effective.
9:29 AMThank you, commissioner.
Thanks so much. May I take that as a motion in favor?
We have a motion and second. All those in favor? That passes unanimously.

9:29 AMCredits.
Thank you.
The next public hearing is agenda item number 2, receive comments regarding a petition to create the velocity crossing public improvemnt district in precinct 4.
Move the public hearing be open.
All those in favor? that passes unanimously. The public hearing is now open.
9:30 AMGood morning, deanna ramirez and karen thigpen with travis county economic development, strategic investments. This public hearing was originally opened on January 29. This is the third commissioners court meeting that the public hearing is open on the first day on the 29th, we didn't have any-public com. On the second week, on February 5th, we had one public comment in favor of creation of the pid. And then today we're asking for any other public comments on this. And there's an associated action item, number 17, for creation of the pid.
Is there anyone in the audience? Come on up if you have comment, questions or concerns.
Good morning, commissioners.
Good morning. how are you?
9:31 AMRosa rios valdez. i'm the president of business and community lenders of texas. We're based here in austin. We are a full-service economic development firm. We are a nonprofit. I wanted to comment on the velocity crossing because six of my staff live in precinct 4, and three live in del valle. We recognize that this is a very attractive business development opportunity, but it's also in an opportunity zone. And when you are developing in an opportunity zone, you're looking beyond just affordable housing. You need to be looking at public benefit that includes small and minority business opportunities to locate to the area. You're looking at cultural and arts facilities for the residents and for the youth. You're looking at public spaces. Public spaces that will benefit the community. So i'm really encouraging that as the project moves forward, that we visit with the development team, with your staff, and that we look at the public benefit that a project of this size will do. It's all about economic equality. And so if the entire focus is the private sector investment, we're missing that opportunity. So i'm here today to suggest to you that as the project moves forward we do consider other public purpose opportunities for the neighborhood.
9:32 AMThank you so much for being here, ms. Valdez.
Could I just ask for clarification? Would you mind elaborating on that a little more because i'm not completing clear on what you are suggesting.
9:33 AMWhat i'm suggesting is that what i've seen so far with the design, the land use plan, is primarily private benefit. So we're not seeing perhaps spaces that support small and minority business opportunity. Opportunities for small businesses to locate to the area. We're not seeing public spaces. Learning facilities for youth, for children. I have staff that live in this district, and some of what I hear is there is no internet, families can't afford internet. There is no public library. There's no public museum. There's no cultural arts facility. All of these are public benefits. In addition to attracting minority businesses, women businesses that need to come to an area that has this type of opportunity.
9:34 AMJudge, if I could just ask, maybe this isn't the right time, but I would like our staff to elaborate on this as well. That's been one of my concerns with these pids. The creation of the pid, the assistance with the pid bonds gives the developers the ability to raise in some cases large amounts of money up front. I think this is proposed to be anywhere from 50 to 70 million dollars or more. And what has not always been clear to me is what is the public benefit? What else is the public getting above and beyond what the market would have produced or that the developments would have generated or done anyway? I mean people have to develop an attractive development if they want tenants to move in there or people who lease their space or whatever, so I don't completely buy it they would have built an ugly, you know, unpleasant place if they hadn't gotten all the pid money. I really feel like there's got to be a big proof of what the measurable public benefits is from all these pid funds because it does involve a significant assessment on future tenants or residents. So I am also looking for a lot of detail on the public benefit that is clearly beyond what the market would have produced.
9:35 AMThank you.
I completing agree. the pid is not for your average development. That would be a completely useless policy. It would be the illusion of a higher level of land use, economic development, infrastructure. Why don't we have staff run through the list of benefits that are under negotiation, and then if ms. Valdez or anyone else here for the public hearing has suggestions for other benefits that we should be in negotiation for. The vote today would be to create the pid and continue negotiating for these public benefits. So let's hear the list and see what you think, and we would love to have you remain involved.
9:36 AMThank you.
