City Council is expected to vote next month to approve the legal documents that would create an economic development corporation, or EDC, that many members see as a remedy for threatened arts spaces, housing for the homeless and other real estate-related transactions.
At Tuesday’s work session city staffers said they expect to present the incorporation documents and bylaws to Council next month, with passage expected quickly to allow the EDC to get up and running and begin crafting deals that would take advantage of its structure as an entity that operates outside of city bureaucracy. Council members and the consultant hired to help guide the EDC’s creation pointed to the South Central Waterfront development project and a possible partnership involving Huston-Tillotson University as likely short-term priorities for the EDC, along with the possible purchase of existing music venues to prevent them from facing closure due to rental increases.
“I’m extremely concerned and have seen lots of concern out in social media and in other places about our venues’ survival. And as your report notes, projections are that as many as 90 percent of our venues might need to close during this period of time if they don’t receive some sort of assistance,” Council Member Kathie Tovo said. “I wonder … how quickly could they do that work and can we afford to wait with the economic development corporation to get up and running to really take action on that venue support.”
Council members questioned consultant Matt Kwatinetz on a number of finer points related to the EDC, including whether federal grant dollars would need to be matched, how much of city staff time and other resources could be used by the EDC, and how much autonomy it would have to enter into deals that would not have to be individually approved by Council.
Kwatinetz said the startup plan for the entity, which would have a board appointed by Council and a yearly contract to fulfill certain goals, would use existing money from the Economic Development Department for initial staffing. Within a handful of years it would begin to take in fees and other revenue from real estate deals, which could then be deployed into more projects based on Council’s direction.
“It’s not magic. It also is a city creature so there has to be some approvals that come from you to enable it. How broad those approvals are – they could be extremely broad once a year and the entity can run faster than you could believe,” he said. “Or you could keep a tighter leash and it would be much harder for the entity to do anything. But there’s no prohibition on the (local government corporation) from acquiring land. It can acquire it as fast as a private actor.”
Council Member Jimmy Flannigan said he wants to spend the coming weeks learning the specific ways the EDC would be allowed to enter into deals within the scope of Texas law, which is one reason the city itself has been unable to acquire potentially useful land quickly.
“I’m concerned that we’re building a structure that will still be hamstrung by the same challenges city staff faces in acquiring property, and we’ve seen that problem repeated over and over and over again,” he said. “I worry about a structure under Texas law won’t actually put us on equal footing with private market sectors, which means we won’t get the properties we want.”
One other potential use for the EDC is using the $12 million approved by voters for creative space preservation as front money for up to $100 million in land deals that could have a large impact on Council’s desire to save music venues from redevelopment.
“We’re already missing opportunities that some of our colleagues have already said. I think it brings three things that are critically important. It brings the ability to act quickly, speed, having a contract with the city government, and being able to be nimble and operate as quickly as the market operates,” Mayor Steve Adler said.
“Last is the ability to be able to leverage, being able to go from $12 million to $100 million potentially on the cultural, is an example of that, to take assets and move them across projects, and types of projects. There’s just a huge leveraging opportunity that we can’t otherwise do.”
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Council eyes September for EDC creation, with S. Congress and music venues as priorities - Austin Monitor
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