Item 2b. AEDC Presentation SCWAB 01.15.21 — original pdf

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AEDC Monthly Update Overview and SCW "But For" TIRZ Analysis JANUARY 2021 INTERIM DRAFT - CONFIDENTIAL TREATMENT REQUESTED UNDER FOI South Central Waterfront (SCW) Overview HR&A Advisors, Inc. PANYNJ Advertising | 2 SCW History | Background Town Lake Corridor Study established principles and City Council initiated the development of a Small goals for future development Area Plan to govern public along the waterfront. priorities for the district. City Council adopted SCW Vision Framework Plan, including a 20% district affordability requirement. 1985 2013 2016 2012 2014 Council appoints Waterfront Planning Advisory Board to host citizen engagement and public workshops. Draft Vision Framework Report highlighted community priorities and identified needed plan components. 2012-2016: the City hosted 19 public events with nearly 2,000 participants. Austin EDC South Central Waterfront | 3 SCW History | Recent Efforts As recommended by SCWAB, Finance Department hires CMR to conduct TIF financial analysis, including revenue projections. 2018 City updates SCW Modified Physical Framework and ECONorthwest development feasibility analysis. Austin voters approve Project Connect bond, which will fund two light-rail transit stations in the district. May-Sep. 2020 Nov. 2020 2018 Oct. 2020 Ongoing SCWAB recommends the creation of an economic development entity to implement the Vision Plan. City Council establishes the Austin Economic AEDC regularly briefs the SCWAB on strategy for Development Corporation to help manage the district. implementing the Vision Plan, including a potential TIRZ. 2016-Today: the South Central Waterfront Advisory Board oversees Vision Plan implementation. Austin EDC South Central Waterfront | 4 SCW Today The 118-acre district primarily consists of low- density commercial and warehouse uses surrounded by large, underutilized parking lots. The City of Austin controls one parcel within the district – One Texas Center. The remaining sites are controlled by 29 private landowners (excluding Riverwalk condominiums). The Cox Family (owners of Austin Statesman) controls the largest site, totaling 19 acres on the waterfront. Their development partner, Endeavor, has applied for a PUD to redevelop the site. Statesman Site OTC Austin EDC South Central Waterfront | 5 SCW Vision As adopted by City Council on June 16, 2016, the SCW Vision Framework Plan prescribes a districtwide network of green streets, parks, trails, and 17 acres of open space, while supporting ~530 affordable housing units. Connectivity Open Space Streetscapes Affordability Enhance connections to and along the waterfront Expand open spaces and create great public places. Establish a lively, safe and attractive pedestrian environment. Include 20% new housing units as affordable. Austin EDC South Central Waterfront | 6 SCW Program PRIVATE DEVELOPMENT PROGRAM PUBLIC REALM IMPROVEMENTS 2,839 residential units 2.8M sf office space 17 acres 2.6 miles new parks, trails, new & refurbished & plazas roadways 352K sf retail space 220K sf hotel space 2.8 miles streetscapes & green infrastructure Austin EDC South Central Waterfront | 7 "But For" Analysis HR&A Advisors, Inc. PANYNJ Advertising | 8 Need for TIRZ Over two-thirds of new private development in the South Central Waterfront, including the Statesman site, is infeasible without public investment. The market only supports a small percentage of sites as condo and office without public action. There is a private sector feasibility gap on 65%+ of sites requiring public action to enable development at all. COA goals for infrastructure, sustainability & affordability (SCW Plan) would require additional public investment. Austin EDC INTERIM DRAFT - CONFIDENTIAL TREATMENT REQUESTED UNDER FOI South Central Waterfront | 9 Three Development Scenarios Based on prior City and ECONorthwest analysis 1 2 3 No Investment Requires developer funding