There are quite a few community benefits that are identified in the backup on agenda item number 17 related to this particular pid. This same kind of list of community benefits is included in the backup for every pid that we've had created so far. And I feel compelled to remind commissioners court that, you know, one pid doesn't solve all of the community issues that an area in particular faces. It is a funding mechanism, a financing mechanism whereby a developer can get access to land secured debt financing for public improvements that are then dedicated to the local government. Because they are able to get this money up front, then it helps them with their bottom line to be able to offer some of the community benefits that we negotiate for. So with respect to travis county code pid policy, section 481. 003, community benefits, number 1 is projects that will generate primary employment or other long-term economic development benefits to the county. This pid in particular is the first commercial pid that the commissioners court is entertaining. So the tenants will be commercial and retail companies that will create permanent jobs after the construction jobs are no longer needed. Prior pids that were residential pids, basically you have the jobs created during construction, construction jobs, but then afterwards you don't have very many jobs created unless there is a few commercial pore sells. This one -- parcels. This one is basically all commercial and retail parcels. And the market research firm that was hired, rcl, market support for 2. 9 to 3. 9 commercial space in addition to multi-family units or hotel keys, a combination at this site. Then we have the second requirement -- or second type of community benefit that a pid can address is projects that increase affordable housing opportunities for persons of low or moderate incomes. And we already have the developer's agreement that they will comply with the pid policy, subchapter b, which is affordable and fair housing. And regarding payment of a community benefit fee of 10% of the net pid bond proceeds at each pid bond issuance. Based on the affordable and fair housing and opportunity review that travis county staff prepared, given the rapid transition of this area, as you were speaking to before on the previous item, we're expecting that this area is going to be transitioning quickly. Staff is interested in eventually obtaining possibly one or two multi-family parcels that are currently being considered by the developer. What we want to make sure is that the county has the community benefit fee in hand first, and then that gives the commissioners court the flexibility to determine what -- where the commissioners court wants to spend the money, whether you want to spend the money on buying a parcel in this particular pid or there are other opportunities that have arisen where you want to move that money elsewhere within this precinct or elsewhere within the county. Number 3 is improvements or services that advance prove master plans. The travis county land water transportation plan priority one conservation corridor runs along the southeast corner of the property and this southeast corner the developer is also proposing to keep as green space. The imagine austin plan includes a high capacity bus rapid transit along highway 71 along the north edge of the property, so that would be very beneficial for the pid. And then vice varies is -- vice versa, having all these commercial and retail along this bus rapid transit corridor would increase ridership on that bus rapid transit in the future. Number 4, projects that create or enhance parks, hike and bike trail trails, rec facilities, open pace benefits, et cetera, that exceed what is required by applicable development regulations. Developers indicated in transportation and natural resources parkland review on form that the pid will set aside approximately 44 to 54 acres space and include trail connectivity from barkely meadows park across 130 through the velocity crossing development. Details will be affected in as development moves through its phases and the preliminary plans for phase 2 or 3 are approved. This public improvement district is entirely within the city of austin corporate limits, so all of the city's permitting and land use requirements will be applied as this project proceeds. Number 5, projects improve environmental protection, storm water quality and flood control benefits in ways that exceed what is required by applicable development regulations. There's going to be a reclaimed waterline extend to do the pid. The developer has been working with the city's watershed protection division and has notified them the project has a clomr from fema and is building the project in compliance with atlas 14. And then the developer is also encouraging tenants to install solar panels and, again, because it's in the city of austin's corporate limits, their green building standards will also come into play. 6, projects that inies increase mass transit, carpooling or any transportation options other than single occupant vehicles. The main roads in the pid will include elevated bicycle lanes that are separated from sidewalks. And by landscaped and trio shaded greenways, the major spine road are designed with sidewalks on both sides in lieu of a single shared-use path. Accompanying detention ponds are being enhanced by-natural scr, design and landscape of these areas has been highly intentional to enhance pedestrian experience and encourage multimodal connectivity through the pid and with the adjacent improvements including acc and heb. 7, projects that improve public educational or health programs and/or facilities. In this area one of the things that the project will do is it will generate ad valorem tax revenues for the school districts, for del valle school district. And it's also expected to generate significant full-time employment opportunities. And then in phases 2 and 3, the roads through the pid will also connect to the acc campus on the south end of this area. Then medical office space is also expected to be programmed in the mixed use site. Item 8 is projects that provide innovative exceptional benefits to improve the public roadway network. In the county other than the project's internal streets, the developer has been working with txdot and city of austin transportation department on turn lanes and signalization along the major roads around the development, which include fm973, sh 130 and sh171 and there will be nine ingress and egress points along the development along these three roadways. Projects featuring excellence in community design including well connected streets, on site amenities and mix of land uses walking distance. The developer is engaged with the urban stein firm that designed the mueller development. And the excellence the community design connectivity there has been cited many times in the media and in professional magazines. It's one of the most desirable areas in austin to live. The proposed design is more challenging to execute due to the higher development costs as well as the permitting challenges that a development can face in this environment. Projects in -- number 10, projects that incorporate more than minimal green building standards you're standards. Again, this is within the city of austin so they have green building standards. And then when you get to the consideration that the commissioners court policy states that you should have more than one -- meet moore than one of these community benefit requirements, we want multiple community benefit requirements and this pid does provide those multiple community benefits.
