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[00:00:35]

OKAY.

YEAH.

[CALL TO ORDER]

GOOD EVENING FOLKS.

AND WELCOME TO THE FIRST IN-PERSON MEETING OF THE DOWNTOWN COMMISSION IN A YEAR AND A HALF.

IT'S GREAT TO SEE THE FACES THAT ARE HERE.

SOME NEW, SINCE THE LAST TIME WE WERE IN PERSON.

AND, UH, I'M DELIGHTED TO CALL THE MEETING TO ORDER IT IS 5:39 PM.

ON SEPTEMBER 15TH, AMANDA, WOULD YOU BE KIND ENOUGH TO CALL ROLL? YES, CHAIR.

SORRY.

UH, CHAIR HARRIS HERE.

VICE CHAIR, LAYMAN COMMISSIONER MEISENBACH COMMISSIONER CANOPY, COMMISSIONER ROBLEDO COMMISSIONER LICK TECH COMMISSIONER SHARE COMMISSIONER HAIM SET, RESIDENT COMMISSIONER KEATON, COMMISSIONER GOMEZ, COMMISSIONER RAMIREZ HERE.

COMMISSIONER, WHETHER BE COMMISSIONER TAYLOR, COMMISSIONER LEVINE, COMMISSIONER REIGN, COMMISSIONER TEMPLETON HERE, COMMISSIONER LUMON AND COMMISSIONER ROBINSON.

I BELIEVE.

UH, COMMISSIONER KEATON IS SHOWING UP ON THE SCREEN IS REMOTE.

I WAS ABOUT TO STAY ON HERE.

OKAY.

THANK YOU VERY MUCH.

ALL RIGHT.

UM, THE NEXT ITEM IS, UH, CITIZEN COMMUNICATION.

DO WE HAVE ANYBODY PRESENT FOR CITIZEN COMMUNICATION? THERE ARE NO CITIZENS SIGNED UP TO SPEAK TONIGHT CHAIR.

OKAY.

AND AS I REMEMBER THE RULES THAT CAME FROM THE CLERK'S OFFICE, ANYBODY THAT WANTS TO PRESENT AT THE COMMISSION MUST DO SO LIVE OR CAN THEY DO IT ONLINE AS WELL? UM, IT WAS THE LAST WORD RECEIVED FROM THE CITY CLERK'S OFFICE IS LIVE.

OKAY.

SO GOOD TO KNOW, UM, FOR ANYBODY WATCHING, IF YOU WANT TO COME DOWN AND ADDRESS THE COMMISSION, OR YOU WANT TO ADDRESS THE DOWNTOWN COMMISSION IN THE FUTURE, PLEASE MAKE SURE THAT YOU COME DOWN TO CITY HALL.

ALL RIGHT.

[1. Approval of Minutes of the August 18, 2021 Meeting Minutes]

THE, UH, NEXT ITEM IS THE APPROVAL OF THE MINUTES FROM THE AUGUST 18TH, 2021 MEETING.

UH, HAS EVERYBODY HAD A CHANCE TO REVIEW THE MINUTES? IS, DO I HAVE A MOTION TO APPROVE THE MINUTES? COMMISSIONER? MEISENBACH DO I HAVE A SECOND? OKAY.

THANK YOU, COMMISSIONER.

WE HAVE A MOTION TO SECOND, ANY FURTHER DISCUSSION HEARING? NONE.

ALL IN FAVOR, PLEASE SAY AYE.

OPPOSED HEARING NONE.

THE MOTION CARRIES.

ALRIGHTY.

WE'LL MOVE STRAIGHT INTO NEW

[2.a. Downtown Density Affordable Housing Program: Presentation by Sam Tedford, Housing and Planning Department]

BUSINESS.

UH, THE FIRST ITEM OF BUSINESS TONIGHT IS THE DOWNTOWN DENSITY AFFORDABLE HOUSING PROGRAM.

WE HAVE SAM TEDFORD WITH HOUSING AND PLANNING DEPARTMENT.

SAM, YOU HAVE THE FLOOR.

THANK YOU, COMMISSIONER.

AND DOES, UH, CITY HALL HAVE MY SLIDE DECK OR SHOULD I TRY AND PRESENT, UH, SAM, WE DO HAVE YOUR PRESENTATION.

WOULD YOU PREFER TO PRESENT THAT WAY? OTHER WAY WORSE FOR ME, I, AT THIS POINT, DON'T HAVE THE PERMISSION TO SHARE CONTENT ON WEBEX, BUT CAN I CAN PUT IT IN PRESENTER MODE FOR YOU OR I CAN DO NEXT SLIDE, WHICHEVER YOUR PREFERENCE IS.

IF YOU HAVE IT PULLED UP, I CAN, I CAN JUST, UH, GIVE YOU DIRECTION ON NEXT SLIDE OR NOT.

STANDBY ONE SECOND.

PERFECT.

ARE YOU ALL ABLE TO SEE THE SLIDES ON YOUR SIDE? YES.

GREAT.

THANK YOU SO MUCH COMMISSIONERS AND GOOD EVENING.

MY NAME IS SAM TEDFORD.

I'M A PRINCIPAL PLANNER IN THE HOUSING AND PLANNING DEPARTMENT IN THE NEWLY FORMED INCLUSIVE PLANNING DIVISION.

AND I AM HERE TO PROVIDE A BRIEFING ON A RECENT RESOLUTION REGARDING THE DOWNTOWN DENSITY BONUS PROGRAM.

UM,

[00:05:01]

AND AS YOU KNOW, THAT PROGRAM WAS ORIGINALLY PASSED IN THE YEAR 2014.

AND NEXT SLIDE, PLEASE TONIGHT, I'LL BE JUST DISCUSSING A COUPLE OF THE OTHER PARTS OF THE RESOLUTION, UH, PASS BACK IN APRIL 22ND.

JUST THIS YEAR.

UH, I'LL DISCUSS SOME OF OUR DRAFT FEES THAT ARE ON THE TABLE.

UH, I'LL DISCUSS A LITTLE BIT OF WHAT GOES INTO THE FEE CALIBRATION, AND THEN THERE'S A FEW DISCUSSION ITEMS, UM, ABOUT THE DOWNTOWN GOOD STEEP BONUS PROGRAM AND OUR GOALS WITH THIS PROGRAM AND THEN SOME OF OUR NEXT STEPS.

NEXT SLIDE, PLEASE.

I BELIEVE IN YOUR LAST MEETING YOU HEARD FROM MY COLLEAGUE WHO PRESENTED ON ONE PIECE OF THIS RESOLUTION FROM BACK IN APRIL, THAT WAS, UH, SPECIFICALLY ABOUT THE FLOOR AREA RATIO OR FAR POLICY IN THE CURRENT DOWNTOWN DID BONUS PROGRAM.

UM, AND I WILL NOT BE SPEAKING TO THAT PIECE TODAY.

I WILL BE SPEAKING THOUGH TO THESE NEXT TWO PIECES, WHICH WERE REGARDING INTERIM REVISIONS TO THE, IN LIEU AFFORDABLE HOUSING FEES FOR THE DOWNTOWN DENSITY BONUS PROGRAM, AND THEN THE RECALIBRATION OF THOSE FEES.

NEXT SLIDE PLEASE.

SO THE FIRST PIECE OF THIS RESOLUTION THAT I'M SPEAKING TO, UH, TOLD US THERE IT IS.

OKAY.

TOLD US TO DO A COUPLE OF THINGS.

IT TOLD US TO PASS INTERIM REVISIONS TO THE, IN LIEU OF AFFORDABLE HOUSING FEES, UH, FOR BOTH RESIDENTIAL AND NON-RESIDENTIAL DEVELOPMENT IN THE DOWNTOWN DENSITY BONUS PROGRAM.

AND ALSO TO MOVE THOSE FEES INTO THE CITY'S FEE SCHEDULE SO THAT THEY CAN BE UPDATED MORE EFFECTIVELY.

THIS PIECE OF THE RESOLUTION IS COMPLETE.

UM, AND IF YOU'LL GO TO THE NEXT SLIDE, THIS PIECE OF THE RESOLUTION WAS COMPLETED WITH AN ORDINANCE I DIDN'T LIST ON HERE, BUT IT PASSED BACK IN MAY OF THIS YEAR WHERE WE ASKED THESE INTERIM FEES THAT WERE BASED ON PREVIOUS WORK BY AN ECONOMIC CONSULTANT TEAM CALLED ECO NORTHWEST.

THAT, UM, WAS PART OF THE WORK OF THE LAND DEVELOPMENT CODE REVISION AT THE TIME.

AND SO THESE FEES WERE ACKNOWLEDGED TO BE INTERIM BECAUSE THEY WERE BASED ON A SLIGHTLY DIFFERENT SET OF PARAMETERS THAN OUR CURRENT CODE TODAY.

THEY WERE ALSO PASSED USING OUR PAST, EVEN THOUGH THEY WERE BASED ON KIND OF MARKET DYNAMICS FROM LATE 2019, AND A LOT, A LOT HAS HAPPENED SINCE 2019.

UM, AND THEY HAD A FEW KEY DIFFERENCES IN HOW WE WOULD GO ABOUT DOING THAT CALIBRATION BASED ON TODAY'S CODE AS WELL.

UM, BUT THOSE FEES WERE PASSED BACK IN MAY.

AND NOW I'M GOING TO SPEAK TO THE NEXT SLIDE, WHICH ASKS US TO ALSO UPDATE THAT THEME LOOM ANALYSIS, UH, THAT WAS ORIGINALLY DONE, BUT YOU GO NORTHWEST AND, UH, REFLECT CURRENT MARKET CONDITIONS IN THE EXISTING ZONES OF THE LAND DEVELOPMENT CODE.

WE ARE A BIT PAST THAT ORIGINAL DATE, BUT WE ARE ON TRACK TO PRESENT THE STAFF RECOMMENDATION FOR THESE FEES TO COUNCIL ON SEPTEMBER 30TH.

NEXT SLIDE PLEASE.

SO THOSE CALIBRATED FEES RIGHT HERE, I'M SHOWING THE INTERIM FEES AGAIN, AND I AM JUST GOING TO GIVE YOU SOME INDICATION OF DIRECTIONALITY OF WHAT OUR RECALIBRATION WORK HAS TOLD US IN REGARDS TO THESE FEES.

BEFORE I DIVE INTO WHAT CALIBRATION OF IN LIEU FEES MEANS FOR DOWNTOWN, UM, WE KNOW QUITE A FEW THINGS HAVE CHANGED SINCE 2019 AND THAT WAS WHAT THOSE INTERIM FEES WERE BASED ON.

UM, WE HAVE SEEN INCREASED CONSTRUCTION COSTS DUE TO A VARIETY OF FACTORS AND LARGE SCALE EVENTS THAT HAVE IMPACTED TEXAS AND OUR LOCAL MARKET.

UM, WE'VE ALSO SEEN INCREASED CONDO SALES PRICES.

UM, IT IS PROBABLY NO SHOCK TO ANYONE THAT HOUSING PRICES HAVE GONE UP EVERYWHERE IN THE CITY SINCE 2019, BUT THAT HOLDS TRUE TO THE DOWNTOWN NEIGHBORHOOD AS WELL.

UM, THOSE INLAND FEES ARE THE INTERIM FEES THAT WERE PASSED WERE ALSO BASED ON A FEW PROPOSED, UM, CODE CHANGES THAT WERE ROLLED UP INTO THE LAND DEVELOPMENT CODE REVISION.

