2014 CEDA APPLICATION FORM

Transcription

1 2014 CEDA APPLICATION FORM All Applications Must Be Received By August 15, 2014 The 2014 TEDC Community Economic Development Awards (CEDA) will be presented during TEDC's Annual Conference Award s Luncheon on October 2, 2014, in Houston, TX. The recipients will be judged in each of the 5 categories that have made the most significant contribution to economic development in their community and the State of Texas. AWARD CATEGORIES The CEDA will be given to one community from each of the following five population categories: (as currently marketed). I. Population less than 5,000 II. Population of 5,001 to 15,000 III. Population of 15,001 to 40,000 IV. Population of 40,001 to 100,000 V(a). Population of 100,001 to 250,000* V(b). Population of 250,001 and above* *Note: At least three (3) applications must be received in both V categories in order for them to be judged separately. If less than three (3) applications are received in either V category, then all applications will be judged as one V category. NOMINATION: Name of Community: TEDC Member Name: Austin Rodney Gonzales Address: P.O. Box 1088 City: Austin State: Texas Zip: Phone #: Fax #: Rodney.gonzales@austintexas.gov Website: powers- seaholm- district Community Population (as of 2010 Census): 790,390 Application Submitted By: Greg Kiloh Title Project Manager Phone: greg.kiloh@austintexas.gov SUBMITTED FOR: (CIRCLE ALL THAT APPLY) Business Retention Business Attraction Business Expansion Community Involvement

2 SUMMARY REVIEW The Seaholm Power Plant Redevelopment Project is an excellent example of leveraging assets to attain Community goals of historic preservation and economic development through Business Attraction of targeted industries. The much beloved art deco styled power plant has graced the shores of Lady Bird Lake for over 50 years. By the 1980 s the plant was largely idled by newer, more efficient power plants in the Austin Energy system. Members of the community rallied to convince Austin Energy and the Austin City Council to preserve the building rather than demolish it. In 1998, a special committee of the Arts Commission issued a report recommending the plant be preserved and redeveloped for an unspecified public attraction. The report also recommended undertaking a master plan for the largely industrial, mostly City-owned district surrounding the plant. In 2000, the City commissioned a master plan for the district and examined the economic feasibility of developing a public attraction in the power plant. In 2004, the City released a Request for Qualifications and Redevelopment Concept seeking development partners, including a request to accommodate a short-list of local cultural non-profits. Community Involvement was integral to the entire planning process. In 2005, the Economic Development Department (EDD) recommended to City Council the selection of Seaholm Power Development, LLC, a local consortium of developers lead by Southwest Strategies Group to enter into negotiations to redevelop the site. Through the negotiation process, it was determined that there was a lack of cultural non-profits with sufficient financial capacity to take on the power plant part of the project. It was also determined that the City would need to invest $27 million in infrastructure and incentives to make the project financially feasible. EDD established a Tax Increment Finance (TIF) district around the project to support the City investment. The TIF plan obligations meant that the maximum square footage of development would be needed to generate property and sales tax, which also precluded the inclusion of a non-profit public attraction. However, the project does include a one-acre plaza between buildings and an upgraded Event Lawn south of the power plant building, overlooking Lady Bird Lake. A 3,000 square foot multi-use entry on the west end of the power plant building will allow the public to access the historic power plant building and view the dramatic four story turbine hall. The public-private partnership is structured to allow the City to re-acquire rights to the power plant once the City s investment has been repaid through the economic performance of the project, allowing the potential for future generations of Austinites to experience a public attraction in the historic power plant. The primary goal of the project was preservation of the historic power plant through economic development, rather than achieving maximum development of the site, which would require demolition of the power plant building. The project consists of the renovated power plant building, a two-story office / retail building under a Capital View Corridor, and a 30 story condominium building with ground floor retail. A 538 space underground parking garage extends under the new buildings. The roof of the garage forms the public plaza between the three buildings. The condominium tower is the first to be developed in Downtown Austin since the Great Recession and unit reservations sold out in less than one week. The low rise building will be anchored by a Trader Joe s grocery store, with Under Armour / Map My Fitness leasing the second floor offices. In addition to the public access area in the power plant, a three story restaurant and bar is being developed in the shell of the former Boiler #9. The remainder of the 128,000 square foot power plant building will be office space. In January 2014, EDD proposed, and City Council approved, a Chapter 380 Business Attraction agreement with athenahealth to establish a new regional headquarters that will be located in the Seaholm Power Plant.