for vertical costs & baseline infrastructure. Baseline Feasibility Covers baseline costs to enable private development on all parcels. Full City Vision Funds infrastructure & affordability objectives envisioned in SCW Plan. Austin EDC INTERIM DRAFT - CONFIDENTIAL TREATMENT REQUESTED UNDER FOI South Central Waterfront | 10 Scenario Summary ESTIMATED BUILDOUT BY SCENARIO 6.2M SF 1.4% Affordability 6.4M SF 20% Affordability* 1,860 Units 837 Units 344K SF 225 Rooms 2,002 Units 837 Units 352K SF 225 Rooms 7M SF 6M SF 5M SF 4M SF 3M SF 2M SF 1M SF 0M SF 1.9M SF No Affordability 225 Rooms 0.7 M SF Scenario 1 No Investment 837 Units 104K SF 2.8 M SF 2.8 M SF Austin EDC INTERIM DRAFT - CONFIDENTIAL TREATMENT REQUESTED UNDER FOI South Central Waterfront | 11 Scenario 2 $260M Investment Office Hotel Retail Condo Rental Scenario 3 $500M Investment *13.3% onsite affordability Investment Required for District Development $260M to enable baseline, $500M to enable inclusive and affordable growth REQUIRED SUBSIDY BY SCENARIO 6.4M SF 20% Affordability $240M 6.2M SF 1.4% Affordability 1.9M SF No Affordability $260M $260M Scenario 1 Scenario 2 Scenario 3 Austin EDC INTERIM DRAFT - CONFIDENTIAL TREATMENT REQUESTED UNDER FOI South Central Waterfront | 12 $600M $500M $400M $300M $200M $100M $0M Next Steps HR&A Advisors, Inc. PANYNJ Advertising | 13 TIRZ Formation Work Underway | Near Term Engaging CMR to Update Analysis • Coordinating with Finance to have CMR update their 2018 tax revenue analysis But-For Refinement and Benefits Case Economic Feasibility Analysis • Refine but-for analysis • Aggregate analysis to • with updated data Estimate project benefits, including enhancements to property value • Summarize other SCW plan benefits date to determine economic feasibility of TIRZ in support of SCW plan TIRZ Documents • Coordinating with City staff to draft TIRZ Ordinance, Project Plan, and Preliminary Financing Plan • Will recommend creation of a board of directors comprised of SCWAB members Austin EDC South Central Waterfront | 14 TIRZ Execution Next Steps | Long Term Return to Council for TIRZ Hearing Goal to Pass Resolution Forming TIRZ February 8th February 18th Finalize TIRZ Financing Plan Mid/Late 2020 Issuance of Bond Financing TBD: Project- Specific Austin EDC South Central Waterfront | 15 Questions? CONFIDENTIAL – DO NOT SHARE Appendix HR&A Advisors, Inc. PANYNJ Advertising | 17 Scenario 1 | The district only supports 3 condo developments and 1 office developments without public intervention. Statesman Site Austin EDC CONFIDENTIAL – DO NOT SHARE South Central Waterfront | 18 3 1 0 0 Condominium (inc. mixed) Office Multifamily Rental OTC (100% Affordable) SCW Vision| The current plan for the SCW anticipates new development totaling 6.4M sf over 18 parcels. Austin EDC CONFIDENTIAL – DO NOT SHARE South Central Waterfront | 19 3 7 7 1 Condominium (inc. mixed) Office Multifamily Rental OTC (100% Affordable) SCW Vision | The SCW Plan envisions additional commitments to public infrastructure and affordability that require the full subsidies in Scenario 3. SCW PHYSICAL FRAMEWORK COSTS AFFORDABILITY REQUIREMENTS Reclaimed Water $2.2 M $252M infrastructure costs 20% affordable units 10-20% units provided onsite (4.15%+ at Statesman) Green Infra. $5.0 M Utilities $32.5 M Streetscape $51.2 M Open Space $85.2 M Roadways & Drainage $75.8 M in-lieu fees Condos Rentals Bldgs. pay in-lieu fees to meet 20% requirement. District subsidies fund unit shortfalls below 20%. Austin EDC CONFIDENTIAL – DO NOT SHARE South Central Waterfront | 20 COA TIF Policy An SCW TIRZ can capture the tax increment created by: 1) Existing property value increases and 2) New development. This new development includes both development enabled only by the TIRZ (to right in yellow) and development that might otherwise have occurred (in orange). Source: https://www.austintexas.gov/edims/document.cfm?id=325495 Memo to Council Austin EDC South Central Waterfront | 21 HR&A Advisors, Inc. PANYNJ Advertising | 22