ONE OF THEM WAS THE PROPOSAL TO INCLUDE A PARKING MAXIMUM DOWNTOWN.

AND, UH, WE HEARD FEEDBACK AT THAT TIME FROM STAKEHOLDERS THAT IF WE IMPOSE A PARKING MAXIMUM THAT WAS LOWER THAN PARKING DEMAND TODAY, THEN WE WOULD NEED TO REDUCE THE PROJECTED SALES PRICES THAT GO INTO OUR MODELING.

AND SO THOSE INTERIM FEES REFLECT AN ARTIFICIAL CAP ON SALES PRICES THAT DOES NOT EXIST IF THERE IS NOT, UM, A PARKING MAXIMUM DOWNTOWN TODAY, WHICH, UH, DOES NOT EXIST IN OUR CURRENT CODE.

SO FOR ALL OF THOSE REASONS, WHEN WE LOOKED AT CALIBRATING THESE FEES TO CURRENT MARKET CONDITIONS, WE SAW THAT RESIDENTIAL DEVELOPED THE FEES FOR RESIDENTIAL DEVELOPMENT COULD BE QUITE A BIT HIGHER THAN THE INTERIM FEES TOLD US.

[00:10:01]

BUT WHEN WE TRANSITIONED TO LOOKING AT THE COMMERCIAL MARKET DOWNTOWN, WE'VE SEEN A DECREASE IN THE PAST COUPLE OF YEARS, UM, IN MO MARKET OFFICE RENTS.

UH, AND AT THE SAME TIME, WE'VE SEEN AN INCREASE IN OPERATING COSTS, BOTH FROM, UH, CONTINUE RISING A PROPERTY TAXES, BUT ALSO TO CERTAIN SITE CONDITIONS, UH, DUE TO THE PANDEMIC THAT HAVE INCREASED OPERATING COSTS DOWNTOWN.

AND FOR THOSE REASONS WE DON'T BELIEVE AT THIS TIME THAT THE INTERIM FEES THAT WERE PASSED FOR NON RESIDENTIAL OR COMMERCIAL DEVELOPMENT ARE SUPPORTED BY CURRENT COMMERCIAL MARKET CONDITIONS TODAY, NEXT SLIDE.

AND SO, UNFORTUNATELY WE ARE STILL IN THE MIDDLE OF FINALIZING THESE FEES.

UM, OUR CITY MANAGER'S OFFICE IS REVIEWING THEM AND WE HOPE TO HAVE OUR FINALIZED STAFF RECOMMENDATION BY THE END OF THIS WEEK, IT WILL BE PROVIDED AS BACKUP FOR THE COUNCIL AGENDA ITEM POSTED FOR SEPTEMBER 30TH, AS I MENTIONED BEFORE.

UM, AND SO AT THIS POINT I CAN SAY THAT, YOU KNOW, AS I PREVIOUSLY INDICATED, WE THINK RESIDENTIAL FEES WILL BE GOING UP BASED ON WHAT THE, OR, UM, YEAH, BASED ON THE INTERIM FEES, BUT WE THINK COMMERCIAL FEES WILL BE GOING DOWN, UM, BASED ON THE CURRENT MARKET CONDITIONS.

UM, WE HAVE THROUGH THE PROCESS OF CALIBRATION MET WITH SOME KEY STAKEHOLDERS IN THIS AREA, WHICH ARE OUR DOWNTOWN AUSTIN ALLIANCE AND THE REAL ESTATE COUNCIL OF AUSTIN WE'VE INCORPORATED THEIR FEEDBACK.

WE HAVE, UM, THEY HAVE BEEN VALUABLE PARTNERS FOR US AND UNDERSTANDING THE MARKET CONDITIONS IN DOWNTOWN TODAY AND THE TYPES OF THINGS THAT ARE IMPACTING CONSTRUCTION IN DOWNTOWN.

AND AT THE SAME TIME, UH, WE ARE GOING TO BE RECOMMENDING A STAFF THAT WE REVISIT THESE FEES AGAIN, NEXT FISCAL YEAR DUE TO JUST HOW MUCH UNCERTAINTY THERE IS IN THE COMMERCIAL MARKET TODAY.

UM, I'VE HEARD FROM MANY FOLKS WHO WORK IN OFFICE DEVELOPMENT TYPICALLY IN THE DOWNTOWN AREA, BUT THERE'S KIND OF A HOLDING PATTERN RIGHT NOW WHERE FOLKS ARE TRYING TO UNDERSTAND THE FUTURE DEMAND FOR OFFICE SPACE DOWNTOWN AND IN THIS PERIOD WHERE WE'RE TRYING TO SEE HOW, YOU KNOW, THE RISE OF REMOTE WORK PLAYS OUT.

THERE'S A LOT OF UNCERTAINTY IN THE POTENTIAL DEMAND OF OFFICE SPACE DOWNTOWN.

AND SO FOR THAT REASON, WE THINK IT'S IMPORTANT TO CHECK IN ON THESE FEES, UM, PRETTY REGULARLY UNTIL THERE'S A BIT MORE OF A CLEAR PATH OR TRAJECTORY FOR OFFICE, UH, DEMAND DOWNTOWN.

UM, SO WE INTEND TO PASS A FEE THIS YEAR THAT WILL BE LOWER THAN THAT INTERIM FEE FROM BACK IN MAY.

UM, BUT WE WILL REASSESS IN ABOUT A YEAR'S TIME IS OUR GOAL.

NEXT SLIDE PLEASE.

ALL RIGHT.

AND ONE MORE SLIDE.

I'LL JUST BE SPEAKING A BIT ABOUT WHAT IT MEANS WHEN WE CALIBRATE THESE FEES.

THESE ARE NOT FEES THAT, UM, LOOK LIKE A LOT OF OTHER FEES THAT THE CITY OF AUSTIN, UM, APPROVES AND THAT'S BECAUSE THEY'RE ASSOCIATED WITH A DENSITY BONUS PROGRAM.

AND SO I CAN SPEAK A LITTLE BIT TO WHAT WE HAVE TO CONSIDER WHEN WE'RE TUNING OR CALIBRATING A DENSITY BONUS PROGRAM.

SO BEFORE I GET INTO SORT OF WHAT IT MEANS TO HAVE A DENSITY BONUS PROGRAM, I JUST WANTED TO SHOW THIS DIAGRAM TO BROADLY HIGHLIGHT THE VARIETY OF THINGS THAT HAVE TO COME TOGETHER AND BE IN ALIGNMENT BEFORE DEVELOPMENT CAN OCCUR.

SO THERE HAS TO BE VIABLE SITES FOR LAND.

THERE HAS TO BE A CAPITAL AND THAT HAS TO BE ATTRACTED, UM, WITH RETURNS ON THOSE CAPITAL INVESTMENTS.

THE MARKET FEASIBILITY HAS TO BE THERE.

UM, YOU HAVE TO SEE RENTS OR SALES PRICES THAT WILL COVER YOUR OPERATING AND CONSTRUCTION COSTS.

AND THEN THE PIECE THAT WE AS THE CITY OF BOSTON AND HE WAS A COMMISSION AND THE CITY COUNCIL WEIGH IN ON IS THE PUBLIC POLICY THAT CAN INFLUENCE ALL OF THESE FACTORS.

UM, BUT I SHOW THIS BECAUSE IT'S IMPORTANT TO NOTE THAT OUR POLICY CANNOT CHANGE THE FEASIBILITY OF DEVELOPMENT.

IF THESE OTHER THREE PIECES ARE NOT IN ALIGNMENT AND ARE NOT, UM, ARE NOT HAPPENING.

AND SO FOR THAT REASON, WE CANNOT CONTROL THE FULL REALM OF WHEN A DEVELOPMENT OCCURS, WHERE IT DOES NOT OCCUR.

UH, NEXT SLIDE PLEASE.

AND A BIT OF A REFRESHER, IF YOU'RE UNFAMILIAR, WHY IN AUSTIN, WE UTILIZE DENSITY BONUS PROGRAM.

SO MUCH PART OF IT IS DEFINITELY BECAUSE IN TEXAS, OUR LAWS PREVENT MOST TYPES OF INCLUSIONARY ZONING THAT IS, WILL WE MANDATE OR REQUIRE THE INCLUSION OF BELOW MARKET RATE OR INCOME RESTRICTED OR RENT RESTRICTED HOUSING.

UM, HOWEVER, WE DO HAVE THE ABILITY TO USE AN INCENTIVE-BASED PROGRAM TO CREATE AFFORDABLE HOUSING WITHOUT DIRECT PUBLIC SUBSIDIES.

AND THAT IS WHAT WE USE THESE DENSITY BONUS PROGRAMS FOR.

UM, AND SO BY DEFINITION, THE DOWNTOWN DENSITY BONUS PROGRAM IS A VOLUNTARY PROGRAM.

WE CANNOT REQUIRE PARTICIPATION IN THE DOWNTOWN DENSITY BONUS

[00:15:01]

PROGRAM.

UM, AND WE REQUIRE, WE RELY ON AN INCENTIVE BASED APPROACH TO HAVE THE PRIVATE MARKET DELIVER COMMUNITY BENEFITS FOR US.

AND IF YOU'RE FAMILIAR WITH THE DOWNTOWN DENSE PEOPLE IN HIS PROGRAM ORDINANCE, THERE IS AN ARRAY OF COMMUNITY BENEFITS THAT WERE ASKING DEVELOPMENTS TO PROVIDE DOWNTOWN THAT EXTEND BEYOND JUST AFFORDABLE HOUSING, BUT I'LL BE SPEAKING MOSTLY TO THE AFFORDABLE HOUSING PIECE.

UM, WE EMPLOY.

AND SO IN ORDER TO UNDERSTAND WHAT WOULD BE CONSIDERED AN INCENTIVE TO PARTICIPATING IN THIS PROGRAM, WE HAVE TO EMPLOY SOME OF THE SAME FINANCIAL CONSIDERATIONS, A REAL ESTATE DEVELOPER WOULD USE TO EVALUATE THE VALUE OF BONUS ENTITLEMENTS COMPARED TO BASE ENTITLEMENTS, BECAUSE WE KNOW IF THERE'S NO INCENTIVE TO PARTICIPATE IN A BONUS PROGRAM, THAT MEANS THERE ARE NO BONUS UNITS MARKET RATE OR AFFORDABLE.

AND NONE OF THE OTHER COMMUNITY BENEFITS THAT ARE TIED UP WITH THIS BONUS PROGRAM WOULD ALSO BE PROVIDED.

AND SO THAT IS WHY WE TAKE SOME VERY CAREFUL CALIBRATION WORK, UM, IN ORDER TO MAXIMIZE THE PUBLIC BENEFITS AND ACHIEVE OUR POLICY GOALS.

UM, WE HAVE TO ENSURE THAT THERE IS A DEVELOPMENT BENEFIT ON THE TABLE.

OTHERWISE WE WON'T RECEIVE THOSE PUBLIC BENEFITS THAT ARE PART OF THE PROGRAMS, UM, GUIDELINES AS WELL.

NEXT SLIDE PLEASE.

SO THIS IS JUST A VERY HIGH LEVEL CONCEPTUAL, UH, WAY TO TALK ABOUT, UM, WHAT THE CALIBRATION OF DENSITY BONUS PROGRAMS ENTAILS.

WE NEED TO HAVE A WAY OF UNDERSTANDING THE VALUE OF BUILDING TWO BASE ENTITLEMENTS, UM, BECAUSE THAT IS BY RIGHT.

THOSE ARE BY RIGHT ENTITLEMENTS.

