HealthSouth and real estate IFC

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Kathie Tovo
Posts: 128
Joined: Thu Oct 30, 2014 11:18 am

HealthSouth and real estate IFC

Post by Kathie Tovo »

Dear Colleagues,

This Thursday, we have an opportunity to make a declaration: Downtown is for everyone.

Before we vote on Item #12, I want to take a moment and reflect on the huge amount of work that has taken place since we strategically acquired the HealthSouth property, a prime piece of Downtown real estate poised to deliver us sorely needed long-term community benefits.

When former Council Member Ora Houston and I initiated the conversation to develop this property for affordable housing, we knew the potential it could offer to our community, and I am thrilled to see that one day this property will be called “HOME” to hundreds of families that could not otherwise afford to live Downtown.

As some of us may recall, since the City became the steward of this property, suggested plans for this parcel have been diverse and varied, ranging from using it as short-term non-congregate shelter (long before COVID-19 made this a more standard practice) to selling and permanently removing it from the City’s portfolio. I appreciate the conversations that our current Council has had about the best way to achieve the original vision of retaining the property and developing affordable and market-rate housing. It has been a long journey – and an illuminating and often challenging journey – and one that I will always remember when I think back on my time serving the City.

As we have worked to create opportunities for affordable housing on this City-owned tract, the belief that has guided my decision-making has always been that we should use our public tracts to create affordable housing in places where the market will not. I believe in an Austin where everyone can be granted access to the richness of this community, even in the absence of wealth – and I believe that this right extends to Downtown. I believe that Downtown belongs to everyone, including families, nurses, custodial workers, restaurant workers, and more, and providing affordable units on the HealthSouth tract will make living Downtown accessible to some of the working people of Austin who keep this community going and growing.

We have clear challenges in this city we all love. Developing city-owned property to deliver on key priorities, such as affordable housing and child care, is one of the most critical ways we can address the challenges being experienced by Austinites. The item placed before us on Thursday’s agenda is a marked improvement from when we last deliberated as a body. Understanding that this project now requires additional City subsidy, I believe it improves on the affordable housing proposal, as well as the terms for the affordable, high-quality child care facility desperately needed by workers in the Downtown area.

I am excited by the prospects associated with this proposal. Great thanks to the interdepartmental staff team that led in the negotiations – they have worked tirelessly to secure the best benefits for the City, and I appreciate their commitment to this aim.

I do believe there is room for further improvement, including adherence to the City’s living wage in the commercial spaces and child care facility, as well as a commitment to an affirmative marketing plan to ensure the proposed multi-bedroom units are marketed toward multi-generational households. I have submitted a few questions in the Q/A, including one related to the tract’s appraisal that will provide useful information for my own deliberations. My office is also in conversation with those in the childcare industry about whether these provisions will be sufficient to support an affordable childcare option. I am hopeful that we can achieve a consensus on these elements.

On Thursday, I will be asking the Council vote to approve negotiations for the Master Development Agreement. Given the complexity of this proposal and the previous negotiations, my motion will also include direction that the staff return to Council with a separate motion to execute the Master Development Agreement so that Council and the public have the important opportunity to review the document prior to final approval. We have often separated negotiation and execution on complex and high-priority projects and issues, and I regard it as critical in this circumstance. This deal is just too important, and I believe the City Council must see the detailed-level agreement before final approval.

As I mentioned at the beginning of this post, I have learned a great deal from this process. It has allowed me to identify multiple ways that the City can improve its processes to deliver higher-quality projects on City-owned lands in a standardized fashion, providing predictability to prospective partners and greater assurances that City redevelopments will consistently deliver the greatest and deepest community benefits possible.

To that end, I have brought forward a resolution with directives that will enable the City to structure a clear process for delivering real and deep community benefits for future projects, such as the redevelopment of One Texas Center for affordable housing. I have posted this item for the September 29, 2022, agenda along with a request for postponement; my intent is to afford our Council the opportunity over the next few weeks for robust discussion with one another, our staff, and public stakeholders.

Again, grateful thanks to our City’s interdepartmental HealthSouth negotiating team and to our city and Council staff (both present and former) who have assisted in bringing this project to fruition. I look forward to discussing HealthSouth and our broader strategies regarding our real estate portfolio with all of you.


Kathie Tovo
Council District 9