Backup — original pdf

Backup

Strategic Annexation and Development of Dog’s Head: A Vital Resource Opportunity City Manager’s Office | May 19, 2026 Current Challenge  On the economic development stage, Austin is playing catch up.  The City’s economic development efforts need to level the playing field to support Austin’s fiscal sustainability.  A key element is having shovel-ready sites ready to match the speed of opportunity.  Unfortunately, the existence of large shovel-ready sites is a competitive disadvantage in Austin. This is due in part to:  Fractionalized ownership of urban land  Holdout risk when selling  Outdated infrastructure  This context creates an economic disadvantage when it comes to fostering economic growth and matching the speed of opportunity. 2 The Fiscal Context: The Need for Action  The City of Austin is at a critical financial crossroads.  With state-mandated property tax caps (Senate Bill 2) limiting the City’s ability to raise revenue and the exhaustion of federal relief funds, Austin’s fiscal challenges are no longer a distant threat—it’s an immediate reality.  It is imperative to expand our tax base and establish new revenue sources that can be equitably shared across the community.  To mitigate this disadvantage, strategically annexing large sites within reach of the city’s boundaries can serve as a competitive advantage in the world of economic development.  It provides Austin the ability to be prepared when opportunity arrives. 3 Capturing a "Generational Economic Opportunity"  The 2,614-acre Dog’s Head Mega-Site in the Extraterritorial Jurisdiction (ETJ) under one ownership entity represents a generational economic opportunity.  Bounded between the Colorado river, US 183 and SH 130  The site sits within 15 minutes of downtown and 10 minutes from Austin-Berstrom International Airport (ABA), which is virtually impossible to find anywhere in the Austin MSA.  This advantage makes the site a prime candidate for a massive mixed-use hub, employment centers, secondary corporate campus and sports and entertainment to name a few. Dog’s Head Mega-Site 4 A Generational Economic Opportunity Annexing Dog’s Head is one of the most effective ways to secure a new, robust tax base and deliver long-term stability to Austin.  Securing a Shovel-Ready Future: In the global market, speed is the ultimate currency. Annexing Dog’s Head creates a primed location to capture the next wave of investment.  Risk Mitigation: A shovel-ready site removes the "unknowns" for investors. Austin becomes the default choice rather than a secondary option with a ready-to-develop location.  New Revenue Stream: This is more than just land; it is a stable long-term funding source to support core City services.  Based on early conservative development scenarios, Dog’s head has the potential to generate $1.5 billion in new property tax revenue over 30 years, providing a reliable annual infusion into the General Fund.  Tax Base Protection and Fiscal Resilience: High-value commercial projects funding critical needs without placing the full cost on existing residents. 5 Strategic Impact: Offense vs. Defense This is more than a real estate play; it is a defensive and offensive necessity to ensure Austin remains the economic heart of Central Texas 6 Proposed Development Agreement  45 Year Agreement between the City and Property Owner that applies today's Land Development Code except where modified by the agreement.  Includes commitments to:  Establish a publicly accessible trail along the Colorado River and open space throughout the property.  Provide Affordable Housing within the development.  Consents to annexation.  Contemplates:  Adoption of a regulating plan for the site.  Creation of tax increment reinvestment zone (TIRZ) to assist with constructing the infrastructure.  Failure to adopt a regulating plan or create a TIRZ allows for the property owner to be dis-annexed and released from the ETJ. 7 Public Finance (TIRZ)  Tax Increment Reinvestment Zone (TIRZ) proposal  Required economic/market analysis estimated to be complete by end of May/early June 2026  Staff will provide detailed briefings to Council in advance of July Council consideration and publish the preliminary project and financing plan as soon as possible  “But for” met due to extensive infrastructure needs in the area  Exploring potential Travis County participation  Developer will be required to include affordable housing in compliance with financial policy  Initial City property tax revenue estimates (SUBJECT TO CHANGE) Years 1-10 Years 11-20 Years 21-30 TOTAL Without Potential Tenant With Potential Tenant $40 million $425 million $1.0 billion $1.5 billion $175 million $950 million $2.4 billion $3.5 billion 8 Development Agreement: Next Steps  Development Agreement: May 21  Annexation: May 21 and effective June 1  TIRZ: July 23  Contiguous Roadway Annexation: July 23 9 Secure Austin’s Legacy Annexing Dog’s Head will:  Enhance Austin’s economic development competitive advantage  Create new revenue sources and lock in long- term tax base  Position Austin to attract major development and employers  Strengthen Austin’s regional economic leadership  Deliver shovel-ready sites that will make a difference in site selection  Provide an opportunity to collaborate and explore community benefits and amenities, given the broader economic potential the site will bring to the area. 10 Questions 11