THIS IS WHAT A DEVELOPMENT COULD BUILD WITH OR WITHOUT OUR APPROVAL, UM, W IN TERMS OF THE BONUS ENTITLEMENTS.

UM, AND THEN WE HAVE TO UNDERSTAND THE VALUE OF BUILDING TO BONUS ENTITLEMENTS.

YES, WE KNOW THAT, YOU KNOW, AS YOU GET ADDITIONAL HEIGHT OR FIR OR DENSITY, UM, THERE'S POTENTIALLY ADDITIONAL BONUS VALUE FROM INCOME, BUT THERE'S ALSO ADDITIONAL RISK IN BUILDING BIGGER.

THERE IS ALSO INCREASED CONSTRUCTION COSTS WHEN YOU BUILD BIGGER.

SO WE NEED TO BE ABLE TO EVALUATE THAT VALUE OVERALL FOR WHAT OUR BONUS ENTITLEMENTS PROVIDE.

AND THEN WE TAKE A PORTION OF THAT ADDED VALUE OF OUR BONUS AND DIRECT IT TOWARDS A PUBLIC BENEFIT.

IN THIS CASE, WE'RE TALKING ABOUT, UM, AFFORDABILITY, AFFORDABLE HOUSING OR AN IN LIEU FEE.

WE KNOW THAT, UH, OH, AND WE HAVE TO LEAVE A PIECE THAT IS WHY WE ONLY TAKE A PORTION OF THE BONUS VALUE AND DIRECTED TOWARDS PUBLIC BENEFIT.

BECAUSE LIKE I MENTIONED EARLIER, IF THERE IS NOT AN INCENTIVE TO BUILD BIGGER, UM, WE CANNOT GUARANTEE THAT WE WILL GET THOSE PUBLIC BENEFITS, UM, AND PARTICIPATION IN THE BONUS PROGRAM.

NEXT SLIDE PLEASE.

AND SO WE KNOW THAT IF WE SET OUR REQUIREMENTS TOO HIGH, IF THE PUBLIC BENEFIT COSTS TOO MUCH TO PROVIDE THEM, WE'RE ACTUALLY NOT PROVIDING AN INCENTIVE.

THERE'S A DISINCENTIVE FOR A DEVELOPER TO BUILD IN THE BONUS ENTITLEMENTS AND UTILIZE OUR BONUS PROGRAM.

AND SO WE DON'T GET ADDITIONAL MARKET RATE OR AFFORDABLE UNITS.

WE DON'T GET THINGS LIKE OUR GATEKEEPER REQUIREMENTS AND THE DOWNTOWN AND SPEED BONUS PROGRAM, OR ANY OTHER, ANY OF THE OTHER NUMEROUS COMMUNITY BENEFITS LISTED IN THE DOWN TENDENCY BONUS PROGRAM ORDINANCE.

ALL RIGHT, NEXT SLIDE.

AND ONE MORE.

AND SO THAT IS OUR GOAL AS STAFF.

UM, WHEN WE ARE LOOKING AT CALIBRATING THESE, UH, FEES, WE ARE HOPING TO MAXIMIZE THE COMMUNITY BENEFIT.

AND WHEN WE TALK ABOUT A FEE IN LIEU OF ONSITE AFFORDABLE HOUSING, UM, BY CODE THOSE FEES IN LIEU ARE SPECIFICALLY DIRECTED TOWARDS LOW BARRIER APPROACHES TO HOUSING PEOPLE WHO ARE CHRONICALLY HOMELESS, WHICH HAS BEEN INTERPRETED FOR THE MOST PART BY CITY, BY THE CITY TO MEAN HOUSING VOUCHERS FOR FOLKS WHO'VE EXPERIENCED HOMELESSNESS.

SO IT IS GETTING FOLKS WHO HAVE BEEN HOMELESS INTO HOUSING IS WHAT THESE FEES GO TOWARDS.

THERE ARE STILL ONSITE AFFORDABLE HOUSING REQUIREMENTS, UM, IN, IN THE DOWNTOWN, UM, DENSITY BONUS PROGRAM, THE RAINY STREET DENSITY BONUS, UH, THE RAINEY STREET DISTRICT HAS AN ONSITE REQUIREMENT IN ADDITION TO THE ABILITY TO PAY FEES AND LU.

UH, BUT WE ALSO SEE SOME DEVELOPMENTS IN, IN OTHER DISTRICTS OF DOWNTOWN, EXCLUSIVELY PROVIDING FEES IN LIEU OF AFFORDABLE HOUSING.

UM, SOMETIMES THAT'S BECAUSE IT'S A COMMERCIAL OR A NON-RESIDENTIAL PROJECT.

AND SO IF THERE'S NOT HOUSING ON SITE, THEN THEY NEED AN OPTION TO BE ABLE TO PAY FOR THEIR REQUIREMENT, UM, AS A FEE.

AND SOMETIMES WE ALSO SEE HOUSING PROJECTS THAT, UM, STILL ELECT TO PROVIDE FEES IN LIEU OF AFFORDABLE HOUSING INSTEAD OF PROVIDING THE AFFORDABLE HOUSING COMMUNITY BENEFIT ON SITE AND IN THE DOWNTOWN DENSITY BONUS PROGRAM.

IT'S MY UNDERSTANDING THAT THAT HAS BEEN THE PREFERRED ROUTE THAT A LOT OF DEVELOPERS DOWNTOWN GO, UM,

[00:20:01]

THAT IS NOT HOW ALL OF OUR DENSITY BONUS PROGRAMS WORK.

THERE ARE IN OTHER AREAS OF REQUIREMENT OR A STRONG PREFERENCE TO PROVIDE THOSE UNITS ONSITE.

UM, BUT THAT HAS NOT BEEN THE PREFERENCE IN DOWNTOWN HAS BEEN FAIRLY OPEN, UM, TO EITHER FEASIBLY OR ONSITE.

UM, WE ALSO KNOW THAT WE'D LIKE TO KEEP FLEXIBILITY AND RESILIENCE IN THIS PROGRAM TO ACCOUNT FOR FLUCTUATIONS IN THE MARKET.

UNFORTUNATELY, IN THE PAST TWO YEARS HAVE BEEN VERY BUMPY AND FULL OF A LOT OF UNCERTAINTY AND CHANGES TO OUR, UM, NOT JUST DOWNTOWN, BUT OUR, YOU KNOW, HOUSING MARKET AND OUR COMMERCIAL MARKET.

AND SO FOR THESE REASONS, WE NEED TO MAKE SURE THAT OUR PROGRAM HAS SOME FLEXIBILITY SO THAT, UM, IT CAN STILL SUCCEED AND PROVIDE BONUS AFFORDABLE HOUSING OR MARKET RATE UNITS, EVEN IN THE EVENT OF PRETTY RAPIDLY EVOLVING DEVELOPMENT CONDITIONS.

UM, BUT THAT'S ALSO A REASON WHY STAFF IS ADVOCATING FOR MORE FREQUENT RECALIBRATION, AT LEAST IN THE NEAR TERM.

UM, BEFORE THIS YEAR, THE LAST TIME THESE FEES HAD BEEN EVALUATED WAS 2014 WHEN THE DOWNTOWN WICKI BONUS PROGRAM ORDINANCE WAS INITIALLY PASSED.

AND SO WE THINK MUCH MORE FREQUENT THAN THE SEVEN TO 10 YEARS, BUT IT REALLY HAS BEEN, UM, BUT, UH, YOU KNOW, GOING FORWARD, WE THINK ANNUALLY FOR NOW, WE ALSO KNOW THAT IN REALLY SHIFTING THESE FEES, UM, CAN BE PRETTY TRICKY TO PLAN AROUND WHEN THEY CAN, UM, SEE SOME MAJORS, UH, SHIFTS OVER TIME.

SO WE ALSO WANT TO PROVIDE PREDICTABILITY FOR PROJECTS TO PLAN AROUND WITH THESE FEES, UM, AND STILL MAKE SURE THAT WE'RE NOT DISINCENTIVIZING DEVELOPMENT BY, UH, KEEPING OUR COMMUNITY BENEFIT REQUIREMENTS TOO HIGH, OR ACTUALLY MORE, UM, THEY'RE ASKING MORE OF A DEVELOPMENT THAN WHAT THE ACTUAL BONUS ENTITLEMENT VALUE IS.

AND SO THOSE ARE THINGS THAT WE ARE CONSIDERING.

AND LAST SLIDE, PLEASE.

SO OUR NEXT STEPS ARE WE WILL BE ALSO PRESENTING TO THE DESIGN COMMISSION AT THE END OF THIS MONTH.

UM, AS I MENTIONED BEFORE, WE ARE UNFORTUNATELY NOT QUITE FINALIZED ON OUR STAFF RECOMMENDATION.

IT SHOULD BE FINALIZED THIS WEEK.

AND SO, UM, THE FINAL STAFF RECOMMENDATION WILL BE SHARED BY FRIDAY, SEPTEMBER 17TH DESIGN COMMISSION.

AND WE ARE ON THE COUNCIL AGENDA FOR ACTION ON SEPTEMBER 30TH.

UH, IF YOU HAVE QUESTIONS IN THE NEAR TERM, UM, ERICA WEEK OR MYSELF, UH, IN HOUSING AND PLANNING DEPARTMENT ARE AVAILABLE TO ANSWER QUESTIONS, AND YOU CAN ALSO LEARN MORE ABOUT, UM, THE CALIBRATION MODEL THAT WE'VE BEEN USING AND THE WORK OF THE ECONOMIC CONSULTANTS, ECO NORTHWEST, UM, BY VISITING THE DEVELOPMENT INCENTIVES PAGE ON THE CITY OF BOSTON WEBSITE.

AND WITH THAT, I WILL CONCLUDE MY PRESENTATION.

THANK YOU FOR YOUR TIME.

THANK YOU VERY MUCH.

UH, COMMISSIONERS QUESTIONS, COMMISSIONER LEVINE, THANKS FOR THAT PRESENTATION.

UM, Y OH, YOUR QUESTION IS JUST, WELL, FIRST OF ALL, LET ME CLAUDE THAT.

I'M SORRY.

UM, MY QUESTION IS WHAT CAN WE DO TO ADDRESS THE ISSUE YOU PRESENTED ABOUT PEOPLE BEING LU LU IN LIEU OF DOWNTOWN? WHAT CAN WE DO TO ENCOURAGE THAT YOU MAKE THEM BE A LOOSE? SO IT'S LOOKING AT THE BETTER DEAL DOWNTOWN.

OH, THEY'RE RIGHT HERE.

WELL, HELLO.

UM, SHOULD I START OVER? OKAY.

THANK YOU FOR THE PRESENTATION.

THAT WAS AWESOME.

UM, AND, UH, I REALLY APPRECIATE THAT Y'ALL ARE GONNA READDRESS THIS IN A YEAR BECAUSE OF THE VOLATILITY AND EVERYTHING.

I THINK THAT'S VERY WISE.

UM, MY QUESTION IS REGARDING WHAT YOU HAD MENTIONED ABOUT DEVELOPERS OPTING MOSTLY FOR FEE AND LU AS OPPOSED TO BUILDING AFFORDABLE HOUSING DOWNTOWN.

I THINK WE ALL AGREE THAT WE NEED MORE AFFORDABLE HOUSING DOWNTOWN, AND I'M WONDERING WHAT WE CAN DO TO MAKE THE FEE IN LIEU LESS ATTRACTIVE AND ENCOURAGE MORE OF THAT BUILDING DOWNTOWN.

