HealthSouth - 1215 Red River and 616 East 12th St. - January 2021

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Ashley Richardson
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Joined: Mon Apr 17, 2017 1:34 pm

HealthSouth - 1215 Red River and 616 East 12th St. - January 2021

Post by Ashley Richardson » Thu Dec 10, 2020 5:54 pm

On behalf of Council Member Tovo:

Dear colleagues,

Below is draft direction I have prepared for the HealthSouth redevelopment. Although I will likely add or change some of these elements as I get additional information from our staff and hear community input, I am posting this draft today so that our Council and community can begin a dialogue about these points.

In addition, I will relay to City Manager Cronk again my suggestion that staff construct a project page on the City of Austin website or update the existing Redevelopment Division’s 1215 Red River & 606 East 12th website to allow members of the public to submit questions and ideas. I am hopeful that public portal can be opened this month.

Thank you all again for our collaboration.




I move approval of Item #XX to negotiate an exclusive negotiating agreement with Aspen Heights Partners and to include terms in the eventual master developer agreement for the lease and redevelopment of 1215 Red River and 606 East 12th, the former HealthSouth tract, and to return to Council prior to execution of that master development agreement. The City Manager should keep Council apprised as to the status of the negotiations and return for further direction if substantial concerns arise.

In this negotiation, the City Manager is directed to include the following provisions in the terms of the master development agreement:

• More affordable housing to such an extent that affordable housing is the site’s primary use, be it through a 9% Low Income Housing Tax Credit application or a General Obligation bond subsidy if necessary.

• Similar to other City of Austin master development agreements, a provision that allows for profit-sharing for the City beyond a certain internal rate of return once costs are covered.

• Require an affordable housing term length of 99 years for rental and ownership.

• Alter the unit makeup of the affordable units to reflect a significant shift from one-bedroom and studio homes to two- and three-bedroom homes to align with recommendations from the 2008 Families with Children Task Force.

• Include a “Right of First Refusal” provision for the City of Austin that would be enacted upon expiration of the affordability terms or if the affordable rental homes covert to a condominium use.

• Require source of income non-discrimination and the acceptance of Housing Choice Vouchers, the City of Austin’s local housing vouchers, or other rental subsidies for the affordable rental homes.

• Designate a certain percentage of the income-restricted affordable rental homes to be reserved for voucher holders and Continuum of Care units.

• For the reasons outlined in University of Texas School of Law Clinic Entrepreneurship and Community Development Clinic November 2020 report, “Public Facility Corporations and the Section 303.042(f) Tax Break for Apartment Developments,” the rent charged (including a utility allowance) in the affordable rental units shall not exceed 30% of a household's income at 60% MFI or 50% MFI income levels and the income restrictions (and rent restrictions) shall be adjusted for household size under HUD guidelines. ... Report.pdf

• Include a study by a qualified acoustical consultant documenting current sound conditions in the area and prescribing a plan for construction and design solutions to minimize sound impact to residential portions of the redevelopment not only for any contemplated venue uses within the project, but also for amplified sound from the adjacent Waterloo Park.

• Require the local retail / commercial / office components of the proposal to include the City of Austin’s living wage standard, including a mechanism to ensure that these wages mirror the City of Austin’s living wage as it increases in future years.

• Craft agreement to ensure commercial tenants will be independent, local merchants.

• Ensure the inclusion of our current policy, in which the sale price of the affordable homes must be no more than 3 times the household’s annual income (or 3.5 times the household’s income if someone in the household has completed approved homebuyer counseling or education). Ownership units must also subject to an equity cap, where the homeowner’s equity can increase up to 2 percent per year for 30 years (at which point no additional equity can be earned). This allows the homeowner to gain some appreciation at resale, while also preserving the affordability of the home for future income-eligible homebuyers.

• Require that members of the public be able to access the viewing deck through a means other than the proposed restaurant.

• Codify the commitment that park / green space be fully accessible to the public and ensure that the developer provides and maintains obvious, discernible street-level signage in English and Spanish to that effect.

• Require that any pool or aquatic amenity be fully accessible to the public at no charge. Any such facility should be included on the aforementioned signage.

• Specify that costs for maintaining the park and any aquatic facility will not be the responsibility of the city.

• Achieve LEED Gold rating or 4-star Green Building standards.

• Negotiate inclusion of city uses within this office space, including the Downtown Austin Community Court.

The City Manager is directed to:

• Ensure that, at a minimum, the Finance Department, Office of Real Estate, Parks and Recreation Department, and Housing and Planning are deeply involved and engaged in the negotiation of the terms of the Master Development Agreement.

• Host at least one public session prior to returning to Council to provide information and receive feedback on the proposal and project terms, in a manner similar to public discussion and engagement opportunities at the Seaholm Intake Building and other public projects of this nature.

• Conduct briefings at the Community Development Commission and Design Commission and provide these Commissions the opportunity to give feedback on the proposed terms of the Master Development Agreement prior to its return to Council.

• Explore the inclusion of on-site high-quality affordable childcare as a use within the proposal and return to Council detailing its feasibility and options for inclusion in the negotiation for the master development contract.

• Provide a detailed analysis of economic and use impacts of including AE’s district cooling plant facility in this project.

• Provide information regarding how this project might be managed by the Austin Economic Development Corporation to ensure maximum community benefits.

• Estimate the amount of property tax revenue that could flow to the Affordable Housing Trust Fund as a result of taxable uses on this site.

• Provide information about the funding available for land costs associated with the AE district cooling plant facility and the Downtown Austin Community Court.

• List any waivers or approvals required to execute development as proposed.

• Provide information about what real estate costs the City would expect to incur if the DACC and the AE district cooling plant facility are located elsewhere in the Downtown area.

• Provide information about what ways the commercial space at the HealthSouth redevelopment could help further the City’s goal to implement a portfolio approach to city real estate.

• Provide an analysis of how creating office space for the City at HealthSouth could open up possibilities for more affordable housing at One Texas Center.

The City Manager is directed to return to Council at least eight weeks prior to the Recommendation for Council Action as it relates to the execution of the agreement to detail their findings.
Policy Aide
Office of Kathie Tovo, Council Member District 9