Austin apartment complexes throwing doors open to short-term rentals

Austin apartment complexes throwing doors open to short-term rentals

The Japanese restaurant Fukumoto is located on the ground floor of Corazon, an apartment building in downtown Austin that’s now leasing nearly a quarter of its units as short-term rentals. RICARDO B. BRAZZIELL / AMERICAN-STATESMAN

At Corazon, a trendy 2014 complex on the east side of Interstate 35, a studio apartment runs $1,600 a month — or $170 a night. You can live at The Arnold, built in 2016, for $2,000 a month or stay one night for $229.

Are these apartment complexes? Or hotels?

Many of the newer, nicer apartment complexes cropping up across Austin’s landscape share a new trait. They’re licensing chunks of units as short-term rentals to be furnished and leased by the night, just like hotel rooms.

Corazon, for example, on East Fifth Street, has 62 of its 256 units — 24 percent — licensed as STRs. The Arnold, on East Sixth Street, has 20 short-term units. Lamar Union, near the Alamo Drafthouse Cinema on South Lamar, has 20 such units, and two downtown Amli complexes, on either side of the W Hotel, have a combined 57.

“That’s wild,” said longtime real estate developer Ed Wendler when told about the numbers. “That could start impacting the rental market if it’s that large a number.”

Until the rise of such websites as Airbnb and Austin-based Homeaway, such rentals were generally limited to corporate apartments, perhaps near an industrial or medical district, that occasionally housed a company’s employees. Now, tourists and everyday business travelers are getting in on the idea of nixing hotel rooms for a more residential stay. Austin ordinances allow apartment buildings to license up to a quarter of their units as STRs.

When Taylor Fletcher, a 28-year-old Park City, Utah, resident, came to Austin to attend a wedding with his girlfriend and her family, they didn’t stay at a downtown hotel or at the wedding venue hotel on South Congress. Instead, they stayed next door to a hotel at The Catherine, a luxury high-rise apartment complex, where they had multiple bedrooms surrounding a full kitchen.

Fletcher, an Olympic skier who competed at the Pyeongchang Games this past February, spends much of his life traveling for competitions, particularly in northern Europe. He and his U.S. teammates usually stay in apartments instead of hotels.

“If I could do it everywhere, I would,” Fletcher said. “You have a kitchen. You’re not crammed into a hotel room. The people living there might know that we’re renters, but we don’t know that they’re not.”

Catering to tourists

Two years ago, Brian Carrico and Chris Herndon tapped into the desire of travelers to expand their lodging options when they founded The Guild, a “collection of boutique hotels located in upscale residential buildings,” according to its website.

The company has 170 units spread across eight Austin buildings, including those at Corazon, Amli and The Arnold. It now has 35 units in Dallas, as well. The company caters to “people who want to be more a part of the city, rather than a traditional hotel,” Carrico said in an interview.

“We try to find interesting places to locate,” he said. “Our neighborhood guides prioritize getting guests out of the rooms and into local businesses.”

The company relies on the apartment buildings to decide how many units to set aside as hotel rooms, based on how many units they might typically have vacant at a given time. The Guild leases the unit from the complex at a set per-month price (Carrico called those “comparable” to normal leasing prices) and then furnishes, licenses and rents the units.

“This is becoming more and more common as a form of mixed-use,” Carrico said. “There’s a pretty clear demand for this kind of combination. A lot of travelers want a living room and kitchen and want to be located in a community.”

Even apartment complexes where short-term renting has traditionally been disallowed by lease provisions are starting to loosen their rental provisions.

The Grove, a South Austin apartment complex where the monthly rent for a one- or two-bedroom unit ranges from $1,300 to $1,600, recently became the first Austin complex to partner directly with Airbnb via a program called Pillow. An email to residents last month stated that the program would allow them to rent their apartments as STRs, so long as the complex gets a 25 percent cut.

In exchange, Airbnb agreed to purge all non-approved listings at The Grove from its website.

Pillow, which partners with apartment owners to encourage residents to host rental guests at their complexes, lists 63 apartment complexes nationwide that have joined the partnership. The Grove’s email and the Pillow sign-up page say nothing about the city’s licensing of short-term rentals, nor do they appear to limit the number of days a lessee can rent out his apartment.