3 athenahealth Chpater 380 Business Attraction Agreement: An investment of $7.75 million in business personal property. Creating 607 new full-time jobs in Austin over the next 10 years with an average annual wage of $132,085. Offering employees a comprehensive benefits package including: Health, dental, and vision insurance Life insurance Same sex partner benefits On-the-job training Employee stock purchase plans Tuition reimbursement; and Paid maternity leave. Hiring 90% of their new, full-time employees locally. Corporate Citizenship Initiatives: Providing athenahealth, Inc. software to underserved communities, such as medical clinics in developing countries, volunteer-run clinics in Texas, and mission-driven nursing schools in New England A quarterly employee-driven charitable giving program. A strong history of employee advancement: 15-25% of employees are promoted each year. The Incentive: The fiscal impact analysis represents only direct benefits and costs as a result of the investment and jobs created. Total direct benefits over a 10-year period = $5.93 million. Total costs over a 10-year period = $4.26 million.* The recommended economic development grant is equal to $250 per job per year over 10 years. Total net benefit ($5.93M - $4.26M) = $1.67 million. The Company: athenahealth, Inc. was founded in 1997 as a birthing center and its founders became frustrated with paperwork and billing systems. When they couldn t find an existing solution, they developed their own. athenahealth, Inc. is a publicly-traded leading provider of cloud-based health information technology services, including: o Electronic Health Records o Care Coordination o Patient Communication o Medical Billing and Practice Management o athenaclaritysm, a Healthcare Data Analytics Tool for Health Networks o Cloud-based intelligence tools, such as Bugs + Drugs, a free app that provides timely, locationspecific bacterial resistance data The average family practice increases their bottom line $39,800 by using athenahealth, Inc. s patient communications software services. athenahealth, Inc. currently has 36 employees in Austin and is considering Austin for a 607-employee expansion of its R&D functions. The company is headquartered in the Boston metropolitan area and has operations in 5 other states (including Texas) and in India. athenahealth, Inc. has 2,853 full-time employees. It has experienced 30% annual revenue growth since its founding.

