HealthSouth Work Session Draft Motion Sheet

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Ashley Richardson
Posts: 29
Joined: Mon Apr 17, 2017 1:34 pm

HealthSouth Work Session Draft Motion Sheet

Post by Ashley Richardson » Mon Jan 25, 2021 2:05 pm

On behalf of Council Member Tovo:

Colleagues, as a follow-up to the draft motion sheet that I posted to the message board on December 10, 2020, please see below for the latest iteration. I intend to keep working on this draft with Legal, but am posting today for the purposes of our conversation during work session.





I move approval of Item #13 to negotiate and execute an exclusive negotiating agreement with Aspen Heights Partners and to include terms in the eventual Master Development 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 shall keep Council consistently apprised as to the status of the negotiations and shall return to a Council work session within 4 months with an update. If in the course of negotiations Aspen Heights articulates substantial concerns about any of the below community benefits, the City Manager shall return to Council prepared to share that information and to seek further direction from Council.

In this negotiation, the City Manager is directed to include the following provisions in the terms of the Master Development Agreement:

• Add more affordable housing to the project to such an extent that affordable housing is the site’s significant and central use, Staff may consider using 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 include a provision that allows for profit-sharing for the City beyond a certain internal rate of return once costs are covered. The profits generated by this tract that return to the City shall be used for the creation of Permanent Supportive Housing or vouchers and services for individuals experiencing homelessness.

• Require an affordable housing term that mirrors the length of Aspen Height’s ground lease 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.

• If the affordable housing term does not mirror the ground lease term, include a provision to allow the City to renegotiate the affordable housing or 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.

• Require the tenant protections currently contained within the City’s Rental Housing Development Assistance requirements.

• Designate a certain percentage of the income-restricted affordable rental homes to be reserved for voucher holders and Continuum of Care units, especially for families with children experiencing homelessness.

• 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 should not exceed 30% of a household's income at 60% MFI or 50% MFI income levels and the income restrictions (and rent restrictions) should be adjusted for household size under HUD guidelines.

• Add on-site high-quality affordable childcare as a use within the proposal.

• Based on current trends and projections, reduce the amount of office space as much as financially feasible.

• Provide spaces for communal “learning spaces,” computer labs and other spaces that include technological resources for the residents, especially the residents who are children.

• 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.

• For the local retail / commercial / office components of the proposal, 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 an agreement to ensure commercial tenants will include a significant percentage of independent, local merchants.

• Ensure the inclusion of our current policy and as it may be amended in the future, 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 should 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.

• Ensure that members of the public be able to access the viewing deck without having to be a customer of any business in the buildings.

• Include a term 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.

• Ensure 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.

As stated above, the City Manager shall return to Council in a Council work session if Aspen Heights will not include any of the above provisions in the Master Development Agreement to provide a detailed explanation as to the rationale.

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. As the central use of this tract is intended to be housing, specifically affordable housing, Economic Development Department shall not be the primary lead in this negotiation.

• 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.

• 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

Kathie Tovo
Posts: 102
Joined: Thu Oct 30, 2014 11:18 am

Re: additional note

Post by Kathie Tovo » Mon Jan 25, 2021 2:16 pm

One more important note:

I've structured this motion in such a manner that it will *not* trigger a need to resolicit proposals for this project. I meant to indicate that in my comments during the work session.

Thanks! I look forward to hearing any questions or ideas you may have.


Kathie Tovo
Council District 9

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