Representatives of the apartment complex’s parent company, BH Management, did not return calls for comment.

Assessing ‘a game-changer’

As the practice of merging apartments and vacation-style rentals spreads, what does it mean for cities and their residents?

That’s a question real estate watchers are still trying to answer. Anne Talbert, an apartment trends researcher with Austin Investor Interests, said the trend is recent and the group hasn’t uncovered much information about its impact yet, but the development is on its radar.

“Your line of questioning is exactly what I want to ask: What is the impact of this and how is it impacting rent?” Talbert said. “It’s definitely a game-changer. It’s a trend we want to get our eye on.”

Austin’s apartment occupancy rates, now at 92 percent, are expected to rise to 95 percent by 2022, city staffers informed the City Council on Wednesday. The metro area is expected to need 114,000 new apartments by 2030 to meet demand.

In regard to impacts on rents and apartment availability, Carrico noted that The Guild locates only in buildings that already are expensive.

“We’re exclusively in what would be considered luxury apartments so it’s a segment that tends to have higher vacancies,” he said.

Charles Heimsath, president of the real estate research firm Capitol Market Research, said that apartments didn’t rent to tourists five, 10, 20 years ago because websites like Airbnb and Homeaway hadn’t boomed yet. Now, he knows various apartment developers who are planning to include short-term units.

“It just makes sense,” Heimsath said. “Apartment developers are concerned about the bottom line. As taxes continue to increase and operating expenses continue to go up, they try to offset those increasing expenses with additional line items of rental income.”

Tom Noonan, president of Visit Austin, the convention and visitors bureau, sent an email to city officials earlier this year warning that the hotel market in Austin is flattening as growth slows and occupancy levels drop. He said in an interview last month that short-term rentals have helped absorb a spike in travelers to the city, especially during major festivals, but STRs also play a role in slowing hotel occupancy growth.

“We’ve added so many rooms to the marketplace that it’s had an impact,” he said. “Austin is the largest short-term rental market in the state of Texas … Obviously hotels are impacted by the number of short-term rentals in the city because they’re all competing for room nights.”

ABOUT THIS SERIES

This story is the last of three looking at the booming short-term rental market in Austin and the challenges associated with it.

The opening story described how as lawsuits target local rules regarding short-term rentals, property owners complain about a balky licensing process and occasionally resort to subterfuge as they attempt to avoid citations.

As lawsuits target local rules regarding short-term rentals, property owners complain about a balky licensing process and occasionally resort to subterfuge as they attempt to avoid citations.

On Tuesday, American-Statesman reporter Elizabeth Findell will look at how many of the upscale apartment complexes popping up in Austin share an interesting trait. They are licensing chunks of units as short-term rentals to be furnished and leased by the night, just like hotel rooms.

Online: Dive into an interactive, citywide map that spotlights trouble spots within Austin’s short-term rental landscape. You’ll find it with this story at mystatesman.com.

Source Article

Austin apartment complexes throwing doors open to short-term rentals

The Japanese restaurant Fukumoto is located on the ground floor of Corazon, an apartment building in downtown Austin that’s now leasing nearly a quarter of its units as short-term rentals. RICARDO B. BRAZZIELL / AMERICAN-STATESMAN

At Corazon, a trendy 2014 complex on the east side of Interstate 35, a studio apartment runs $1,600 a month — or $170 a night. You can live at The Arnold, built in 2016, for $2,000 a month or stay one night for $229.

Are these apartment complexes? Or hotels?

Many of the newer, nicer apartment complexes cropping up across Austin’s landscape share a new trait. They’re licensing chunks of units as short-term rentals to be furnished and leased by the night, just like hotel rooms.

Corazon, for example, on East Fifth Street, has 62 of its 256 units — 24 percent — licensed as STRs. The Arnold, on East Sixth Street, has 20 short-term units. Lamar Union, near the Alamo Drafthouse Cinema on South Lamar, has 20 such units, and two downtown Amli complexes, on either side of the W Hotel, have a combined 57.

“That’s wild,” said longtime real estate developer Ed Wendler when told about the numbers. “That could start impacting the rental market if it’s that large a number.”