I APPRECIATE THE NEED FOR THE HOUSING VOUCHERS.

I APPRECIATE THE NEED FOR THAT FUND TO GROW, BUT I THINK THERE'S PLENTY OF OTHER WAYS TO DO THAT PROBABLY.

AND WE COULD, UM, ACTUAL HOUSING DOWNTOWN.

SO I'M WONDERING WHERE Y'ALL'S HEAD IS IN TERMS OF TRYING TO TACKLE THAT ISSUE IN THE FUTURE.

THANKS.

YEAH.

THANK YOU, COMMISSIONER.

I DIDN'T CATCH WHICH COMMISSIONER WAS SPEAKING,

[00:25:02]

MIKE LIVING MY PLUMBING.

THANK YOU.

AND THANK YOU FOR YOUR QUESTION.

IT'S IT'S A GOOD ONE.

UM, LIKE I SAID, THERE ARE OTHER DEBTS BE BONUS PROGRAMS IN THE CITY WHERE WE DO FURTHER EMPHASIZE THE DESIRE TO HAVE ONSITE AFFORDABLE HOUSING, UM, THAT HAS NOT BEEN DIRECTION THAT WE'VE REALLY BEEN PROVIDED FOR THIS PARTICULAR PROGRAM.

BUT IF WE WERE TO MOVE IN THAT DIRECTION, THERE ARE A COUPLE OF WAYS THAT WE DO THAT IN OTHER PROGRAMS. AND SO I KIND OF HAVE THAT CHART THAT SHOWED, UM, YOU KNOW, THE ADDED VALUE OF A BONUS, AND THEN WE'RE TAKING A PERCENTAGE OF IT AND DIRECTING IT TOWARDS OUR, WHATEVER THE COMMUNITY BENEFIT IS.

AND WE'RE LEAVING A PERCENTAGE OF IT ON THE TABLES FOR THE DEVELOPER AS AN INCENTIVE.

AND SO IN DOWNTOWN, WE'RE TAKING 50% OF THAT VALUE OF THE BONUS, THE UPSIDE OF THE BONUS ENTITLEMENTS AND DIRECTING THAT TOWARDS, UM, A FEE OR ON-SITE PROVISION OF AFFORDABLE HOUSING.

UM, WHEN WE TYPICALLY WANT TO INCENTIVIZE ONSITE, WE CAN MOVE THAT TO 75% OF THE ADDED VALUE OF THE BONUS GOES TOWARDS A FEE.

AND YET WE KEEP SOMETHING LIKE 50% FOR ONSITE AFFORDABLE HOUSING.

AND SO THAT'S WHERE WE COULD SEE LIKE KIND OF PUSHING A LITTLE BIT HARDER TO GET, UM, ON-SITE AFFORDABLE HOUSING.

SO THAT IS ONE DIRECTION THAT, UM, WE COULD GO.

UM, IF WE HAD DIRECTION I SUPPOSE, AROUND THAT, UM, OTHERWISE IT'S ALSO HARD DOWNTOWN TO PROVIDE ONSITE AFFORDABLE HOUSING WE'VE SEEN IN DEVELOPMENTS LIKE FOR SALE CONDO DEVELOPMENTS DOWNTOWN, THAT WE CAN INCOME RESTRICT THE FOR SALE PRICE LIKE WE WOULD DO, UM, IN OTHER DENSITY BONUS PROGRAMS, BUT THE HOMEOWNERS ASSOCIATION FEES ARE SO LARGE AND OUTSIDE THE CITY'S ABILITY TO CONTROL OR IMPACT THAT IT COMPLETELY EXCEEDS THAT THE HOUSING, UM, BUDGET THAT WE ALLOW FOR A HOUSEHOLD THAT HAS A PARTICULAR INCOME.

AND SO, UM, YOU KNOW, IF WE'RE SAYING THAT A HOUSING OR A HOUSEHOLD THAT IS MAKING 80% OF THE MEDIAN FAMILY INCOME IS SUPPOSED TO BE ABLE TO PAY THIS MUCH, TO BUY THIS TYPE OF HOUSING UNIT, WE SET THAT, AND THEN THE HOMEOWNERS ASSOCIATION MONTHLY FEE MAKES IT COMPLETELY UNAFFORDABLE FOR THAT FAMILY TO STILL LIVE IN THAT UNIT.

AND SO FOR THAT REASON, UM, WE HAVE KEPT THE IN LIEU FEE AS, UH, YOU KNOW, WE ARE NEUTRAL ON THE PROVISION OF ONSITE OR IN LIEU FEES, UM, FOR DOWNTOWN BECAUSE OF THOSE TYPES OF NUANCES THAT, THAT ARE MOST PREVALENT DOWNTOWN, BUT NOT IN SOME OF OUR OTHER PROGRAMS. THANK YOU.

OTHER QUESTIONS FROM COMMISSIONERS? YEAH.

MR. GOMEZ, ALONG THE SAME LINES.

THIS IS, UH, COMMISSIONER GOMEZ, UH, EQUITY.

HELLO.

I JUST WANT TO MAKE SURE MIKES ARE ON, WE'VE GOT THEM ON.

HELLO? HELLO.

HELLO.

IT'S ALL THREE .

OKAY, THERE WE GO.

ALL RIGHT.

SO, SO, YOU KNOW, EQUITY IS A BIG DEAL NOWADAYS, AND I'M JUST TRYING TO FIGURE OUT I'M WORKING WITH A LOT OF PEOPLE WHO DON'T MAKE A LOT OF MONEY, UM, THAT STILL WORKED DOWNTOWN, THE BUSBOYS, THE WAITRESSES, THE MAIDS, AND EVERYBODY ELSE THAT HAVE TO COMMUTE AND CAUSE TRAFFIC AND OTHER OTHER STUFF.

UH, I'M JUST WONDERING, KNOWING THAT THE HOMEOWNERS ASSOCIATION FEES DO WHAT THEY DO, WHAT ARE Y'ALL DOING TO ENSURE THAT THERE'S EQUITY IN THE POPULATION THAT CAN LIVE DOWNTOWN.

THAT'S A GREAT QUESTION.

AND IT ABSOLUTELY SPEAKS TO SOME OF THE LIMITATIONS OF THE TOOLS THAT WE HAVE A DEVELOPER INCENTIVE PROGRAMS SUCH AS THIS IS VERY MUCH LIMITED.

UM, IT WILL ONLY WORK WHEN MARKET, UM, MARKET RATE DEVELOPERS BUILD IN THE BONUS ENTITLEMENTS.

UM, AND SO THERE THERE'S SOMETHING THAT THEY'RE GAINING OUT OF A PROGRAM LIKE THIS, AND WE ARE JUST TRYING TO TAKE A PIECE OF THAT ADDED VALUE.

UM, I WOULD SAY THAT'S PART OF WHY THE INLAND FEES HERE ARE IMPORTANT TO COLLECT.

IF IT BECOMES INFEASIBLE TO HOW'S LOW-INCOME PEOPLE DOWNTOWN, WE WANT TO STILL BE ABLE TO PROVIDE SOME PUBLIC BENEFIT.

AND THAT IS WHY WE'RE TRYING TO PROVIDE HOUSING VOUCHERS TO FOLKS.

UM, BUT IT DOES NOT NECESSARILY MEAN THAT THEY ARE ABLE TO LIVE DOWNTOWN.

AND THAT IS A LIMITATION OF A DENSITY BONUS PROGRAM LIKE THIS.

I WOULD SAY I CAN SEE THE EQUITY CONCERNS THAT ARE PRESENT, AND THERE ARE NOT A LOT OF GREAT SOLUTIONS IN THIS TYPE OF APPROACH WITH THE DENSITY BONUS PROGRAM.

I WAS JUST THINKING THAT BECAUSE TOURISM IS A BIG DEAL IN OUR CITY AND CONVENTIONS

[00:30:01]

AND STUFF, AND HOTELS, UM, ARE ESSENTIAL THAT THE PEOPLE THAT WORK AT THE HOTELS, IT SEEMS LIKE TO ME THAT PERHAPS THE HOTELS MIGHT HAVE AN INVESTMENT IN FACILITATING IT.

AND I'M WAS WONDERING IF THERE'S A WAY TO, TO BRING THEM INTO THE PICTURE AND SAY, HEY, IF YOU WANT YOUR LABOR FORCE TO BE SOMEWHERE CLOSE BY, SO YOU CAN CALL ON THEM WHEN YOU NEED THEM AND HAVE THEM AVAILABLE TO YOU WHERE YOU CAN DO THIS, THAT, OR THE OTHER.

AND I'M JUST WONDERING IF THAT'S BEEN DISCUSSED.

UH, SO I THINK IT'S A, IT'S A GREAT APPROACH I'VE SEEN IN OTHER STATES WHERE YOU GET THINGS LIKE COMMUNITY BENEFIT AGREEMENTS THAT TAKE PLACE, AND YOU CAN PROVIDE LIKE A PROVISION FOR WORKFORCE HOUSING IS KIND OF WHAT I, WHAT I HEAR YOU TALKING ABOUT WHERE A PARTICULAR SERVICE INDUSTRY TYPE OF WORK IS SAYING THAT WE NEED TO BE ABLE TO HOUSE OUR, OUR EMPLOYEE POPULATION AS WELL.

THAT'S MAKING WELL BELOW.

WHAT IS, UM, WHAT THE HOUSING MARKET IS PROVIDING AS HOUSING? UM, I HAVE NOT SEEN A LOT OF THOSE TYPES OF AGREEMENTS, BUT THIS WOULD BE A GREAT QUESTION FOR SOME OF OUR ECONOMIC DEVELOPMENT FOLKS WHO PROBABLY HAVE WORKED ON SOME OF THOSE TYPE OF WORKFORCE DEVELOPMENT AGREEMENTS.

UM, AND SO IF THERE'S ANYBODY FROM EDD IN THE ROOM WHO, WHO MIGHT BE ABLE TO ADD TO WHAT I I HAVE MISSED, UM, IT'S SOMETHING I COULD ALSO, YOU KNOW, FOLLOW UP ON, UM, JUST CAUSE I DON'T, I DON'T HAVE A GOOD ANSWER RIGHT NOW.

UM, DO YOU WANT TO HEAR IT FROM QUESTION MONA'S WILL WORK? HELLO? OH YES.

UH, CHRISTINE MCGUIRE WITH THE ECONOMIC DEVELOPMENT DEPARTMENT.

AND I DON'T HAVE A GOOD ANSWER RIGHT NOW THAT THIS IS, UH, THIS IS SOMETHING OBVIOUSLY THAT'S WORTH HAVING A REALLY GOOD, ROBUST ANSWER.

AND I WOULD LIKE TO WORK WITH, UM, I WOULD LIKE TO WORK WITH HOUSING AND PLANNING ON GETTING AN ANSWER BECAUSE I THINK IT'S, IT'S DEFINITELY NOT SOMETHING I WANNA TRY AND DO OFF THE CUFF.

SO IT'S EXCELLENT QUESTION.

OKAY.

CHAIR, CAN I WEIGH IN HERE FROM A DISTANCE? YES.

COMMISSIONER HANDSET.

YEAH.

THANK YOU VERY MUCH FOR THE PRESENTATION.

AND YOU MAY HAVE TOUCHED THIS, UH, UPON THIS IN SOME PREVIOUS, UH, PRESENTATION.