9:46 AMSo that's a long list of what we're negotiating, and we should get a -- either electronically or in hard copy the backup to you so you can review those and give us input on anything we May be missing.
If I May just briefly, I didn't hear an entrepreneurship center, business development incubators, I didn't hear affordable child care, I didn't hear about cultural and arts spaces, all of the arts groups are getting displaced. It's very unfortunate to get some cultural experiences you have to drive 10, 15 miles into town. Why can't we be doing some of that in our own neighborhoods? So I appreciate the list, but I think we have some way to go.
9:47 AMAnd judge, did I understand that with this vote, if we were to create the pid today, that we can continue working with the developers aen the community to try and add additional features? Is that correct?
Judge, if I may, would you please go ahead and call up the action items since you all are starting to deliberate?
You are absolutely right, julie. If I may, could I take a motion to close the public hearing?
So moved.
We have a motion and a second to close the public hearing. All those in favor?
So judge, there won't be any other public comment allowed?
No, we're going to the deliberation item next.
So if there is public comment, they can comment on the deliberation --
9:48 AMI don't believe there is anyone signed up for public comment on this item. Let me make sure. Is there anyone else signed up for public comment? No? All those in favor? The public hearing is now closed. Let's go ahead and pull up the action item, which is agenda item number 17. Thank you for keeping us on the straight and narrow, and ms. Valdez, you are welcome to stay at the table. 17, consider and take appropriate action on the creation of the velocity crossing public improvement district and the question on the floor was by its creation today, will we continue negotiating on possibly additional benefits that might be raised by the community. Is that a correct restatement?
Yeah, you can always -- this is the initial creation. What this does is it -- after 20 days after creation, it allows for construction of public improvements to begin. It makes them eligible for reimbursement from either the pid assessment or pit bodies. You are making some of the public improvements eligible for reimbursement. That's all you are doing today. The idea is that we will continue negotiating. There are a slew of legal agreements that come forward before the commissioners court votes on levying the assessment and issuing pid bonds, those don't happen at the same time for wildhorse ranch, we levied the assessment and they weren't ready for the pid bonds yet. It happens in different ways for each pid.
9:49 AMWhat is the mechanism for representatives from the community, because I think she raised some very good concerns. The pid tool is a powerful one and enables the developers to raise substantial amounts of money. This is also an opportunity zone, which is this sort of weird new category created under the federal tax law changes that from the briefing i've gotten from staff is sort of the wild, wild west. I do think we need to educate ourselves better on these opportunity zones. But what is the mechanism for people from the community participating in these negotiations? I know we as staff, and it takes up an enormous amount of staff time, do a great deal of legal and economic analysis and negotiations, but what's the mechanic anymore for people from the community to be involved in trying to get more for the community out of these pids? Is there one?