Until the rise of such websites as Airbnb and Austin-based Homeaway, such rentals were generally limited to corporate apartments, perhaps near an industrial or medical district, that occasionally housed a company’s employees. Now, tourists and everyday business travelers are getting in on the idea of nixing hotel rooms for a more residential stay. Austin ordinances allow apartment buildings to license up to a quarter of their units as STRs.

When Taylor Fletcher, a 28-year-old Park City, Utah, resident, came to Austin to attend a wedding with his girlfriend and her family, they didn’t stay at a downtown hotel or at the wedding venue hotel on South Congress. Instead, they stayed next door to a hotel at The Catherine, a luxury high-rise apartment complex, where they had multiple bedrooms surrounding a full kitchen.

Fletcher, an Olympic skier who competed at the Pyeongchang Games this past February, spends much of his life traveling for competitions, particularly in northern Europe. He and his U.S. teammates usually stay in apartments instead of hotels.

“If I could do it everywhere, I would,” Fletcher said. “You have a kitchen. You’re not crammed into a hotel room. The people living there might know that we’re renters, but we don’t know that they’re not.”

Catering to tourists

Two years ago, Brian Carrico and Chris Herndon tapped into the desire of travelers to expand their lodging options when they founded The Guild, a “collection of boutique hotels located in upscale residential buildings,” according to its website.

The company has 170 units spread across eight Austin buildings, including those at Corazon, Amli and The Arnold. It now has 35 units in Dallas, as well. The company caters to “people who want to be more a part of the city, rather than a traditional hotel,” Carrico said in an interview.

“We try to find interesting places to locate,” he said. “Our neighborhood guides prioritize getting guests out of the rooms and into local businesses.”

The company relies on the apartment buildings to decide how many units to set aside as hotel rooms, based on how many units they might typically have vacant at a given time. The Guild leases the unit from the complex at a set per-month price (Carrico called those “comparable” to normal leasing prices) and then furnishes, licenses and rents the units.

“This is becoming more and more common as a form of mixed-use,” Carrico said. “There’s a pretty clear demand for this kind of combination. A lot of travelers want a living room and kitchen and want to be located in a community.”

Even apartment complexes where short-term renting has traditionally been disallowed by lease provisions are starting to loosen their rental provisions.

The Grove, a South Austin apartment complex where the monthly rent for a one- or two-bedroom unit ranges from $1,300 to $1,600, recently became the first Austin complex to partner directly with Airbnb via a program called Pillow. An email to residents last month stated that the program would allow them to rent their apartments as STRs, so long as the complex gets a 25 percent cut.

In exchange, Airbnb agreed to purge all non-approved listings at The Grove from its website.

Pillow, which partners with apartment owners to encourage residents to host rental guests at their complexes, lists 63 apartment complexes nationwide that have joined the partnership. The Grove’s email and the Pillow sign-up page say nothing about the city’s licensing of short-term rentals, nor do they appear to limit the number of days a lessee can rent out his apartment.

Representatives of the apartment complex’s parent company, BH Management, did not return calls for comment.

Assessing ‘a game-changer’

As the practice of merging apartments and vacation-style rentals spreads, what does it mean for cities and their residents?

That’s a question real estate watchers are still trying to answer. Anne Talbert, an apartment trends researcher with Austin Investor Interests, said the trend is recent and the group hasn’t uncovered much information about its impact yet, but the development is on its radar.

“Your line of questioning is exactly what I want to ask: What is the impact of this and how is it impacting rent?” Talbert said. “It’s definitely a game-changer. It’s a trend we want to get our eye on.”

Austin’s apartment occupancy rates, now at 92 percent, are expected to rise to 95 percent by 2022, city staffers informed the City Council on Wednesday. The metro area is expected to need 114,000 new apartments by 2030 to meet demand.

In regard to impacts on rents and apartment availability, Carrico noted that The Guild locates only in buildings that already are expensive.

“We’re exclusively in what would be considered luxury apartments so it’s a segment that tends to have higher vacancies,” he said.