SO EXCUSE ME, IF I'M GOING BACK INTO, UM, SOME BASIC INFORMATION THAT I THINK IS IMPORTANT, BUT ARE, ARE THESE PROGRAMS DIRECTLY CONNECTED TO PERFORMANCE GOALS OR MATRICES, UH, HAVING TO DO WITH EITHER A CALIBRATED NUMBER OF AFFORDABLE OR, UM, AVAILABLE UNITS DOWNTOWN OR IN SOME SORT OF PERCENTAGE OR RATIO, UH, TO THE TOTAL THAT ARE BEING PROVIDED, UH, OTHERWISE MARKET, UM, UNITS THAT ARE IN THE DOWNTOWN AREA AND KEEP FOR YOUR QUESTION COMMISSIONER AND I WANT TO MAKE SURE I UNDERSTAND IT.

SO YOU'RE ASKING ME IF WE'VE SET, UM, KIND OF GOALS OR OVERALL LIKE NUMBER OF UNITS THAT WE'D LIKE TO BE ABLE TO CREATE THROUGH THIS TYPE OF PROJECT.

YEAH.

IT SEEMS LIKE A PROGRAM LIKE THIS, THERE'D BE SOME MEASURE WHEREBY YOU ARE SAYING, THIS IS WHAT WE ARE STRIVING FOR.

THIS IS HOW WE INDICATE OUR SUCCESS AND THE MOST OBVIOUS ONE BEING EITHER IN SOME NUMERIC OR, OR PERCENTAGE, UH, ASPECT OF, OF, OF HOW DOWNTOWN IS BEING DEVELOPED.

YEAH, IT'S, IT'S A GOOD QUESTION.

AND ONE THAT WE'VE HAD BEFORE, AND TYPICALLY WE SAY IT'S HARD TO SET GOALS AROUND A PROGRAM LIKE THIS BECAUSE IT'S SUBJECT TO VOLATILITY IN THE MARKET.

AND I THINK, UNFORTUNATELY THERE'S BEEN HARDLY A BETTER EXAMPLE CASE THAN LIKE A GLOBAL PANDEMIC COMPLETELY IMPACTING OR, OR LIKE PAUSING CERTAIN DEVELOPMENT ACTIVITY DOWNTOWN OR IN CERTAIN REGIONS.

AND THAT DOESN'T NECESSARILY MEAN IT'S A, YOU KNOW, AN ELEMENT OF OUR PROGRAM BEING SUCCESSFUL OR NOT.

AND THAT'S WHY I SHOWED THAT ORIGINAL DIAGRAM THAT IT'S LIKE, WE NEED ALL OF THESE THINGS TO COME TOGETHER IN ORDER TO CREATE DEVELOPMENT AND PUBLIC POLICY ALONE HAS NEVER GOING TO DRIVE THAT.

SO FOR THAT REASON, WE'VE HESITATED TO CREATE LIKE A, A GOAL FOR PRODUCTION OF UNITS DOWNTOWN, UM, BECAUSE IT'S JUST SUBJECT TO SO MANY OTHER, UM, YOU KNOW, VARIABLES AT ANY GIVEN TIME THAT SAID ONE WAY THAT YOU COULD CONSIDER SUCCESS IN A PROGRAM LIKE THIS, WE'RE TRYING TO CALIBRATE IT SO THAT WE'RE CAPTURING A PORTION OF THAT ONUS UPSIDE, IF YOU WILL.

UM, AND SO A PROGRAM IS SUCCESSFUL IF PARTICIPATION IS HIGH.

IF WE SEE THAT A LOT OF DEVELOPMENTS WHEN GIVEN THE OPTION TO JUST BUILD TO BASE ENTITLEMENTS, TO BUILD THE BONUS, WE SEE THE MAJORITY OF DEVELOPMENT DOWNTOWN BUILDING AND THE BONUS ENTITLEMENTS, WHICH MEANS THAT THERE'S AN INCENTIVE THERE, SOMETHING ABOUT THE CALIBRATION IS WORKING.

UM, BUT WHEN DEVELOPMENT KIND OF SLOWS DOWN OR COMES TO A HALT ENTIRELY, AGAIN, THAT DOESN'T NECESSARILY SPEAK TO THE SUCCESS OF THE

[00:35:02]

POLICY AROUND THIS PROGRAM.

AND SO IT'S, IT'S ALSO KIND OF LIMITED IN THAT WAY AT MEASURING, MEASURING THE SUCCESS OF THIS TYPE OF PROGRAM.

I, AND I JUST WAS THINKING ABOUT IT IN TERMS OF YOUR DISCUSSION ON THE, UM, HOA FEES, REALIZING THAT YOUR TOOL AND YOUR FOCUS ON IT AS A W LET'S PUT THIS WAY YOU, YOU TALKED ABOUT IN THE CONTEXT OF A NUMBER OF OTHER ELEMENTS, WHICH HAVE TO BE IN PLAY.

UM, SO IT DOES SEEM TO ME THAT HOW THIS WORKS WITHIN, UM, CONCERT, UH, WITH THOSE OTHER PROGRAMS, SOME OF THEM ARE PRIVATE PROGRAMS PERHAPS, UM, THAT I THINK IT MAY BE EASIER TO UNDERSTAND THAT DYNAMIC NATURE BY THINKING NOT OF ANY ONE TOOL, BUT HOW THIS WHOLE SERIES OF PROGRAMS. AND THERE MAY NOT BE THAT MANY TOOLS AVAILABLE, BUT YOU KNOW, ANY ONE OF THEM THAT, THAT COULD BE CREATED, UM, WORK IN TANDEM WITH EACH OTHER.

AND IF ONE IS CONSTRAINED, OR IF THAT ONE DOES HAVE AN ISSUE THAT OTHERS THEN ARE ADJUSTED OR ARE CONNECTED.

SO THAT ONCE AGAIN, THE OUTCOMES THAT CAN BE PREDICTED OR, OR WOULD, WHAT WOULD EVEN BE A GOAL, UH, TO SAY WE WERE STRIVING FOR, UH, WOULD EITHER BE ACHIEVED, OR WE COULD SPECIFICALLY SAY, BUT FOR THESE TWO OR THREE OTHER COMPONENTS, NOT JUST YOUR PROGRAM, UM, WORKING BETTER OR CONNECTED BETTER TO OUR PROGRAM OR MORE IN SYNC.

SO I, I GUESS I SEE IT IN, IN, IN TERMS OF WHAT YOU PUT IN THE CONTEXT OF POLICY, BUT I THINK THEY'RE MORE, THEY'RE MORE PLAYERS IN THEY'RE MORE FACTORS THAT HAVE TO BE WORKING.

YOU ALLUDED TO IT.

I GUESS I, I, I FEEL MORE COMFORTABLE IF THIS IS, IF YOU, YOU KNOW, YOU START WITH, OKAY, THIS IS WHAT WE HAVE, THIS IS WHAT WE THINK WE CAN ACCOMPLISH.

AND, YOU KNOW, HERE'S HOW THIS TOOL IS AFFECTING THAT.

I UNDERSTAND THAT.

AND I'M ALSO, YOU KNOW, I WOULD LOVE TO HEAR WHAT OTHER COMMISSIONERS MIGHT THINK ABOUT THAT TOO, IF, UM, IF THERE'S A WAY THAT YOU COULD SEE US BEING ABLE TO MEASURE OR SET GOALS, UM, THAT MAKES SENSE IN THIS TYPE OF PROGRAM.

SO I'D LIKE TO FOLLOW UP, I'D LIKE TO FOLLOW UP ON, UM, COMMISSIONER HEIM, SETH'S, UH, COMMENTS WITH TWO QUICK QUESTIONS.

ONE, HOW MANY UNITS HAVE BEEN, UH, PROVIDED WITH A FEE AND LIEU AND HOW MANY AFFORDABLE UNITS HAVE ACTUALLY, UH, TURNED OUT ON THE GROUND AS A RESULT OF THE PROGRAM? I WOULD NEED A MOMENT TO DIG UP THE NUMBERS.

I DID NOT PULL THOSE UP FOR THIS MEETING.

UM, AND IN TERMS OF FEEDING LU, UH, I ALSO DO NOT HAVE THOSE NUMBERS READILY AVAILABLE.

UM, I HAVE A COWORKER WHO, WHO WORKS ON THE IMPLEMENTATION SIDE OF THIS PROGRAM.

WHO'S PRESENTING TO THE DESIGN COMMISSION LATER THIS MONTH WITH THAT OVERVIEW OF LIKE THE PERFORMANCE OF THE PROGRAM.

AND PERHAPS WE COULD LINE THEM UP TO ALSO SPEAK TO THIS COMMISSION, UM, AND PROVIDE SOME INFORMATION ABOUT WHAT, HOW MANY UNITS HAVE BEEN CREATED ON THE GROUND DOWNTOWN AND THEN WHERE THOSE FEES FEE IN LIEU DOLLARS HAVE GONE.

BUT THAT, I THINK THAT WOULD BE VERY HELPFUL BECAUSE WE'RE, WE'RE TALKING ABOUT, UH, UH, FAIRLY COSTLY FEE FOR DEVELOPERS, BUT IT WOULD ALSO BE HELPFUL TO KNOW WHAT THE REAL IMPACT, NOT THE ASPIRATIONAL IMPACT, THE ASPIRATIONAL IMPACT IS VERY WORTHY, BUT WHAT IT ACTUALLY HAS CREATED TODAY, UM, WE'VE HEARD A LOT OF CRITICISM ABOUT THE LACK OF SUCCESS OF THE PROGRAM, AND AGAIN, UNDERSTANDING MORE CONDITIONS AND I'M IN THE MIDDLE OF THAT MARKET.

SO I UNDERSTAND IT, BUT, UM, YOU KNOW, WE REALLY WANT TO SEE WHAT THE RESULTS TO DATE HAVE BEEN.

AND THAT LEADS ME TO ANOTHER QUICK QUESTION.

UM, AND I KNOW THE DESIGN, I BELIEVE THE DESIGN COMMISSION HAS HAD THEIR OWN COMMENTS ON THIS, BUT, UM, WHAT FEEDBACK HAVE YOU GOTTEN FROM THE DEVELOPMENT, UM, INDUSTRY, UH, THAT, THAT DOES THE WORK DOWNTOWN ON THIS TODAY? UM, YEAH, IT'S A GOOD QUESTION.

WE'VE HAD A FEW MEETINGS WITH OUR KEY STAKEHOLDERS.

I THINK WE'VE MOSTLY WORKED WITH THE DOWNTOWN AUSTIN ALLIANCE AND THE REAL ESTATE COUNCIL OF AUSTIN.

UM, AND THEY'VE BEEN KEY PARTNERS THROUGHOUT THE CALIBRATION WORK BECAUSE THEY'RE CLOSEST TO HELPING US UNDERSTAND HOW WE COULD EVALUATE THE VALUE THAT OUR BONUS ENTITLEMENTS PROVIDE.

UM, AND SO WE'VE WORKED WITH THEM BASICALLY ALL SUMMER TO, TO WORK TOWARDS THE CALIBRATION OF THESE FEES.

UM, WE'VE HEARD A FEW THINGS THAT, YOU KNOW, THERE HAS TO BE AN ADDITIONAL INCENTIVE TO BUILD BONUS ENTITLEMENTS BECAUSE OF THE ADDED RISK

[00:40:01]

THAT, UM, PUTTING MORE UNITS OR MORE OFFICE SPACE ON THE MARKET CAN BRING THEM IF IT DOESN'T LEASE UP THAT TYPE OF THING.

AND SO WE'VE ACCOUNTED FOR, UM, ADDITIONAL YIELD ON COST WHEN YOU BUILD BONUS ENTITLEMENTS.

