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

The Dawn of North Downtown

THE DOMAIN

By Shonda NovakAMERICAN-STATESMAN STAFF

Tuesday, February 27, 2007
Breakfast at Tiffany's won't be out of the question for residents at the Domain, where 390 luxury apartments are side-by-side with the most upscale retail in Central Texas.

Domain dwellers will be able to live upstairs from the famous jeweler and down the street from Neiman Marcus and Macy's. They'll be able to window-shop after hours at other new-to-Austin stores including Louis Vuitton and Barney's Co-Op. They will be able to walk to the Oakville Grocery to pick up a gallon of milk or a $200 bottle of wine, or grab a late-night dinner at restaurants including McCormick & Schmick's, Jasper's and Kona Grill.

Apartments and townhouses are in six buildings; the tallest has four floors of apartments above two levels of shops. One of the larger units has 1,164 square feet plus a balcony. The Domain is on North MoPac Boulevard (Loop 1) between Braker Lane and Burnet Road and has already attracted some renters.

Rents in the development range from $1,030 a month for a one-bedroom apartment with 678 square feet to $2,430 a month for a one-bedroom loft, though 10 percent of the units have been reserved at below-market rents for people in lower income levels. That was part of the deal developers made with the city.

Such high-style living comes at a price: Rents start at $1,030 a month for a one-bedroom apartment with 678 square feet. The highest-priced units are in the block next to Neiman Marcus. One unit in that section, above Tiffany, with 1,164 square feet plus a balcony, will rent for $2,285 a month. The most expensive unit is a one-bedroom, one-bathroom loft that will rent for $2,430 a month. Open-air developments that blend retail, residential, office and other uses are cropping up across the country, but the Domain is the first in Central Texas, said Kent Collins, a partner with Centro Partners LLC, the local developer involved in the $30 million residential portion. "This is by far the largest, most complex mixed-use project in Austin with residences on top of retail," Collins said. "Nowhere else is there 700,000 square feet of world-class retail with innovative apartments above."

Indianapolis-based Simon Property Group Inc. and Austin-based Endeavor Real Estate Group are developing the retail part of the Domain, which opens March 9. The $245 million center is on North MoPac Boulevard (Loop 1) between Braker Lane and Burnet Road. The apartments and townhouses are in six buildings with brick, limestone, and sage- and butter-yellow stucco exteriors; the tallest building has four floors of apartments above two levels of shops.

Columbus Realty Partners Ltd. is the lead developer on the residential portion; its partners are Simon and GE Asset Management, the investment arm of General Electric Co. Leasing agent Lincoln Property Co. has signed up 17 tenants, and the first few have moved in. Under a tax incentives package the city approved in 2003, the developers agreed to reserve 10 percent of the units at below-market rents for people in certain income ranges. Rents will range from $630 to $747 a month for people who earn $27,000 to $32,000 a year. That makes them affordable to people such as Mando Perez, who learned he was eligible when he started working in the Domain leasing office. "I jumped on it," said Perez, whose commute will be an elevator ride down to the leasing office. "It allows you to live at a place you normally wouldn't be able to afford." Perez is looking forward to living, working and shopping in one place. "You can do it all in your own little area," he said. "It's like a city within a city." Jason Pickard, who sells new homes for Gehan Homes in Round Rock, stopped by the leasing office last week to take a look. The Domain seems like "fine and fun living," he said. His commute would be easier with the recent opening of the Texas 45 tollway. The Domain also includes 90,000 square feet of offices and eventually is expected to have a hotel and movie theater.
snovak@statesman.com; 445-3856