UT offers to renew city of Austin’s Muny lease, but at a higher price


Highlights

UT System regents voted in 2011 against renewing the city’s lease for Lions Municipal when it expires in 2019.

UT’s Fenves says also wants to begin parallel discussions on “next steps for the use and development” of tract.

In an abrupt policy reversal, the University of Texas is offering to extend its lease of Lions Municipal Golf Course to the city of Austin beyond 2019 — provided that the city is willing to pony up lease payments that are closer to market value.

UT President Gregory L. Fenves made the offer in a letter to Mayor Steve Adler dated Tuesday, asking the mayor to let him know by March 1 whether the city is interested in negotiating.

“I would love to work with the University of Texas to find a way to preserve Muny,” Adler said Wednesday from Washington, where he was attending the U.S. Conference of Mayors’ winter meeting.

The UT System Board of Regents voted in 2011 against renewing the city’s lease for Lions Municipal, also known as Muny, when it expires in 2019. The board has long contemplated leasing the 141-acre course and other portions of the university-owned Brackenridge Tract in West Austin for a major commercial and residential development, with lease payments benefiting the Austin campus.

In a reference to those interests, Fenves said in the letter that he also wants to begin parallel discussions “on the next steps for the use and development” of the tract.

Based on the UT president’s letter, it seems clear that Fenves is confident that the UT board would be willing to approve a new or modified Muny lease. Fenves, accompanied by Patti Ohlendorf, the university’s vice president for legal affairs, and Richard Suttle, a local development lawyer, attended a closed-door session of the UT board last month at which the agenda called for “discussion regarding legal issues related to the utilization of the Brackenridge Tract, including Lions Municipal Golf Course.”

To be sure, much has changed since the 2011 vote. Perhaps most notably, the National Park Service decided last year to add Muny to the National Register of Historic Places because of its significance in the civil rights movement.

Muny is considered one of the earliest municipal golf courses in the former Confederate states to be desegregated, if not the first. UT, which prevailed last year in a U.S. Supreme Court case challenging its use of affirmative action in admissions, and its governing board couldn’t have relished the public-relations impact of bulldozing an important site in the civil rights movement.

The National Register listing was a major victory for Save Muny, a group of golfers, environmentalists and West Austinites who banded together in support of the property’s recreational, green space and historic qualities. The latest development is another positive step, said Bob Ozer, a leader of the group.

“However, what the value of the land is in light of the substantial civil rights history attached to the site by the National Register of Historic Places and whether a lease is the proper outcome in this matter are questions that we intend to raise with the mayor and members of the City Council as well as the university,” Ozer said. “Although we support a negotiated resolution to issues concerning Muny’s future, we note that the mayor has proposed in the past a much broader negotiation with the university on all issues involving the university and the city.”

Fenves’ letter, despite its diplomatic phrasing, can also be seen as something of a put-up-or-shut-up challenge to the city, whose leaders have said for years that the golf course should be preserved. In correspondence to the National Park Service in advance of the National Register listing, Fenves and UT System Chancellor Bill McRaven said flatly that Muny “will not be operated as a golf course” after the lease expires.

Fenves didn’t mention any figures for what current market-lease value for the 141 acres might be. But in 2011, the UT System’s executive director of real estate estimated that the parcel could fetch at least $5.5 million a year if leased for a mixed-use development. After accounting for inflation, that figure would have the current buying power of $5.9 million. Austin’s rapidly rising land values might well push the figure even higher.

The current annual rent paid by the city is roughly $500,000, a UT System official said. Whether the city would be willing to absorb a rental increase of 10-fold or more, and how that might affect greens fees, are open questions.

The lease was last negotiated in 1989 for a 30-year term with three optional five-year extensions.



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