THOSE ARE SOME OF THE FEEDBACK, THINGS THAT WE'VE GOTTEN.

UM, BUT THERE'S, THERE'S A WHOLE LOT OF NUANCE.

YOU'VE PROBABLY HEARD SOME OF THE DOWNTOWN COMMISSION ALSO TALKING ABOUT, UM, YOU KNOW, THERE'S A PRETTY INTRICATE RELATIONSHIP BETWEEN PARKING AND THE VALUE OF, UM, OR IN THE COST AND VALUE OF DEVELOPMENT TOO.

AND SO THAT HAS SPARKED SOME CONVERSATIONS ABOUT, UM, INSTEAD OF HAVING A SINGLE FEE, POTENTIALLY IF WE'RE ABLE TO INCENTIVIZE SOMETHING LIKE REDUCED PARKING DOWNTOWN, MAYBE THEY COULD PAY A LOWER FEE.

UM, THAT I BELIEVE WAS IN ONE OF THE DOWNTOWN DESIGN COMMISSIONS, UH, RESOLUTIONS THAT THEY PASSED.

THAT'S SOME FEEDBACK WE'VE GOTTEN.

THE DESIGN COMMISSION ALSO SPOKE TO A DESIRE TO SEE MORE HOUSING CREATED WITH THESE FEES INSTEAD OF JUST GOING TOWARDS HOUSING VOUCHERS, WHICH IS ITSELF NOT BUILDING HOUSING, BUT GETTING FOLKS INTO HOUSING WHO MIGHT HAVE BARRIERS ON THEIR PATH TO GET THERE.

UM, WE'VE HEARD THAT THE COMMERCIAL MARKET FOR SURE.

UM, I MEAN, SO THE 2014, THE ORIGINAL FEES FOR THIS PROGRAM WERE $0 FOR, UH, COMMERCIAL PROJECTS.

AND SO WHEN THE INTERIM FEES CAME ONLINE AND THEY WERE SHOWING, YOU KNOW, UP TO $18 FOR A COMMERCIAL DEVELOPMENT, UM, THERE WAS A LOT OF CONCERN ABOUT THE, THAT THAT COULD HAVE ON THE MARKET, UH, ESPECIALLY IN TODAY'S CONDITIONS.

AND I THINK OUR CALIBRATION WORK HAS DEFINITELY SHOWN THAT, THAT THOSE FEES MIGHT HAVE BEEN FEASIBLE.

IT REALLY KIND OF THE ZENITH OF AUSTIN'S DOWNTOWN DEVELOPMENT BACK IN 2019, BUT THAT IS NOT THE CASE TODAY.

UM, AND SO I THINK WE'VE HEARD A LOT OF SUPPORT FOR BRINGING THAT FEE, UH, LOWER TO ACTUALLY MATCH TODAY'S MARKET CONDITIONS.

UM, AND THEN THERE'S ALSO A REALLY GOOD DISCUSSION TO BE HAD ABOUT JUST INCENTIVIZING THE CREATION OF HOUSING DOWNTOWN OVER, UH, POTENTIALLY OVER COMMERCIAL DEVELOPMENT.

YOU KNOW, SOME FOLKS HAVE TOLD US, WE THINK THERE'S ENOUGH COMMERCIAL DEVELOPMENT DOWNTOWN.

WE NEED MORE HOUSING NOW LET'S, UH, TRY AND INCENTIVIZE HOUSING MORE INSTEAD OF KIND OF KEEPING A, A POLICY NEUTRAL APPROACH ON THAT.

UM, AND WE HAVEN'T RECEIVED, YOU KNOW, COUNCIL DIRECTION ON THAT, BUT THOSE ARE, THOSE ARE SOME OF THE THINGS THAT WE'VE HEARD AS WELL FROM OTHER FOLKS.

THANK YOU, COMMISSIONER.

MEISENBACH HI.

GOOD.

YES.

UM, THANK YOU SO MUCH FOR YOUR PRESENTATION AND YOUR ANSWERS.

AND, UM, I HOPE IN ADDITION TO TALKING TO THE REAL ESTATE GROUPS FOR DOWNTOWN IN THE DOWNTOWN AUSTIN ASSOCIATION, THAT YOU WOULD ALSO SPEAK TO SEVERAL DEVELOPERS DIRECTLY FOR COMMERCIAL AND DEVELOPERS FOR RESIDENTIAL, JUST ONE-ON-ONE THAT'S MY SUGGESTION.

THANK YOU.

THANK YOU.

IS THERE ANY ACTION THAT YOU'RE LOOKING FROM US TONIGHT FOR, FROM US TONIGHT? I'LL BE HONEST THAT THE CALENDAR WAS SUPPOSED TO ALIGN WHERE WE HAD A FEE THAT Y'ALL COULD CONSIDER FOR ACTION TO RECOMMEND OR NOT RECOMMEND TODAY.

UM, THAT BEING SAID THAT THE STAFF RECOMMENDATION ON THE FEE HAS NOT BEEN FINALIZED.

I'VE BEEN ABLE TO PROVIDE SOME DIRECTIONALITY.

WE THINK RESIDENTIAL FEE COULD GO UP, COMMERCIAL FEE WILL GO DOWN.

UM, BUT I DO NOT HAVE AN ITEM FOR COUNCIL OR FOR THIS COMMISSION TO, UM, TAKE ACTION ON.

UM, BUT AS YOU MIGHT HAVE SEEN DESIGN COMMISSION HAS TAKEN A VARIETY OF ACTIONS JUST RELATED TO THE DOWNTOWN DENSITY BONUS PROGRAM.

UM, WHAT IS ON IN THE CODE TODAY.

AND SO, UM, IF THERE IS A PARTICULAR DIRECTION THAT THIS COMMISSION WOULD LIKE TO SEE THAT PROGRAM GO, THAT'S ALSO I SUPPOSE, ON THE TABLE.

THANK YOU.

DO I HAVE ANY COMMISSIONER TO CARE TO MAKE A MOTION ON THIS PARTICULAR ITEM HEARING NONE.

THANK YOU VERY MUCH FOR COMING THIS EVENING.

WE SURE APPRECIATE YOUR PRESENTATION.

LOOK FORWARD TO GETTING THE STATS ON THE ACTUAL PRODUCTION.

IF YOU WOULD BE KIND ENOUGH TO GET THAT TO MONA OR CHRISTINE FOR DISTRIBUTION TO THE COMMISSION.

I WOULD CERTAINLY APPRECIATE IT.

YEAH, I THINK I CAN DEFINITELY DO THAT.

THANK YOU ALL COMMISSIONERS FOR YOUR TIME TONIGHT.

AND WE WANT TO, I IMAGINE I CAN GET THE SLIDE DECK THAT'S GIVEN TO THE DESIGN COMMISSION THAT HAS THAT INFORMATION TO, UH, TO DISTRIBUTE TO THIS COMMISSION AS WELL.

THAT WOULD BE GREAT, SAM.

THANK YOU VERY MUCH.

THANK YOU ALL.

THANK YOU.

[2.b. Briefing on the Convention Center Redevelopment and Expansion Project: Presentation by Trisha Tatro and Katy Zamesnik, Austin Convention Center Department (ACCD)]

UH, NEXT ITEM OF BUSINESS IS BRIEFING ON THE CONVENTION CENTER, REDEVELOPMENT AND EXPANSION PROJECT.

WE HAVE TRISHA TETRO AND KATIE'S IMMENSE.

SO MEZ NICK, UH, FROM THE AUSTIN CONVENTION CENTER DEPARTMENT.

WELCOME LADIES.

THANK Y'ALL FOR COMING BACK TO OUR MEETING AND FOR BEING ALIVE IN PERSON, THE FLOOR IS YOURS.

[00:46:13]

THERE YOU GO.

UH, GOOD EVENING COMMISSION.

MY NAME IS TRISHA TAITRA.

I'M THE INTERIM DIRECTOR FOR THE, OR I AM THE ACTUAL DIRECTOR FOR THE CONVENTION CENTER.

IT'S BEEN A LONG TIME.

UM, I'M JOINED BY KATIE'S, MESNICK THE CHIEF ADMINISTRATIVE OFFICER FOR THE CONVENTION CENTER.

UH, WE'RE COMING BACK BEFORE YOU TONIGHT TO DISCUSS THE REDEVELOPMENT AND EXPANSION PROJECT IN GREATER DETAIL.

AND TO ANSWER QUESTIONS THAT YOU MIGHT HAVE ABOUT OUR NEXT STEPS, JUST A QUICK OVERVIEW OF WHAT WE'RE GOING TO DISCUSS WITH YOU THIS EVENING.

UH, WE'RE STARTING WITH A VERY BRIEF OVERVIEW OF THE STATE LAW AND, UH, HOTEL OCCUPANCY TAX.

WE'RE GOING TO PROVIDE YOU WITH SOME CLARITY AROUND THE MAIN SOURCE OF FUNDING FOR THE REDEVELOPMENT AND THE EXPANSION OF THE EXISTING CONVENTION CENTER.

AND THEN WE'RE GOING TO WALK YOU THROUGH THE LONG HISTORY OF THE PLANNING FOR THIS PROJECT.

AND THIS IS ALL REQUESTED INFORMATION THAT WAS PROVIDED TO THE COMMISSION FROM CONVENTION CENTER STAFF.

UH, FINALLY, WE WOULD LIKE TO LET YOU KNOW WHERE WE'RE GOING.

WE'RE PLANNING TO GO FROM HERE AND THEN ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE.

I WILL TURN IT OVER TO KATIE TO DISCUSS THE HOTEL OCCUPANCY TAX.

I CAN DO IT FOR YOU.

I THINK YOU MIGHT TO PUSH YOUR BUTTON, YOUR HONOR.

CAN YOU TELL WHERE A LITTLE REST EXCUSE ME, DID WE LOSE AUDIO? UM, WE'RE NOT HEARING ANY OF THE PRESENTATION CAN YOU HEAR ME? YEP.

OKAY.

UM, SO I CAN GO BACK JUST A SECOND.

SO, UM, YES, IN THE LAST FIVE YEARS, THE HOTEL OCCUPANCY TAX FUND HAS TRANSFERRED ABOUT $89 MILLION, UM, TO THESE RESPECTIVE FUNDS, UM, BASED, YOU KNOW, THEY'RE NOT ALL EQUAL THEY'RE BASED ON WHEN THEY WERE CREATED.

UM,

[00:50:01]

AND SO THE EXPENDITURES OF THESE FUNDS IS HANDLED BY OUR LOVELY ECONOMIC DEVELOPMENT DEPARTMENT, UM, AND NOT BY THE AUSTIN CONVENTION CENTER.

UM, ONE THING THAT WE ARE WANTING TO NOTE IS THAT THE ADDITIONAL ALLOCATION FOR HISTORIC PRESERVATION AND THE LIVE MUSIC FUND, UM, IF WE ARE NO LONGER ABLE TO COLLECT THE ADDITIONAL 2% FOR THE EXPANSION PROJECT.

SO THAT WOULD MEAN THAT EXPANSION DOES NOT MOVE FORWARD.

UM, THE CITY WOULD LOSE THE REVENUE SOURCE FOR THE LIVE MUSIC FUND AND THE ADDITIONAL 15% FOR HISTORIC PRESERVATION.

THAT'S BEING ALLOCATED FROM THE ADDITIONAL 2% FOR EXPANSION.

SO OUR TOURISM AND PROMOTION FUND ALSO RECEIVES A PORTION OF HOTEL OCCUPANCY TAX.