9:50 AMWe don't have one right now, a specific codified process for that. We do listen to what the community wants. Again, like we had -- like I had indicated earlier, you know, there's only so much community benefit that we can get on each individual pid before it -- we have to balance it with its still remaining feasible for the developer. So we try to get what's the most important or critical for the commissioners court. I think that there are opportunities for other things that we can do with our economic development strategy that etsy is working on, it's going to be coming to commissioners court soon. We do talk about trying to find other tools and mechanisms to add to our toolbox to make sure that we have affordable, you know, child care, that we have, you know, creative spaces, sustainable food, all the different kinds of community benefits that we all want to see for our community, especially in low opportunity areas. And also trying to figure out how to handle those without displacing the folks that are already there, bringing opportunity without moving them out, but actually having a way to let them stay there to actually enjoy the higher opportunity they are very complex problems that take money, and some of the money can come from the developers, but some of the money has to come from the local governments also. A lot of these community benefits have to be subsidized. That's the only way you can get anybody to do this. Which is why we're asking for affordable housing through the pids because basically affordable housing has to be subsidized in some way. So through the pids it's subsidized through the pid financing that a developer is able to get to make it feasible for them to either give us -- donate the community benefit fee or for us to be able to buy a multi-family parcel. So I think that that's --
9:53 AMI would also like to add we are statutorily working with the balance in terms of what we can use those pid bond proceeds on that qualifies under statute as a qualified public improvement. So not everything that we might want as a community benefit is something that would be a qualified public improvement, and so the proceeds can't be used for it.
So we May not be able to negotiate in a very specific deliverable, say a cultural center specifically, but in negotiating in commercial space that fronts 71, perhaps by putting residents who are interested in a cultural space in contact with the developer, it might increase the probabilities that a community to developer relationship could produce that result. Also I do want to remind folks that if you just type in travis county pid, p-i-d, it takes you to a website that we host that has all of the pids that are currently in process. This one is not on there yet because we would only be voting it today. But it does give folks an opportunity to see what's happening there and to kind of follow along with the programs that are developing precinct by precinct.
9:54 AMAnd I think the thing that we're also really interested or at least we've talked about it a lot is to be careful to not displays families. And in reading the city of austin's discussion on using their housing bonds, they've been talking about having -- building affordable housing, but then prioritizing the families that are already here. So that they can have, like, the first choice of getting an aforwardable place. So since this pid, I like to refer to it as partners in development because I think that's what's really happening here, that's what's really happening here, and especially in our unincorporated area. That perhaps that could be something that can be talked about since it is in the city of austin. And I would imagine that they have some housing bonds that they can utilize in that area, and maybe go ahead and prioritize families who are already living there.
9:56 AMUh-huh.
Since it's inside the city limits, a developer that was building affordable housing on site could potentially qualify for some of those g. O. Bonds, but they would have to apply at the time they were ready to construct the project. That's not something we could go after right this minute, but your point is well taken.
As the process moves along, perhaps the timing will be better.
And we've talked a little bit about opportunity zones, and staff did get to brief Commissioner Shea on what we've been tracking with the opportunity zone tax benefit, and there just isn't enough there there yet for us to be able to figure out is there anyplace for local government to participate in that. I'm going to be at a conference at the end of this month where a white house domestic policy adviser is going to be speaking to the group on opportunity zones. And we have a website that heather ashland from my staff developed that talks about opportunity zones and what we know so far. And so we're hoping that we get the next round of treasury department regs on that later in month, but it all depends on if the federal government is shut down again or not. The last shutdown delayed the rule writing process for the treasury department. So we're keeping our fingers on the pulse of that to try to figure out is there anything that the county could participate in with the opportunity zones to help drive the kind of development that we're interested in seeing in the opportunity zones for travis county, which are almost all in eastern travis county.
9:58 AMCommissioner Shea.
Judge, going back to this issue of what we're getting in addition to -- because again, I mean, all these pids are asking for millions of dollars in the permission to raise all that additional money. Under the item ten on the list of benefits, it says projects that incorporate mea more than a minimum of building standards. It's my understanding that any development within the city limits of austin is now required by law to incorporate a series of green building standards. So I want to be careful when we're tracking what the 'community benefits' are that we're not giving developers credit for stuff that they have to do by law.
