Long Awaited Waller Creek Agreement

Austin and Travis County ready to unite on Waller Creek tunnel
Cost-sharing deal will revive dormant tunnel plans.

By Kate AlexanderAMERICAN-STATESMAN STAFFFriday, February 23, 2007

The Waller Creek tunnel, stymied for almost a decade by rising costs, is back on track now that Travis County appears ready to help Austin pay for the $124 million flood control project.
Travis County commissioners gave the city's latest financing proposal a friendly reception at a nonvoting session Thursday, which left Austin City Council Members Sheryl Cole and Betty Dunkerley optimistic that a partnership will be forged in the coming weeks.

Commissioner Gerald Daugherty said it was a no-brainer for the county to participate.
"It is such a good deal, you go: 'Are you serious?' " Daugherty quipped. "It is a pretty sweet project for us." To win the county's participation, Austin made the commissioners a risk-free offer. The two entities would create a taxing district along the downtown Waller Creek corridor to pay for the tunnel, which is expected to foster economic growth in the area.

Property owners within the district will pay the same tax rate as everyone else in the city. But once the Waller Creek Tax Increment Finance district is created, much of the new property tax revenue from that area will be dedicated to paying off the debt used to build and operate the tunnel.

Over 20 years, Austin will put all of the new property tax revenue from the district toward the project, and Travis County will contribute half of its take from the area. The other half of the county tax money, estimated to be almost $61 million over the duration, will go to its general operating fund. That money pays for the criminal justice system, roads and other basic functions.

If construction costs rise or the expected development does not happen, Austin will cover the gap. The city will pay for the last 10 years of the 30-year debt alone. "This project is important enough for us to get done that we're willing to take that risk," said John Stephens, the city's chief financial officer.

Austin voters approved $25 million in bonds to build the tunnel in 1998, but that amount proved far too small. Since that time, the project design and its financing have been repeatedly reconfigured to find a solution. It appears the stars have now aligned. As downtown undergoes a renaissance, the blighted Waller Creek corridor will be ripe for development. That development can then pay for the tunnel to control the flooding. Without the tunnel, more than 40 buildings and countless people would be threatened in the event of a 100-year flood, which has a 1 percent chance of occurring in any year. In January, emergency workers had to rescue a man trapped in the rushing waters of Waller Creek. He had jumped in to save a woman who was swept away.

With the tunnel, the water level could be controlled to ensure a clean, constant flow and provide an amenity similar to San Antonio's River Walk, city officials say. The plan does not include money for trails or other infrastructure along the creek. The changed composition of the commissioners court also opened the door for the deal. Karen Sonleitner, the county's most vocal tunnel skeptic, lost her re-election bid. Her successor, Commissioner Sarah Eckhardt, endorsed the project and the partnership. "This seems to be the best and frankly only" option, Eckhardt said.
kalexander@statesman.com; 445-3618