UM, THE TOURISM AND PROMOTION FUND ALLOCATION FORMS, THE BASIS OF THE CITY'S CONTRACT WITH VISIT AUSTIN.

UM, THEY ARE THE OFFICIAL DESTINATION MARKETING ORGANIZATION FOR THE CITY.

UH, WE CONTRACT WITH THEM TO MARKET AUSTIN NATIONALLY AND INTERNATIONALLY AS A PREMIER CONVENTION AND LEISURE DESTINATION.

UM, AND THEY ALSO HOUSED THE AUSTIN FILM COMMISSION, THE AUSTIN MUSIC OFFICE, THE AUSTIN SPORTS COMMISSION AND THE VISIT AUSTIN FOUNDATION.

AND FINALLY, AFTER ALL OF THAT FOUR AND A HALF PERCENT OF THE 11% GOES TO PAY, OH, SORRY, OF THE 9% GOES TO PAY DEBT SERVICE ON THE CONVENTION CENTERS, ORIGINAL BONDS PER THE BOND COVENANTS COVER ANY DEFICIENCIES THAT MAY EXIST IN THE VENUE PROJECT FUND, WHICH WAS THE ALLOCATION FOR THE ORIGINAL 2%.

UM, AND THEN TRANSFERS ANY REMAINING BALANCE TO THE CONVENTION CENTER OPERATING FUND TO SUPPORT CONVENTION CENTER OPERATIONS AS ALLOWED BY STATE LAW.

AND I REALIZED THAT WAS A LITTLE BIT LONG IN THE BACKUP THAT WE PROVIDED TO YOU GUYS.

WE DO HAVE A GRAPHIC FOR YOU, AND I CAN CERTAINLY RESEND THAT BACK OUT TO YOU AS WELL.

UM, SO THAT YOU CAN GET A BIT MORE OF A VISUAL REPRESENTATION ON KIND OF HOW THAT ALL FLOWS.

AND SO THAT'S SORT OF THE OVERVIEW FOR THE HOTEL OCCUPANCY TAX.

UM, AND WITH THAT, I'LL GO AHEAD AND TURN IT BACK OVER TO TRICIA.

THANK YOU, KATIE.

SO HOW DID WE GET HERE? UH, YOU HAVE SEEN THIS SLIDE FROM OUR JULY PRESENTATION BEFORE THE COMMISSION.

THE IDEA OF AN EXPANSION HAS BEEN CONTEMPLATED FOR NEARLY A DECADE, UH, AND WAS FIRST FORMALLY DECLARED IN 2015 WITH THE PUBLICATION OF THE LONG RANGE MASTER PLAN.

IT RECOMMENDED A NON-CONTIGUOUS EXPANSION TO THE WEST AND A RECOMMENDATION THAT WAS CARRIED THROUGH SUBSEQUENT STUDIES BETWEEN 2015 AND 2017 AT COUNCIL'S DIRECTION.

THE UT CENTER FOR SUSTAINABLE DEVELOPMENT STUDIED A POTENTIAL EXPANSION AND CONCLUDED THAT A WEST EXPANSION WAS THE ONLY VIABLE OPTION.

THE FULLER HISTORY IS INCLUDED IN THE COMPREHENSIVE DOCUMENT THAT WAS PROVIDED BEFORE THE COMMITTEE TO THE COMMISSION.

LAST MONTH, COUNCIL AUTHORIZED THE COLLECTION OF AN ADDITIONAL 2% HUT IN LATE 2019 IN SUPPORT OF AN EXPANSION.

AND AT THE SAME TIME, THE CONVENTION CENTER STAFF WORKED TOWARDS A MASTER PLAN UPDATE, AN ECONOMIC IMPACT STUDY TO CONFIRM THE VIABILITY OF AN EXPANSION.

THESE REPORTS WERE RELEASED IN AUGUST OF 2020, FOLLOWING THIS, THE COUNCIL APPROVED THE CMR METHODOLOGY IN JUNE OF THIS YEAR, WHICH ALLOWED THE CENTER TO ISSUE AN RFP, AN RFQ FOR ARCHITECT AND ENGINEERING SERVICES, AS WELL AS AN RFP FOR CONSTRUCTION SERVICES.

THESE CONTRACTS WILL GO BACK BEFORE COUNCIL FOR APPROVAL IN 2022, I WANTED TO BRIEFLY DISCUSS SOME OF THE REPORTS IN A LITTLE MORE DETAIL.

THE LONG RANGE MASTER PLAN PRESENTED IN 2015 TO THE CITY COUNCIL CONCLUDED THAT MOVING, UH, MOVING THE CENTER OUTSIDE OF THE CORE OF DOWNTOWN WAS NOT VIABLE AND THAT THE CONVENTION CENTER NEEDED TO MAINTAIN PROXIMITY TO THE EXISTING AND PLANNED HOTEL, SUPPLY, DINING AND ENTERTAINMENT.

THE PLAN CONCLUDED THAT THE CENTER NEEDED TO REMAIN IN DOWNTOWN AND THAT IT NEEDED TO EXPAND TO THE WEST.

FOLLOWING THE PRESENTATION ON THE LONG RANGE MASTER PLAN COUNCIL PASSED A RESOLUTION WHICH REQUESTED THAT THE URBAN LAND INSTITUTE REVIEW THE PLAN.

THE ULI FORMED A TECHNICAL ASSISTANCE PANEL IN THE SPRING OF 2015 AND REAFFIRMED THE FINDINGS IN THE LONG RANGE MASTER PLAN.

SUBSEQUENTLY COUNCIL PASSED A RESOLUTION THAT CREATED THE VISITOR IMPACT TASK FORCE.

THE TASK FORCE WAS A GROUP OF 18 COMMUNITY MEMBERS APPOINTED BY COUNCIL TO REVIEW AMONG OTHER THINGS, THE EXPANSION PROJECT, AND HOW TO BEST UTILIZE HOTEL OCCUPANCY TAX TO IMPACT TOURISM.

THEY PUBLISHED THEIR REPORT IN JUNE OF 2017.

THE REPORT IS PART OF THE BACKUP THAT WE PROVIDED TO YOU A FEW WEEKS AGO.

THIS REPORT GENERALLY SUPPORTED AN EXPANSION WITH CONDITIONS AND PROVIDED GUIDANCE ON THE PUBLIC FACING AND COMMUNITY-RELATED ELEMENTS WITHIN THE EXPANSION PROJECT.

FOLLOWING THE DELIVERY OF THAT REPORT, COUNCIL APPROVED AN INTER LOCAL AGREEMENT WITH THE CENTER FOR SUSTAINABLE DEVELOPMENT AND DESIGN AT THE UNIVERSITY OF TEXAS IN 2017 TO CONDUCT A STUDY REGARDING THE

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AUSTIN CONVENTION CENTER RELATING TO THE PHYSICAL AND ECONOMIC PLANNING IMPACTS OF THE ALTERNATIVE CONVENTION CENTER SCENARIOS.

THIS STUDY ALSO INCLUDED AS PART OF, WAS ALSO INCLUDED AS PART OF THE BACKUP, AND IT WAS FINALIZED IN 2019 AND PRESENTED TO CITY COUNCIL.

THE REPORT STUDIED A VARIETY OF SCENARIOS FOR THE EXPANSION.

THE PREFERRED SCENARIO, AS NOTED BY COUNCIL IN THE PALM DISTRICT RESOLUTION WAS SCENARIO FIVE IN 2018 COUNCIL THEN ESTABLISHED THE TOURISM COMMISSION TO RECEIVE EXPERTISE AND RECOMMENDATIONS TO CITY COUNCIL ON HOT ISSUES THAT INVOLVED THE TOURISM INDUSTRY, PART OF THEIR CHARGE WAS TO PROVIDE THE GUIDANCE ON PLANNED EXPANSIONS OF THE CONVENTION CENTER.

AND IN 2019, THE COMMISSION PASSED A RESOLUTION WHICH SUPPORTED THE FINDINGS IN THE VISITOR IMPACT TASK FORCE AND RECOMMENDED THAT THESE FINDINGS FORM THE GUIDING FRAMEWORK FOR THE EXPANSION PROJECT.

THE CONVENTION CENTER HAS WORKED VERY CLOSELY WITH THE COMMISSION SINCE ITS INCEPTION AND WILL CONTINUE TO DO SO AS WE MOVE THROUGH THE REDEVELOPMENT AND EXPANSION PLAN, ALSO IN MAY OF 2019, THE CITY COUNCIL PASSED A RESOLUTION BETTER KNOWN AS THE PALM DISTRICT RESOLUTION AND THIS DOCUMENT IN PART NOTED THAT I QUOTE THE CITY COUNCILS, THE CITY COUNCIL DESIRES TO REVISION REINVISION THE CONVENTION CENTER AS AN ACTIVE COMMUNITY ORIENTED CIVIC BUILDING THAT ENHANCES THE CULTURALLY RICH FABRIC OF THE PALM DISTRICT AND DESIRES TO BEGIN THE PROCESS TO EXPAND TO THE AUSTIN CONVENTION CENTER.

AND IT DIRECTED THE CITY MANAGER TO DEVELOP AN INITIAL DESIGN AND FINANCING MECHANISM FOR THE EXPANSION IN AUGUST OF 2019, COUNCIL APPROVED AN ORDINANCE WHICH RAISED, UH, THE MUNICIPAL HOT RATE BY AN ADDITIONAL 2% IN SUPPORT OF THE EXPANSION AS PART OF THE APPROVAL OF THIS ADDITIONAL 2%.

THE ORDINANCE ALSO ALLOCATED AN ADDITIONAL 15% OF THE NEW 2% TO HISTORIC PRESERVATION AND CULTURAL ARTS VIA THE LIVE MUSIC FUND, THE CONVENTION CENTER, ENGAGED CONSULTANTS TO WORK ON A MASTER PLAN UPDATE AND AN ECONOMIC IMPACT.

AND BY MARKET VIABILITY STUDY, THOSE DOCUMENTS ARE LINKED IN THE RESPONSE AND THEY WERE PROVIDED TO YOU IF YOU WEEKS AGO THAT THESE REPORTS WERE RELEASED IN AUGUST OF 2020 AND WERE PRESENTED TO COUNCIL, THE MASTER PLAN UPDATE INCLUDED TWO POSSIBLE DESIGN SCENARIOS FOR THE EXPANSION TO THE WEST AND A REDEVELOPMENT OF THE EXISTING CONVENTION CENTER BUILDING AS CALLED FOR IN THE PREVIOUS STUDIES, THE MASTER PLAN UPDATE PROGRAMMING CALLS FOR 450,000 SQUARE FEET OF EXHIBIT HALL SPACE UP TO 140,000 SQUARE FEET OF MEETING SPACE AND UP TO 120,000 SQUARE FEET OF BALLROOM SPACE.

THE SPACING REQUIREMENTS ALSO ALLOW FOR PRIVATE DEVELOPMENT ON THE SITE OF THE EXISTING CONVENTION CENTER, AS WELL AS MIXED USE AND COMMUNITY SPACES BASED ON THE PROGRAMMATIC REQUIREMENTS AND THE MASTER PLAN UPDATE THE CON PANION REPORT ON THE ECONOMIC IMPACT AND MIKE MARKET VIABILITY OF THE PROJECT CONCLUDED THE FOLLOWING HAD ESTIMATED THAT THE ECONOMIC IMPACT TO AUSTIN AT COMPLETION WOULD BE $300 MILLION OF ECONOMIC IMPACT ON THE LOCAL COMMUNITY.

