$130M 'Urban Village' Project Wins Tax Rebate

AUSTIN, TX-The City of Austin has approved an incentive package for a $130-million ‘urban village’ development on 42 acres in North Austin. The residential, hotel and retail development by Austin-based Endeavor Capital is tentatively scheduled to get under way late next year and be complete by 2006, Endeavor Principal Kirk Rudy tells GlobeSt.com.

To assist the project, which Rudy says wouldn’t be possible without public assistance, the City of Austin has put together a package of tax rebate incentives. If the development meets certain benchmarks with regard to employment and affordable housing, the city will rebate the owner a percentage of the property and sales taxes the development generates over the next 20 years. Specifically, the owner of the property will receive 25% of property taxes paid for 20 years and, for the sales tax, an 80% rebate for the first five years and a 50% rebate for the following 15 years. In exchange, in addition to developing the project and maintaining the employment and housing benchmarks, Endeavor will create a $1 million endowment fund to help small businesses move to the project, says Rudy.

“My sense is that the elected officials in our community recognize the importance of becoming engaged in the economic development but because of a bad budget position can’t allocate cash,” says Rudy. “One way around that is to adopt policy that incorporates performance-based incentives.”