Houston developer offers to pony up for affordable housing - but is it enough?
AMERICAN-STATESMAN STAFF
Thursday, September 24, 2009
As part of a special zoning agreement, a developer who wants to build an upscale East Riverside Drive apartment complex has offered almost $4 million for low-income housing in Austin. But as the City Council prepares for a possible vote today on the plan, a last-minute question has emerged: Is $4 million enough?
Grayco Partners says it's giving the city a generous contribution to offset the loss of 600 relatively low-cost units, in addition to enhancing public waterfront access and numerous other concessions.
But critics of the project say that, based on an opinion issued late Tuesday by the city's legal department, Grayco should have to pony up closer to $8 million — an amount Grayco says would kill the project.
The $200 million project — which pits a Houston developer, Grayco, and advocates of a denser urban core against neighborhood activists who oppose high-rise development near Lady Bird Lake — was postponed by the council a month ago and has become a test case for new city zoning rules and priorities.
Differing interpretations of those rules have bogged down the project and may further delay a final council vote.
Grayco and city officials were working frantically Wednesday to resolve those differing interpretations.
Council members said some significant questions remain unresolved going into today's council meeting.
"Clearly there's some confusion in all this," said Council Member Randi Shade, who added that she thinks a final vote is unlikely today.
The developer wants to build four buildings, with 1,200 apartments and 97,000 square feet of street-level retail space, on about 30 acres bounded by Riverside, South Lakeshore Boulevard and Tinnin Ford Road.
Grayco wants permission for one building to be up to 120 feet tall and two others to be up to 90 feet tall.
But the area's zoning rules cap heights at 40 feet.
So Grayco is asking for special status as a "planned unit development" — a designation that allows the City Council to waive height limits and other zoning regulations.
The over-arching idea is that a development can be higher, denser or otherwise different than zoning normally allows if its builders can prove the changes make it "superior."
That judgment is at the discretion of the City Council.
Previously, debate had centered on whether Grayco's buildings were too tall and whether the development would give the city enough other goodies to be worth the extra height.
Grayco's proponents said the project's height is fine given what the developer is offering in exchange: more people living in the city center, increased waterfront access, $25,000 for renovation of the historic Norwood House nearby, and a retention pond that will capture about 22,000 pounds of pollutants that wash into Lady Bird Lake every year, among other concessions.
But critics said the project violates the spirit of new height limits established along the lake earlier this year. Neighborhood activists pushing for those limits said they feared high-rise projects could spoil vistas of the lake and block public access.
Late Tuesday, the city's legal staff threw a curveball.
Earlier this year, the council passed guidelines to set criteria for a "superior" development worthy of special zoning status.
Among those criteria was a donation to build low-income housing or pay property owners to provide it. In this case, low-income means a household income of $58,650 for a family of four.
Grayco figured that amount was about $3.7 million to help replace elsewhere the 600 units that would be torn down to make way for the project.
But the city's legal department, interpreting the guidelines differently, calculated Grayco would need to contribute $7.8 million, according to a memo sent Wednesday afternoon to council members.
Steve Drenner, Grayco's attorney, said the requirement is "beyond the pale."
"We can't get anywhere near it," he said.
The council has discretion to deviate from that, or any other, criteria.
Council members reached this week said they generally wanted to follow the rules, but some were considering whether to make an exception. Council Members Bill Spelman and Chris Riley said they were still trying to determine the proper trade-off for 600 units.
"I'm pleased to see this kind of redevelopment in such a crime-filled area," Council Member Sheryl Cole said. "From what I can see, it meets our criteria and should be approved."
Council Member Laura Morrison, a Grayco critic, said the council should require the entire $7.8 million. Morrison said that's one of a number of problems she has with the project.
"At this point," Morrison said, "I'm not inclined to support it."
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