IT WOULD PROVIDE 14 MILLION IN TAX REVENUE TO THE CITY AND SUPPORT OVER 1700 ADDITIONAL JOBS EXPANSION OF THE AUSTIN CONVENTION CENTER IN CONJUNCTION WITH ONGOING INITIATIVES, INCLUDING WATERLOO GREENWAY, THE PALM DISTRICT PROJECT CONNECT WILL ALL TRANSFORM THE SOUTHEAST CORNER OF DOWNTOWN INTO A COMMUNITY CENTRIC DESTINATION.

AND THE EXPANSION WILL GREATLY EXPAND THE AVAILABLE RETAIL SPACE OF THE EXISTING CONVENTION CENTER, ALLOWING THE CENTER TO REMAIN COMPETITIVE IN THE CONVENTION CENTER MARKET.

IN ORDER TO MINIMIZE THE PROJECT DELAYS AND BUDGET IMPACTS TO THE REDEVELOPMENT AND EXPANSION PROJECT WHILE THE FINANCING OPTIONS WERE FINALIZED, STAFF TOOK FORTH THE RCA ON JUNE 10TH, 2021 TO THE COUNCIL AGENDA.

AND IT REQUESTED THAT APPROVED THE USE OF THE CONSTRUCTION MANAGER AT RISK METHOD FOR CON TRACKING AS THE PROJECT DELIVERY METHOD APPROVAL OF THIS ITEM ALLOWED THE STAFF TO CONTINUE OUR DUE DILIGENCE AND OUR WORK ON THE EXPANSION AND ALLOWS US TO KEEP WITHIN THE CURRENT TIMELINE DELAYS TO THE PROJECT.

TIMELINE MEANS SIGNIFICANT COST INCREASES TO THE OVERALL PROJECT IN TANDEM TO THIS ITEM, COUNCIL PASSED A RESOLUTION WHICH PROVIDES FURTHER DIRECTION FOR ELEMENTS TO INCLUDE IN THE REQUEST FOR QUALIFICATIONS, FOR ARCHITECTURAL AND ENGINEERING SERVICES.

AND IT DIRECTS THAT REPRESENTATIVES FROM THE CENTER FOR SUSTAINABLE DEVELOPMENT AT THE UNIVERSITY OF TEXAS,

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THE PALM DISTRICT, THE DOWNTOWN AUSTIN ALLIANCE, AND THE WATERLOO GREENWAY ALSO BE INCLUDED IN THE EVALUATION PANEL FOR THE RFQ.

IN ADDITION TO CITY STAFF, WE'VE BEEN WORKING DILIGENTLY TO INCORPORATE THE DIRECTION IN THE RFQ THAT WILL BE RELEASED WHEN THE FINANCING PLAN IS FINALIZED.

THIS SLIDE SUMMARIZES COUNCIL'S ACTION ON EXPANSION WHILE NOT ENTIRELY COMPREHENSIVE, WE FELT IT WAS IMPORTANT TO HIGHLIGHT THE HARD WORK THAT'S BEEN DONE BY COUNCIL TO DATE RELATED TO THE EXPANSION.

ALL OF THESE ITEMS ARE IN THE COMPREHENSIVE RESPONSE DOCUMENT THAT WAS PROVIDED TO THE COMMISSION.

AND AS YOU CAN SEE, THE REDEVELOPMENT AND EXPANSION PROJECT HAS BEEN DISCUSSED THAT DID AND VOTED ON MANY TIMES OVER THE YEARS, THE VALUABLE GUIDANCE AND DIRECTED DIRECTION PROVIDED BY OUR COMMUNITY STAKEHOLDERS.

SUBJECT MATTER, EXPERTS AND COUNCIL HAVE RESULTED IN A CONCEPT FOR A CONVENTION CENTER, REDEVELOPMENT AND EXPANSION.

THAT WILL BE A GREAT ASSET TO THE PALM DISTRICT, OUR COMMUNITY, AND TO OUR OUT OF TOWN GUESTS FOR DECADES TO COME.

SO WHERE DO WE GO FROM HERE? AS WE'VE SHOWN YOU THROUGH THE PREVIOUS SLIDES, THERE IS A LOT OF TIME, EFFORT AND RESEARCH.

THAT'S GONE INTO THE PLANS FOR THE CONVENTION CENTER, REDEVELOPMENT AND EXPANSION.

THE FOUR DOCUMENTS SHOWN ON THE SCREEN HAVE FORMED THE GUIDING FRAMEWORK FOR EXPANSION THOUGH.

THEY ARE NOT THE ONLY MEANS, AND IT IS NOT AN EXCLUSIVE LIST.

THESE ARE PRESENTED IN NO PARTICULAR ORDER OF IMPORTANCE, BUT MUCH RATHER THEY WORK TOGETHER IN CONCERT TO DRIVE US FORWARD DIVING INTO EACH OF THESE A LITTLE BIT MORE SCENARIO, FIVE OF THE UT STUDY IN THEIR WORDS ALLOWS FOR THE CONVENTION CENTER TO FULLY EMBRACE A TRANSFORMED WALLER CREEK.

THIS SCENARIO ORIENTS THE FRONT DOOR OF THE CONVENTION CENTER TOWARDS THE CREEK ACTIVATES TRANSPORTATION CORRIDORS THAT HAVE BEEN SHUT OFF BY THE EXISTING CONVENTION CENTER INCORPORATES GREEN SPACE FOR PUBLIC USE AND ALLOWS FOR OPPORTUNITIES FOR PUBLIC PRIVATE PARTNERSHIP WITHIN THE EXISTING FOOTPRINT.

THE COMBINED REDEVELOPMENT AND EXPANSION WOULD QUOTE, BRING NEW PUBLIC SPACE TO THE DISTRICT THAT IS DESIGNED TO BE USED BY THE LOCAL COMMUNITY, AS WELL AS VISITORS TO THE CITY.

AS NOTED COUNSEL EXPRESSED STRONG PREFERENCE FOR SCENARIO FIVE, AS THE GUIDING FRAMEWORK FOR THE REDEVELOPMENT AND EXPANSION OF THE EXISTING CENTER.

THIS WAS EVIDENCED BY THE LANGUAGE AND THE PALM DISTRICT RESOLUTION PASSED IN MAY OF 2019.

THE LANGUAGE IN THE RESOLUTION SPEAKS OF SCENARIO FIVE AND IT DIDN'T, AND THERE IS ONE QUOTE THAT SAYS IT BEST EMBODIES THE DESIGNED RE REINVISIONING OF WHAT A CONVENTION CENTER CAN BE, INCLUDING NOT ONLY ADDITIONAL CONVENTION SPACE, BUT ALSO REMOVING EXISTING ELEMENTS TO CREATE AN ENHANCED PUBLIC SPACE PLACEMAKING AND CONNECTIVITY WITHIN THE PALM DISTRICT, ESPECIALLY ALONG SECOND STREET WALNUT CREEK AND PALM PARK.

THE PALM DISTRICT ALSO CLEARLY STATES COUNCIL'S VISION FOR EXPANSION NOTABLY THE CITY COUNCIL DESIRES TO REINVISION THE CONVENTION CENTER AS AN ACTIVE COMMUNITY ORIENTED CIVIC BUILDING THAT ENHANCES THE CULTURALLY RICH FABRIC OF THE PALM DISTRICT AND DESIRES TO BEGIN THE PROCESS TO EXPAND THE CONVENTION CENTER.

THE PALM DISTRICT PLANNING TEAM WAS ALSO CREATED AS PART OF THIS RESOLUTION.

AND THE CONVENTION CENTER HAS BEEN A STRONG AND ACTIVE PARTNER IN THE PLANNING EFFORTS FROM THE VERY BEGINNING, THE MASTER PLAN UPDATE INCORPORATED ALL OF THE DIRECTION AND STUDIES DONE PREVIOUSLY, INCLUDING THE UT STUDY AND THE DIRECTIVES OF THE PALM DISTRICT RESOLUTION.

THE UPDATE WAS NOT INTENDED TO BE COMPREHENSIVE, COMPREHENSIVE MASTER PLAN ITS PURPOSE WAS TO EXPLORE ALTERNATIVE DEVELOPMENT AND PHASING STRATEGIES THAT REFLECT THE CHARACTERISTICS OF SCENARIO FIVE, BUT WITHIN THE CONTEXT OF PROGRAMMATIC AND OPERATIONAL REQUIREMENTS, TO BE A VIABLE SOLUTION FOR THE CONVENTION CENTER, THE UPDATE DEVELOPED TO DESIGN SCENARIOS, WHICH REPRESENTS STRATEGIES FOR IMPLEMENTATION THAT MINIMIZE DISRUPTION TO THE BUSINESS OPERATIONS AND FUNCTIONALITY OF THE CONVENTION CENTER DURING DEMOBILIZATION AND CONSTRUCTION, RATHER THAN THE FULL-BLOWN DESIGN IN BOTH SCENARIOS, A SUBSTANTIAL PORTION OF THE REDEVELOPMENT WOULD OCCUR UNDERGROUND RESULTING IN A MORE COMPACT CONVENTION CENTER THAT ALLOWS OPPORTUNITIES FOR MIXED USE DEVELOPMENT, TRANSPORTATION, CORRIDORS, AND CONNECTIVITY TO THE REST OF THE PUMP DISTRICT.

FINALLY, COUNCIL'S RESOLUTION PASSED IN JUNE OF 2021, PROVIDED US WITH A CLEAR DESIGN GUIDELINES FOR THE REDEVELOPMENT AND EXPANSION PROJECT.

MORE SPECIFICALLY, THE RESOLUTION NOTES THAT QUOTE THE CITY COUNCIL SEEKS TO WORK WITH THE DESIGN TEAM CAPABLE OF DELIVERING A WORLD-CLASS DESIGN,

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BENEFITING A CITY OF AUSTIN SIZE AND PROMINENCE.

THE CONVENTION CENTER DESIGN SHALL PROVIDE MORE THAN JUST A FUNCTIONAL SPACE FOR CONVENTIONS.

THAT DESIGN SHALL INCORPORATE THE MOST INNOVATIVE IDEAS AND PROGRAMMING AND PLACEMAKING AND SHALL AIM TO CREATE A CIVIC BUILDING THAT DRAWS AND SERVES PROGRAMMING AND PLACEMAKING AND SHALL AIM TO CREATE A CIVIC BUILDING THAT DRAWS AND SERVES AUSTINITES AS WELL AS VISITORS.

THE CITY COUNCIL AFFIRMS ITS INTENTION THAT THE CONVENTION CENTER BE LIKE ITS COMPANION CIVIC BUILDING TO THE WEST, THE AUSTIN CENTRAL LIBRARY, A LANDMARK OF GREAT DISTINCTION, A BUSTLING AND VITAL PUBLIC GATHERING PLACE, AND A POINT OF PRIDE FOR THE COMMUNITY.

THESE ELEMENTS SPELLED OUT WITHIN THE RESOLUTION HAVE BEEN INCORPORATED IN THE DRAFT RFQ DOCUMENTS THAT LEADS US TO TODAY.

AS I'VE NOTED PREVIOUSLY, WE'RE FINALIZING THE RFQ DOCUMENTS AND THE FINANCING PLAN WHEN COMPLETE, WE WILL BRING THE FINANCING PLAN AND PROOF OF CONCEPT TO THE CITY COUNCIL.

OUR GOAL IS TO HAVE THE RFQ RELEASED THIS FALL, FOLLOWED BY THE RFP FOR CONSTRUCTION SERVICES A FEW MONTHS