Austin City Council: Fixing a broken process for new development, tourism investments

The skyline of Austin, Texas. (Credit: Getty)

by: Grace Reader

Posted: Aug 31, 2023 / 05:42 AM CDT

Updated: Aug 31, 2023 / 11:28 AM CDT

AUSTIN (KXAN) — Austin City Council has a lengthy agenda Thursday, the first meeting back after finishing its budget approval process. Here’s some of what we’re watching:

Austin City Council postponed until Sept. 14 a vote on draft language from city staff to move forward with its proposed Austin Tourism Public Improvement District (ATPID) which has been in the works for years. Some council members cited extensive questions and concerns from community members regarding the proposal as presented Thursday.

The creation of that PID would generate money largely used to incentivize and attract new events and bring additional tourism to Austin alongside retaining existing events. That would include safety and homelessness improvements.

It would mostly be visitors who foot the bill. Hotels within Austin city limits that have 100 rooms or more would be taxed 2% of gross room revenue, “which reflects the special benefits accruing to the hotel properties because of the services provided by the ATPID funding,” the draft service plan says. Hotel owners would sign off on an ATPID petition and some would be on the board overseeing the PID.

If approved in September, the PID would be in place at a time when hotels are likely to lose business while the Austin Convention Center is being reconstructed. Council Member Ryan Alter noted Tuesday during council’s work session that the ATPID could bring in tourism that could help hotels make up for that business.

As it’s written now, the ATPID would last for a term of ten years. The city would need to go back to hotel owners and city council to continue collecting money through the PID at that point.

It was one of the major affordability platforms Mayor Kirk Watson ran on during his campaign: making it easier to develop new housing.

As a part of that, the City of Austin brought in a consulting firm to analyze its development site plan process. McKinsey and Company found the process is ineffective and city delays cost customers significant amounts of money.

For a single family home, the cost of development goes up $10,000 for every month of delay, the consultant group found. For multifamily developments, a month delay could cost more than $540,000. Meanwhile, nearly 80% of applicants surveyed said it took longer than a year to get a permit from the city.

“The City of Austin’s development review process is terribly inefficient and costly and has made our affordability crisis worse,” Watson wrote in his newsletter. “But, the good news: We’re gonna fix that.”

McKinsey and city leaders presented findings to Austin City Council Tuesday. On Thursday, council voted to allocate roughly $2.5 million to pursue solutions including making the process more transparent for applicants and making technology upgrades.

Right now in the City of Austin, Land Development Code (LDC) doesn’t require residential property owners to provide air conditioning. However, Austin City Council approved Thursday an item that will start the process of amending that.

The resolution asks the city manager to determine best implementation of the change and bring forward a draft ordinance to council by no later than August 2024.

The vote to extend a contract with Family Eldercare to continue renovations at the former Candlewood Suites hotel in northwest Austin will be postponed, according to Council Member Mackenzie Kelly. The facility is in her district.

The building is being reconstructed to serve as permanent supportive housing for more than 70 homeless, elderly and disabled people.

Documents say the delay comes after Family Eldercare “discovered significant issues with the structure of the building, including mold, drainage, and fireproofing issues.”

That property has been empty since city council approved its purchase — using 2018 affordable housing bond dollars — in 2021. In June 2022, Austin City Council approved a contract with Family Eldercare to operate the property.

“We are renewing the contract. We aren’t asking for more money, we are just requesting another green light to continue with this project,” said Dr. Aaron Alarcon, the CEO of Family Eldercare.

Alarcon said they expect to be done with construction around January of 2024 and to move people in shortly after. At that point Alarcon said the building will look “like a home for them, that is trauma informed, in a place that they can feel comfortable, where they can thrive.”

A group that has protested the hotel’s purchase and conversion for years, called MOVE Candlewood, expressed frustration about the extension, asking the city to do a better job communicating timelines and goals with neighbors in the area.

“We continue to oppose this awful location for a shelter and encourage the city to work with residents to come up with a competent, cost-effective, and accountable alternative,” the group said in a statement.

This story will be updated as council moves through items Thursday.

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