So to me, that's something that we've got to just track carefully. The other thing is, I had thought we had had a discussion previously about a desire to not want to do pids within the city limits of another city.
9:59 AMYeah.
And so what happened with that? Because this is entirely within the city of austin, isn't it?
Yes, it is entirely within the city of austin. The city still has a moratorium on pids, which is why developers who want to develop within the city limits are coming to the county, because -- and if they want to do something beyond, you know, an industrial park, that kind of thing, then they're coming to the county asking for the pid creation. The county works closely and keeps in close contact with the city of austin staff. We have a file-share site that we established that we share with the city staff. We meet with city staff. We invite them to our bi-weekly meetings on the pid with the developer. So we share all our information with them so that they are able to take a look at it and opine on it, and make sure that the developer keeps working with the city, that they keep everyone up to date on what's going on, that they work with their city councilmember whose district they're in. So we make sure that this isn't a surprise to the city. Plus, the development is going through the city process for permitting and zoning, and for every approval that they need through the city, they're going through the city anyway. So this becomes more of the financing mechanism for the public improvements.
10:00 AMI would like for us to have a process for revisiting this issue of in-city pids. I think it raises a lot of issues. We've talked about it previously. I thought there was a general agreement that we were not going to allow more pids been the city -- within the city. I'd like a recommendation from staff to look at how we handle that.
10:01 AMYou raise a good point, to make sure that any public benefits that are required under city regulatory scheme not be considered a get y under the pid. We also stay in close contact with the city, keeping them informed, because after we create a pid, the city has 45 days -- 30 to veto it. So if we do something that the city doesn't like, they have a king's x to stop us from doing a pid within their city limits, completely valid. I totally support that. So we make sure that they're well aware if we take the vote today, they've got 30 days to tell us stop everything, we don't want you to move forward with that.
10:02 AMWhen is the moratorium over?
I know that staff have been working on a new pid policy. I just know that they have so much work right now. I don't know where it fits on their priority list.
I would be interested in recommendations from you all about how to include public concerns in this process. We've got -- and I know you guys are literally working overtime with all these pid proposals. It's an enormous crush of additional time required of you. But when the community comes forward and raises concerns like this, i'd like for us to have some process for at least addressing that and it sounds like we don't really have a mechanism for the public to be involved other than to come and speak at a hearing like this.
But the process is informal. I think that there are a couple of things that we're trying to balance. And first of all, I think that staff has done an exceptionally good job of putting a framework together that developers understand. We're looking at an area in this community that desperately needs multifamily, retail space, restaurant space, etc. They've pulled all those things together. And what we have been asking individually informally is for the community to come forward and talk about the cultural needs. Because I don't know that I want a developer from tim bucktu to talk about my cultural needs. We've got to create a platform so that our community talks about the particular things in this community that have been missing and that with we need. So that has been an informal process, but some of us have made sure that we're connected with staff, that we talk about where is the closest park, have you talked to the school district. We talked about how is this going to create the capacity that's necessary to bring public transportation into those areas. Can we standardize that? Yes. But I think that even though we worked on this informally, we've been very consistent working with our economic development staff and asking that these cultural aspects be brought into place. And I think the system is working like it's supposed to work, because our community has come in and said there are several other things that we need to consider. This is the time that should happen. Now, at the end of the day, the question becomes how formal do we want it to be. Do we want it to be a negotiation, or do we want it to be codified in a way that if somebody doesn't do it exactly a certain way, then it vetoes the process. I think that we want to have enough flexibility so that the commissioners in their areas and the community leaders in their areas are an integral part of that process. Now, how formal that becomes, i'm not sure. But I am confident that staff has done all of -- has put all the structural pieces in place. And i'm confident that we have community folks who are not going to let us forget that there's some cultural issues that have been avoided for a long period of time, have not been addressed properly, and need to be addressed now, so.
