With Council approval, new EDC moves forward

City Council has approved the interlocal agreement that will allow the newly created Austin Economic Development Corporation to begin conducting its business, which will be focused around real estate projects addressing affordability and gentrification concerns.

The unanimous vote last week came after years of planning and strategizing to decide how the city could create and execute business deals quickly enough to involve private industry while still leveraging the municipal powers around taxing and infrastructure creation.

Among the first priorities for the EDC – which could be renamed Austin Public Development Corporation in the near future – is issuing a request for proposals this summer related to arts space acquisition using two funding sources; $12 million in bond money approved by voters in 2018 for creative space preservation, and $2.4 million recently approved by Council to help iconic venues at risk of closure or redevelopment.

That RFP will seek out current venue occupants at risk of closure that the city could purchase and then provide the operators with more favorable lease terms. It will also look for arts groups that could partner in occupying and managing a larger space the city would purchase, or possibly provide space via its portfolio of existing properties that could be repurposed.

Affordability concerns for arts spaces and other small businesses in the city’s core have grown in recent years as the local real estate market has become one of the most attractive in the country. Recent statistics put the price of the median single-family home in the Austin area at more than $450,000, with median prices in the city’s core climbing to just over $550,000.

Matt Kwatinetz, the real estate and development consultant who has worked with the city for more than a decade toward the EDC’s creation, said the EDC’s mission around affordability is more important than ever.

“It’s important to think cyclically and also long term, because there is no silver bullet to fix this issue. Just like a private real estate developer builds a portfolio over time, we must also do that but there’s one big advantage when the public side decides to get in the real estate game and that’s we have an infinite time horizon since we don’t have to flip (a project) out to get our investors a return. Each property we get, whether it’s a music space or a housing space, can be permanently affordable from that point.”

In addition to the cultural trust RFP, Kwatinetz said other areas of concern for the EDC include affordability and anti-gentrification projects tied to the cap-and-stitch plan for I-35, and the redevelopment of the South Central Waterfront district just south of the Congress Avenue bridge.

The South Congress project is most important, he said, because the EDC will be able to act as the central negotiator for infrastructure projects that will allow developers in the area to build more, with the expectation of providing 20 percent affordable housing and discounted commercial space to house cultural entities.

Currently the regulating plan for that district is being updated for possible approval.

“This is exactly the type of project that AEDC will be best at implementing … a project with disparate ownership. The critical pieces are getting agreement from Council on the establishment of the (tax increment reinvestment zone) district and the regulating plan, both of which have been kicked around for a very long time,” he said.

“We won’t be handing any of the developers any money directly, but the task of doing that infrastructure will allow them to build more, build better and get better prices, so those negotiations will be about deciding the sequencing of where infra happens and working on compliance with the regulating plan.”

Photo made available through a Creative Commons license.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.