10/13 - Item 40 - Real Estate IFC
Posted: Wed Oct 12, 2022 2:14 pm
Colleagues,
Included below is a link to a revised draft of Resolution 40, establishing policies for the City’s management of its real estate assets. This draft maintains the significant actions articulated in Draft 1 that posted on 9/23 as well as reflecting many edits that respond to feedback we’ve received from city staff. I believe I’ve addressed most, if not all, of their questions and concerns, but I may have additional edits as they – and my co-sponsors -- review this clarified version.
Resolution: http://assets.austintexas.gov/austincou ... 41426.docx
Redline: http://assets.austintexas.gov/austincou ... 141029.pdf
Generally:
This Resolution aims to set out a consistent, clear process enabling Council to provide input earlier in the decision-making process for potential sales, purchases, redevelopment, and use of City properties. It sets up processes and general policies without being too prescriptive – and maintains the important role that City staff play in using their professional judgement and expertise to advise the Council in its decision-making. This revised process will:
• ensure we’re actively identifying opportunities to achieve important community benefits, such as co-locating childcare facilities and income-restricted housing alongside City facilities in areas of town with higher land values
• encourage collaborations among other public entities, including the Austin Economic Development Corporation
• improve efficiency and save staff time by including Council feedback at the beginning of a process and avoiding delays at the end of the transaction when delays can be more problematic
For your convenience, I am summarizing some of the more significant changes based on staff feedback and additional conversations:
1) Exclusions – We inserted a section at the beginning of the document to make it clear that this resolution will not impair the City’s ability to carry on standard real estate acquisitions related to (a) the development permitting process (e.g., parkland dedication, easements); (b) approved capital improvement plans (e.g., right-of-way acquisition); and (c) utility infrastructure. We also highlighted the original intent that these policies are set on a prospective basis, meaning they won’t impair or impact agreements and leases that have already been executed.
2) Restructured – The resolution was restructured to make it easier to follow. The three major categories are (a) Procedural Policies; (b) Partnerships; and (c) Priorities.
3) Process – The Resolution starts out with the goal of transparency in real estate transactions, recognizing that we’ll need to hear some details in executive session to protect the City’s and others’ interests. It then lays out a process for getting the City Council’s input earlier in the transaction and solicitation process. Generally, the City Manager will bring to the Council real estate opportunities when they arise, excluding offers that the City would not consider (such as offers to purchase strips of parkland) or offers that are not commercially viable.
4)
a. General Policies: the Resolution would embed several general policies, most of which are already general practice. For example, as a general policy, the City favors owning its land in fee simple and using ground leases for development, rather than selling off tracts. Except in limited circumstances where there is a business case, the City should strive to own its facilities rather than lease them. We should avoid long-term vacancies of our properties and consider temporary uses of vacant facilities, when feasible.
b. Leasing: the Resolution directs the City Manager to set up a fair, competitive leasing process when the City is leasing to nonprofit organizations, similar to what we do for our social service contracts.
c. Value: the Resolution includes a requirement that the City obtain updated appraisals for transactions, which is largely consistent with current City process, with a few rare exceptions (e.g., HealthSouth). Based on recommendations from City staff, it clarifies the process for transfers between City departments and assigns a formula for how those transfers should be valued. And, it requests that the City consider conducting its own zoning process for City-owned land before putting it up for market.
5) Partnership – The Resolution establishes a framework for how the City should partner with the Austin Economic Development Corporation and the Austin Housing Finance Corporation to proactively identify opportunities to maximize community benefits, including affordable housing. Based on comments from staff, we clarified that this is a procedural step, leaving room for the City Manager to recommend using alternative methods. Also based on a suggestion from City staff, we expanded the analysis of consideration of potential partnerships to include nonprofit entities that help fulfill community needs. Later in the resolution, we request that the City Manager provide an update on the progress of the collaboration with the AEDC at the December 8 Council meeting.
6) Priorities- -The Resolution sets a target baseline for the use of the City’s land, while allowing the City Manager to recommend divergence. For example, although the target goal embedded in the resolution is 85% income-restricted units for projects with housing, there may be a good case for lowering that threshold if the project can achieve more units under another model. Other Council priorities included are BETTER BUILDER STANDARDS, LIVING WAGES, CHILDCARE FACILITIES, and, after working with staff on alternate language, we were able to include MBE/WBE goals.
7) City Manager Briefing – Based on input from City staff, we removed the requirement that the City Manager would need to provide a briefing to the Council on each real estate solicitation and provided a path that could include a memorandum instead. Council would need to sponsor an IFC to provide input under such a scenario if they desired modifications to a draft RFP/RFQ.
8) Parking Management – Consistent with our prior direction, the resolution requests that the City Manager make recommendations on a centralized parking management strategy in line with our approved transportation plans, financial policies, and climate goals. Language was added to reflect sensitivity to bond requirements.
I hope this helps summarize the work we’ve been doing, and I look forward to our conversation on Thursday. Should there be significant revisions between now and then, we will do our best to get them distributed as quick as possible.
