City formulates $98 million financing plan to cover Colony Park gap
Wednesday, July 6, 2022 by
Chad Swiatecki The city is asking Travis County to contribute $30 million to the development costs of the Colony Park planned unit development in Northeast Austin, part of a proposed financing package of $98.8 million needed to complete the project.
A city memo released Tuesday outlines several details related to the ongoing development that is being led by Catellus Development Corporation, with more than 1,900 market-rate and affordable homes and apartments, mixed-use retail, office and institutional space, and 53 acres of open space expected for the long-gestating effort.
A March resolution directed city staff to create a financing plan to address the estimated $103 million gap for Colony Park, down from the initial price tag of more than $127 million in 2018. The memo’s “possible finance plan” suggests a tax increment reinvestment zone agreement with Travis County for $30 million, a city TIRZ that would capture 50 percent of possible revenue to generate $40 million, an $18 million contribution from the city’s Capital Improvement Program, and $10.8 million from a public improvement district.
City and county staff have been meeting in recent months regarding the proposed TIRZ structure, which would span 20 years and allow the county to retain $15 million in tax revenues related to maintenance and operations.
The city has also sent a letter to Travis County and the Austin Transit Partnership requesting participation in the TIRZ, with city staff tentatively scheduled to attend the July 26 meeting of the Travis County Commissioners Court to make a presentation on the Colony Park development.
In addition, the Austin Transportation Department, Austin Water and the Watershed Protection Department have helped to identify capital improvement projects related to or in close proximity to the Colony Park site. Drainage improvements could receive $6 million in city funding with preliminary engineering and design costs of $500,000 that could come from the 2016 transit bond funds.
Staff members are exploring funding options for the construction of the Colony Loop Drive connector, with general obligation bonds, certificates of obligation, and federal and state funding as possible sources. The capital project financing plan is expected to go to City Council before the end of the calendar year.
The city is devising strategies to stabilize the areas surrounding the 208-acre site to prevent the displacement of longtime residents as property values in the area increase with the arrival of new residents and businesses. The Housing and Planning Department will lead on programs involving the $300 million in anti-displacement funds approved in 2020 as part of the Project Connect ballot proposal.
The Austin Housing Finance Corporation has issued a solicitation for nonprofit entities involved in efforts to reduce residential displacement and create “economic mobility” opportunities for those most vulnerable to displacement forces, with a focus on those living within a mile of Project Connect stations and lines and in communities with chronic displacement risks. The application window for that solicitation closed in late June.
The Economic Development Department and other departments are considering creating a program that would make displacement navigators available to those who need assistance accessing services and opportunities to help them remain in their homes. Workforce Solutions Capital Area is planning an outreach event for the Colony Park area to promote workforce development training and job placement programs, with Central Health, Austin Community College and Catellus looking for ways to expand opportunities to nearby communities.
Lastly, the memo states the master development agreement for Colony Park is being held up by an amendment to the existing PUD plans, and the final rezoning of the property. That work is expected to cost $2.6 million, with a viable financing plan needed before the contract with Catellus can move forward.
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Colony Park rendering created by Farr Associates..
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