Recommendation Number 20260323-003: FY’26-27 Budget Recommendation — original pdf

Recommendation

RECOMMENDATION TO COUNCIL URBAN RENEWAL BOARD Recommendation Number: 20260323-003: FY’26-27 Budget Recommendation Date of Approval: March 23, 2026 Recommendation: Approve the base budget for the Urban Renewal Board (the “Board”) consistent with the approved FY 2025-26 budget, including a 5% increase for inflation, and providing an additional $100,000 to support additional planning in connection with the proposed development project on Blocks 16 and 18 (the “Project”) and the achievement of the goals recommended in City of Austin Resolution 20210902-048 reaffirming the designation of the African American Cultural Heritage District and describing various arts-related uses requested to be considered for inclusion in the Project (the “Resolution”). There is very significant momentum for the Development Project as the Board has diligently continued its work alongside Rally Austin and Pleasant Hill Collaborative, the developer recommended by URB and approved by City Council. During the past year, predevelopment work has progressed under the Exclusive Negotiating Agreement, and City Council approved providing credit enhancement support to the Project that will improve its access to favorable rates of financing. The Board also has diligently continued its community engagement through the URB Stakeholder Working Group and directly with other area stakeholders. The Board also expects to adopt a name for the Project at its next meeting – SOUL on East 11th. This is the culmination of a naming process undertaken by our community engagement team and that received significant community input. As we continue predevelopment, we hope to engage in additional planning initiatives relating to: 1. The future of the Board beyond the completion of the Project; 2. The best use of predevelopment and activation activities to complement other planning efforts and projects being undertaken in the areas around the Project including without limitation the “cap and stitch” projects expected at 11th Street, the continued implementation of Project Connect and associated transportation improvements, and the continued development of the African American Cultural Heritage District; and 3. Connecting with other property owners both in the Urban Renewal Plan area and the larger surrounding area to fulfill the goals set out in the Resolution. We are requesting a total FY 2025-26 budget of $150,000 in part to engage with consultants for additional planning to ensure that we properly coordinate pre-development and development activities to connect with and enhance each of these other monumental efforts to improve our city and that we fully leverage the Project to achieve the goals of the Resolution. 1 of 3 Description of Recommendation to Council: The Board’s budget for FY 2025-2026 is $44,000. For FY 2026-2027, the Board requests this base funding amount be increased for inflation and supplemented with funds to a total amount of $150,000 to support additional operational expenses, planning initiatives for the Board, and additional planning relating to the Development Project. Rationale: Activation of Blocks 16 and 18 As the Project moves into the pre-development phase, there have been initial discussions about the potential additional activation of Blocks 16 and 18 (and particularly Block 16; Block 18 for the past several years has been licensed to a nonprofit for the operation of Kenny Dorham’s Backyard) to make additional beneficial use of those parcels and to take advantage of opportunities to engage with the community in advance of pre-development and construction. Additional funds are requested to engage in planning related to potential activation opportunities and preparing the parcels for use for such opportunities, including one-time and reoccurring events, and temporary parking uses. Future Planning As progress continues on the Project, the Board has engaged in preliminary discussions regarding what the future of the Board might be once the Project is completed. Many similarly situated urban renewal agencies and boards across the country have transitioned over time into other district support organizations once the goals of their original urban renewal plans have been accomplished. Some agencies and boards more directly guide development in the areas they oversee, using tools like eminent domain to acquire and develop properties and to encourage continued development of properties owned by others. The Board would like to build on the engagement accomplished in the work to date and plan for a future as a longer-term district support organization or more active development body as has been done by similar bodies nationwide. Additionally, the unique proposal by the development team for the Project, selected through a competitive RFP process in 2024, includes extraordinary public benefit such as a diverse mix of affordable housing and affordable commercial and creative/cultural space. In comparison to a more standard commercial mixed-use development, the proposal by the development team includes options for future public ownership of significant portions of the Project. Part of the Board’s critical work in the coming years, while the development team advances specific building and construction plans for the Project, will be to look at the long-term governance of the future public assets as well as to consider what additional types of development activities could help support the surrounding Urban Renewal Plan area over the long term. This planning may include the consideration of a variety of public and private partnerships and cooperation and collaboration with a variety of parties, as well as additional ways to provide long term revenue to the Urban Renewal Plan area. The Resolution requested that the Board consider including in the Project a cultural venue and spaces for a variety of arts-related uses. The Project is delivering on that request, with current plans including a significant cultural venue and office and other spaces intended for use by nonprofit and other arts organizations. As there is a limited amount of space in the Project and it provides affordable housing and other public benefits sought by the community, not all of the uses described in the Resolution can be housed within the Project. The Board believes that it would be prudent to determine how other properties and property owners in the surrounding area might be able to provide for uses that are not able to be located directly within the Project. 2 of 3 Therefore, the Board would like to engage in a strategic planning process to determine its best path forward, from continuing to serve as a conduit for community input for development in the Urban Renewal Plan area, to engaging in various activities to provide support for the area, to potential future governance models, and to determine how to coordinate efforts with other properties and property owners in the area to fulfill the goals set out in the Resolution, and requests funding to engage with consultants as it begins that process. It is intended that this work will be in coordination and collaboration with various City departments undertaking district policy work such as the City Planning Department and the Economic Development Department, as well as area nonprofit organizations such as Six Square and other area stakeholders. Connection of the Development Project to Changes in the Surrounding Area In addition to the Development Project, other major changes are coming to East 11th Street and the surrounding area. The Interstate 35 expansion will begin, and with it cap and stitch projects along the expansion area, including 11th Street. Project Connect will continue and may bring transportation planning and other improvements to the corridor. The newly created department of Arts, Culture, Music and Entertainment will continue strategic and other planning related to the African American Cultural and Heritage District. The Board would like to engage in additional planning to ensure that the Development Project is connected to and complementary to each of these efforts and others that will be occurring. Motioned By: Commissioner Tetey Seconded By: Commissioner Davis Vote: 5-0 For: Chair Escobar, Vice Chair Pierce, Commissioner Brown, Commissioner Davis, Commissioner Tetey Against: N/A Abstain: N/A Off the dais: N/A Absent: Commissioner Motwani, Commissioner Watson Attest: Chair Manuel Escobar 3 of 3