4 Innovativeness The Seaholm Redevelopment Project is full of innovations from cutting edge greenbuilding techniques and a massive rain water harvesting system utilizing existing power plant infrastructure to a first of its kind pedestrian street design; but the real innovation is the public-private structure and use of economic development to achieve historic preservation goals so that the community can continue to enjoy the landmark building for generations to come. Transferability Not many communities have surplus art deco power plants on their waterfronts, but most communities, large or small, have some cherished historic building that reminds them of their past and contributes to their community s unique character. Often, the local train station or cotton mill is preserved through a grant from another level of government, and the structure becomes some kind of museum. While the building may be stabilized or restored for a period of time, the community often relies on volunteers and other scarce local resources to maintain it long term. By combining local historic preservation and economic development goals, the building could be reused to attract new businesses that generate revenue that can be reinvested into the historic preservation effort. Ultimately, if the project is a success, it could generate additional economic development around it, and may allow the historic structure to play a more public role in a revitalized community. Community Commitment and Leverage The Seaholm Power Plant is the center piece of an entire redevelopment district that is quickly becoming the highest density, mixed-use residential district in Downtown Austin. The Seaholm District Master Plan established a vision for the 85 acre industrial area that was quickly embraced by the private sector even before actual public investment occurred. By 2005, 1350 residential units were under development on privately-owned parcels within the master plan boundaries. At completion, the properties in the district with development agreements will deliver an estimated 2,360 residential units, 187,000 square feet of retail, 630,000 square feet of office and 180,000 square feet of hotel. The City is also investing $120 million in a new central library in the district. The TIF district surrounding the Seaholm Power Plant will pay for the needed infrastructure around the plant, including a pedestrian and bicycle underpass of the Union Pacific Railroad mainline that passes next to the power plant. The proceeds from land sales of other parcels in the district are being reinvested into other needed infrastructure: reestablishing the street grid; building a new bridge over Shoal Creek; restoring the creek banks and upgrading the trails. Forty percent of future property tax of former City owned parcels within the district, but outside of the TIF district, will be dedicated to the Austin Housing Trust Fund to finance affordable housing throughout the city. The City of Austin Economic Development Department and our allies promote Austin as an economically competitive location for attracting the expansion or relocation of targeted businesses and growing companies that provide strategic and sustainable growth of industry in our city and region. Through our work with Opportunity Austin, we strategically develop relationships and approach companies in targeted industry sectors that could locate an investment in Austin, create quality jobs and cause a larger ripple effect by interacting with our local companies. There are many considerations when competing for these projects; such as a locations proximity to amenities, business and political climate, finance, infrastructure and bandwidth, as well as education and workforce.

5 Our department works closely with our allies for economic development to maximize the investment that we make in these projects often securing additional dollars from state and federal funds. We use WebLOCI to measure and forecast the fiscal impact of the project in our city and determine an appropriate incentive amount that will still yield a net benefit for the City of Austin. Also, we utilize the council approved matrix to evaluate each project based on core community values that we feel will determine whether the company and the project are a strong and sustainable partner for the City of Austin. In the event that we find a need for an advantage when competing for a high-scoring project that is forecasted to produce a net benefit, we have the option to develop a financial incentive from the net benefit that is calculated on the project. We currently have two options for financially incentivizing these types of projects developing an incentive to reimburse a portion of property taxes paid by the company on a significant capital investment or developing a per job payment structure for projects that are not capital intensive. The City of Austin does not have to insert or issue claw backs since all of our Chapter 380 agreements are performance-based - meaning that we monitor compliance on an annual basis to determine if a payment will be made to the company as a reward for investment, for creating jobs and for meeting any of the bonus criteria that further strengthens Austin. Measured Objectives The project achieves the goal of preserving the power plant for at least another 50 years, while utilizing 30 years of economic activity to repay the investment. Athenahealth will contribute 600 very well paying jobs that are supportive of Austin s emerging bio-science and health care delivery economy. Under Armour, Trader Joe s and other businesses will contribute additional jobs and bring vitality to the district. Additional retail, office and hotel development in the district will contribute even more. Not including the new central library, the City is investing $103 million in public infrastructure that is leveraging over $1 billion in private investment, an ROI of more than 10:1. Construction on the Seaholm Redevelopment Project began in June Athenahealth signed the lease on the power plant immediately following the approval of the Chapter 380 agreement in February The building is currently being turned over to athenahealth for tenant improvements with a goal of occupancy in November The first phase of the project, with the exception of the condominium tower, will be complete at that time. The condominium tower will be complete in October Our incentive program does have high measures for compliance, as we seek to maximize the opportunity for a local impact. This is done by creating relationships with our small and minority businesses and also creating relationships with our community groups that can connect the company with current and next-generation of Austinites for employment opportunities. We understand our responsibility to the citizens of Austin and we actively update and provide information on our incentive to the public, as we seek to promote integrity in our program. The City of Austin Economic Development Department received a perfect score for Transparency of Economic Agreements by Good Jobs First and we have since updated our online reporting platform to incorporate more information on our agreements in a more organized and user-friendly format.