Best,
Kathie
Council Member Kathie Tovo
Austin City Council, District 9
Included below is a link to a revised draft of Resolution 40, establishing policies for the City’s management of its real estate assets. This draft maintains the significant actions articulated in Draft 1 that posted on 9/23 as well as reflecting many edits that respond to feedback we’ve received from city staff. I believe I’ve addressed most, if not all, of their questions and concerns, but I may have additional edits as they – and my co-sponsors -- review this clarified version.
Resolution: http://assets.austintexas.gov/austincou ... 41426.docx
Redline: http://assets.austintexas.gov/austincou ... 141029.pdf
Generally:
This Resolution aims to set out a consistent, clear process enabling Council to provide input earlier in the decision-making process for potential sales, purchases, redevelopment, and use of City properties. It sets up processes and general policies without being too prescriptive – and maintains the important role that City staff play in using their professional judgement and expertise to advise the Council in its decision-making. This revised process will:
• ensure we’re actively identifying opportunities to achieve important community benefits, such as co-locating childcare facilities and income-restricted housing alongside City facilities in areas of town with higher land values
• encourage collaborations among other public entities, including the Austin Economic Development Corporation
• improve efficiency and save staff time by including Council feedback at the beginning of a process and avoiding delays at the end of the transaction when delays can be more problematic
For your convenience, I am summarizing some of the more significant changes based on staff feedback and additional conversations:
1) Exclusions – We inserted a section at the beginning of the document to make it clear that this resolution will not impair the City’s ability to carry on standard real estate acquisitions related to (a) the development permitting process (e.g., parkland dedication, easements); (b) approved capital improvement plans (e.g., right-of-way acquisition); and (c) utility infrastructure. We also highlighted the original intent that these policies are set on a prospective basis, meaning they won’t impair or impact agreements and leases that have already been executed.
2) Restructured – The resolution was restructured to make it easier to follow. The three major categories are (a) Procedural Policies; (b) Partnerships; and (c) Priorities.
3) Process – The Resolution starts out with the goal of transparency in real estate transactions, recognizing that we’ll need to hear some details in executive session to protect the City’s and others’ interests. It then lays out a process for getting the City Council’s input earlier in the transaction and solicitation process. Generally, the City Manager will bring to the Council real estate opportunities when they arise, excluding offers that the City would not consider (such as offers to purchase strips of parkland) or offers that are not commercially viable.
4)
a. General Policies: the Resolution would embed several general policies, most of which are already general practice. For example, as a general policy, the City favors owning its land in fee simple and using ground leases for development, rather than selling off tracts. Except in limited circumstances where there is a business case, the City should strive to own its facilities rather than lease them. We should avoid long-term vacancies of our properties and consider temporary uses of vacant facilities, when feasible.
b. Leasing: the Resolution directs the City Manager to set up a fair, competitive leasing process when the City is leasing to nonprofit organizations, similar to what we do for our social service contracts.
c. Value: the Resolution includes a requirement that the City obtain updated appraisals for transactions, which is largely consistent with current City process, with a few rare exceptions (e.g., HealthSouth). Based on recommendations from City staff, it clarifies the process for transfers between City departments and assigns a formula for how those transfers should be valued. And, it requests that the City consider conducting its own zoning process for City-owned land before putting it up for market.
5) Partnership – The Resolution establishes a framework for how the City should partner with the Austin Economic Development Corporation and the Austin Housing Finance Corporation to proactively identify opportunities to maximize community benefits, including affordable housing. Based on comments from staff, we clarified that this is a procedural step, leaving room for the City Manager to recommend using alternative methods. Also based on a suggestion from City staff, we expanded the analysis of consideration of potential partnerships to include nonprofit entities that help fulfill community needs. Later in the resolution, we request that the City Manager provide an update on the progress of the collaboration with the AEDC at the December 8 Council meeting.
6) Priorities- -The Resolution sets a target baseline for the use of the City’s land, while allowing the City Manager to recommend divergence. For example, although the target goal embedded in the resolution is 85% income-restricted units for projects with housing, there may be a good case for lowering that threshold if the project can achieve more units under another model. Other Council priorities included are BETTER BUILDER STANDARDS, LIVING WAGES, CHILDCARE FACILITIES, and, after working with staff on alternate language, we were able to include MBE/WBE goals.
7) City Manager Briefing – Based on input from City staff, we removed the requirement that the City Manager would need to provide a briefing to the Council on each real estate solicitation and provided a path that could include a memorandum instead. Council would need to sponsor an IFC to provide input under such a scenario if they desired modifications to a draft RFP/RFQ.
8) Parking Management – Consistent with our prior direction, the resolution requests that the City Manager make recommendations on a centralized parking management strategy in line with our approved transportation plans, financial policies, and climate goals. Language was added to reflect sensitivity to bond requirements.
I hope this helps summarize the work we’ve been doing, and I look forward to our conversation on Thursday. Should there be significant revisions between now and then, we will do our best to get them distributed as quick as possible.
Best,
Kathie
Council Member Kathie Tovo
Austin City Council, District 9