As a deadline looms, it’s looking highly unlikely that the city of Austin will buy a coveted, 75-acre tract in Central Austin.
The city can’t pull together the $28.5 million needed to purchase the state-owned land at Bull Creek Road and 45th Street, according to several City Council members who were briefed behind closed doors Tuesday on possible funding options.
The purchase would be “difficult to impossible,” Council Member Mike Martinez said Tuesday.
In a separate interview, Council Member Kathie Tovo said she’s “not certain we’ve explored every option,” and she’s hopeful the city could still by the land — though she wouldn’t say what other funding options might exist.
The Texas Department of Transportation, which owns the land along with the Texas State Cemetery Committee, wants a decision from the city by Friday.
The parcel has long been eyed by developers, and the state is ready to sell it. At least one development firm is interested: Stratus Properties wants to acquire the site for a mixed-use project that includes an H-E-B store. But the state is required to first offer the land at market value — $28.5 million — to public entities such as the city and Austin school district.
Central Austin neighborhood groups fear private developers will turn the tract into a high-density project that fells large trees, increases traffic and pollutes nearby Shoal Creek.
Owning the land would give the city more power to shape what gets built, council members have said. The council envisioned turning the land into a mix of parks, affordable housing and businesses that fit the scale of the neighborhood.
Council Member Laura Morrison, who has pushed hardest for the purchase, said Tuesday that she thinks the city could partner with a private entity to buy the land, but working out the details of that “would take time that we don’t appear to have” because of TxDOT’s Friday deadline.
The council agreed last month to begin negotiating with TxDOT to buy the land and to more carefully evaluate the tract in the meantime, by appraising it and reviewing its environmental features.
The city planned to use a form of debt called certificates of obligation, which wouldn’t require voter approval, for the purchase. But as the American-Statesman first reported last week, city staffers quickly realized that state law would prohibit Austin from using that kind of debt for economic development purposes.
The main option left is using money from 2012 and 2013 bond packages that Austin voters approved. But staffers identified only about $5 million from those bonds that could be spent on the Bull Creek Road property, Council Member Sheryl Cole said.
The City Council is scheduled to vote Thursday on whether to scrap or move forward with the land purchase. If it says “no,” TxDOT’s next step will be to seek bids from private groups interested in buying the land, TxDOT spokeswoman Veronica Beyer said.
Beyer said it isn’t clear yet how long the bidding process will take.
The city of Austin will still be able to influence what a private developer builds on the property through its zoning and land-use rules, Martinez said. The property has a few small buildings but is mostly vacant, and any private developer will need to seek the city’s permission to add features such as water and utility lines, he said.
“We retain a lot of leverage and authority over that tract,” he said.