10:05 AMWe are in an interesting position doing a pid inside the city limits because we don't have the authority, statutorily, to build cultural centers as such. Although mostly what counties do is we create fertile soil, and then the community plants the seed. And I want to give big kudos to Commissioner Gomez, who's been working so hard on this particular pid, because it has the high probability of bringing the heb, finally, to that quadrant, as well as an adjacent site not part of this pid where acc is planning to locate a workforce development center. Which in partnership May become the kind of small business incubator -- the developer themselves, that's not their skill set. But that is acc's skill set with regard to a small business incubator. So continuing to partner and work these various synergies May be not within the context of a hard negotiation of an element within a development deal, but in the softer negotiations around the development to make sure that we have fertile ground for cultural space, for small business incubation, and for quality childcare if individuals are looking for four square walls -- you know, four walls and an appropriate place to have that childcare.
10:07 AMAnd central health and all those other public entities to make sure that cap metro is in the discussion. All of those entities that should be in the discussion, to create a venue for the community to talk about the types of things that we need.
And I don't know how many folks have been out that way between 73 and 130 recently. There is a beautifully laid bike path which, you know, at first glance you might think well, there's nobody out here to use it. Well, after this gets built, there will be. And that's part of tilling the soil and making it fertile for the kind of development and the kind of community we hope grows in that space on either side of 71 between 973 and 130.
10:08 AMNow, is heb going to count velocity crossing as a rooftop or several rooftops? [ laughing ]
Since they count rooftops.
They do. they have a business model and they don't go into places until they have a density to support their business. And we're trying to -- you are trying to encourage that.
Density. yeah. So we'll keep negotiating. We'll get you the backup. Anything else?
Yeah, I have a question. I don't know how we are tracking the projected ad valorem tax revenue from a project. But I noticed this one is projected to generate more than 14 million on build-out on an annual basis. Is that based on their analysis, or partially some financial due diligence we've done?
That's based on their analysis. Once the development gets started, we will be able to track it by parcel, through tcad, and so we'll be able to determine how much the value of that area has gone up.
10:09 AMSince this pid will give them the privilege to raise anywhere from 50 to 70 or maybe more million --
70 is the max under the petition. Once you have that on the petition, that's the max that you can raise as far as that goes.
I understand.
It's a ceiling that we have.
But that's real money.
Yeah, no. it's real money.
And one of the problems that we're seeing with the tax appraisal process is that the legislature has refused to fix the very large loopholes that provide a significant advantage for commercial and industrial property to challenge appraisals and essentially force appraisal districts to lower them because appraisal districts don't have the staff or the money to take all these cases to court. So i'd like to see staff develop some language -- since this is the first commercial pid -- we don't have it yet. But i'd like to see us develop some language that would include an agreement in exchange for commercial pid that the developers or owners would not challenge the appraisals for the duration of the pid.
10:10 AMWell, then you'll kill the deal. I mean --
Why -- it would be great if you would hike to explore -- like to explore that with the county attorney's office. I think there May be some legal impediments to curtailing somebody's right to protest.
I would like to explore that. my understanding is that in a contract, you can agree to almost anything. But i'd like to explore that because it's such a profound problem and it's forcing a growing problem on homeowners who are having to subsidize commercial properties.
I agree with Commissioner Daugherty that it's probable that from edci's analysis, no one would want a pid under that restriction. And I think it's also -- at least I think it's probable that also there would be some pretty significant legal considerations to curtailing someone's right to protest.
10:11 AMStaff -- attorney's office, i'd like to explore that. Thank you.
Any other questions? Commissioner Gomez, May we have a motion?
I move that we move forward to create the velocity crossing partner in development.
We have a motion and a second.

10:11 AMAnd I love that re-branding of the acronym. All those in favor? That passes unanimously.
Thank you.
Thank you so much. next our third public hearing, to receive comments regarding the request to authorize the filing of an instrument to vacate a public utility easement in easton park, subdivisions in precinct four.
10:12 AMOpen --
That's all, folks.
We have a motion and a second to open the fl public hearing. Good morning.
Good morning, anna bowlin, travis county tnr.