A developer’s proposal to build two high-end golf courses at Walter E. Long Metropolitan Park in East Austin would net the city $14.6 million in revenue and taxes over 10 years, city officials said Monday.
Of that, $4.8 million would be direct golf course revenue shared with the city, with the rest coming from sales tax and a hotel occupancy tax, the city said.
The Austin City Council’s Economic Opportunity Committee delved into the financial details and other particulars of the proposed golf deal but stopped short of taking a vote on what to recommend to the full body. The committee plans to take a vote at its next meeting, scheduled for May 11.
Council Member Leslie Pool struck the most critical tone. Among other things, Pool questioned why the city’s share of the golf development revenue is 3 percent at the beginning of the deal, growing to 11 percent at the end of the first 15 years.
The proposed license agreement between the city and Decker Lake Golf LLC is for 50 years, with four 10-year renewal options.
Kevin Gomillion, the city’s division manager for the golf enterprise fund, said the course’s developers would make an upfront investment of $25 million to $28 million. The city wanted to make sure the percentage was lower on the front end to make it less likely that the golf course would go under, Gomillion said.
“So you decided to ensure sufficient subsidies through a financing scheme to ensure that this succeeded as opposed to standing on its own legs, it sounds like to me?” Pool asked.
“I would disagree with that,” Gomillion responded. He later pointed out that the city typically aims for license agreements that provide for sharing 11 to 12 percent of revenue and that the agreement with Decker Lake Golf would ultimately reach that level.
Council Member Ellen Troxclair, who chairs the committee, asked whether the city could get a flat rate from the developer instead or share revenue based on the value of the city-owned parkland on which the golf courses would be built. The city hasn’t appraised the land.
Council Member Ora Houston, who has stated her support for the proposal in her District 1, read from comments she said were submitted by former Council Member Charles Urdy.
The parkland being proposed for the golf development used to be part of a subdivision that was marketed primarily to African-Americans, Houston said. The city then condemned the land, saying it would create a park that would be an asset for East Austin, including a golf course, she said, but that hasn’t happened.
“We’ve lived with this land since 1968, after it was taken from us,” Houston said.
Council Member Greg Casar said he was grappling with the “opportunity cost” of building a golf course.
“Is this the kind of economic stimulus that we want? What level of job access, job quality are we getting?” asked Casar, who also asked about inserting into the agreement a requirement that the developer hire a certain number of local residents.
City officials said the golf course would eventually provide 50 permanent jobs, and a hotel the developer is proposing to build next door would create 500 jobs. The developer would provide interview opportunities for residents of City Council District 1, which includes Northeast and East Austin, but Gomillion said a local hiring requirement could discriminate against others.
Troxclair said she saw several options in front of the committee: recommend there be a public vote on the proposed agreement with Decker Lake Golf, recommend the agreement as is, recommend the agreement with changes or not recommend the agreement at all.
Some members of the public have questioned whether the proposed license agreement with Decker Lake Golf is a way to get around a lease agreement that would require a vote per the city charter. City officials maintain that a license agreement gives the city more leverage, such as the ability to end the agreement any time it wants.
All the committee members agreed that more needs to be done to encourage economic development in what they said is a long-neglected part of the city.
The committee did not take public comment on the golf proposal at its meeting.