Charles Heimsath, president of the real estate research firm Capitol Market Research, said that apartments didn’t rent to tourists five, 10, 20 years ago because websites like Airbnb and Homeaway hadn’t boomed yet. Now, he knows various apartment developers who are planning to include short-term units.

“It just makes sense,” Heimsath said. “Apartment developers are concerned about the bottom line. As taxes continue to increase and operating expenses continue to go up, they try to offset those increasing expenses with additional line items of rental income.”

Tom Noonan, president of Visit Austin, the convention and visitors bureau, sent an email to city officials earlier this year warning that the hotel market in Austin is flattening as growth slows and occupancy levels drop. He said in an interview last month that short-term rentals have helped absorb a spike in travelers to the city, especially during major festivals, but STRs also play a role in slowing hotel occupancy growth.

“We’ve added so many rooms to the marketplace that it’s had an impact,” he said. “Austin is the largest short-term rental market in the state of Texas … Obviously hotels are impacted by the number of short-term rentals in the city because they’re all competing for room nights.”

ABOUT THIS SERIES

This story is the last of three looking at the booming short-term rental market in Austin and the challenges associated with it.

The opening story described how as lawsuits target local rules regarding short-term rentals, property owners complain about a balky licensing process and occasionally resort to subterfuge as they attempt to avoid citations.

As lawsuits target local rules regarding short-term rentals, property owners complain about a balky licensing process and occasionally resort to subterfuge as they attempt to avoid citations.

On Tuesday, American-Statesman reporter Elizabeth Findell will look at how many of the upscale apartment complexes popping up in Austin share an interesting trait. They are licensing chunks of units as short-term rentals to be furnished and leased by the night, just like hotel rooms.

Online: Dive into an interactive, citywide map that spotlights trouble spots within Austin’s short-term rental landscape. You’ll find it with this story at mystatesman.com.

Source Article

Top Austin real estate firm impacts local charities through generous giving

Austin donations go toward Foundation Communities. Photo courtesy of Kuper Sotheby’s International Realty
Donations from Kuper Impact in San Antonio benefit the Animal Defense League. Photo courtesy of Kuper Sotheby’s International Realty
Foundation Communities provides affordable homes and free on-site support services for thousands of families. Photo courtesy of Kuper Sotheby’s International Realty
The Animal Defense League is a nonprofit no-kill shelter for abandoned, abused, or neglected dogs and cats.

One of Central Texas’ leading real estate firms is committed to serving its community in a way that truly benefits those who live there. Kuper Sotheby’s International Realty has a program called Kuper Impact, which supports local organizations through charitable donations raised by the company and its agents.

In Austin, Kuper Impact benefits Foundation Communities while San Antonio and the Hill Country offices support the Animal Defense League. Since its founding in 2016, the program has donated more than $75,000 to these local charities.

It works like this: For every completed transaction, Kuper Sotheby’s International Realty sets aside $5 and agents are given the chance to match or increase their donation. At the end of the year, the funds are donated directly to the organizations that serve their communities.

Foundation Communities is a homegrown nonprofit that provides affordable, attractive homes and free on-site support services for thousands of families with kids, as well as veterans, seniors, and individuals with disabilities.

"We are incredibly grateful for the creative way that Kuper Sotheby’s International Realty has invested in affordable housing for our families, and that they’re able to contribute a small amount with every transaction that adds up to a big impact," says Walter Moreau, executive director for Foundation Communities.

Chartered in 1934, the Animal Defense League is a nonprofit no-kill shelter for abandoned, abused, or neglected dogs and cats.

"We’re very thankful to Kuper Sotheby’s for choosing the Animal Defense League of Texas as this year’s Kuper Impact community initiative recipient," says Janice Darling, executive director of the Animal Defense League of Texas. "Their donations will support our animal care initiatives, vaccinations, micro-chipping, and spay and neuter program. By supporting ADL, they are helping to save the lives of the neglected and unwanted dogs and cats in San Antonio."

It’s the goal of Kuper Sotheby’s International Realty to add more charity partners in the coming years, but for now these two nonprofits are experiencing what happens when a community comes together for the good of all.

Source Article

Top Austin real estate firm impacts local charities through generous giving

Austin donations go toward Foundation Communities. Photo courtesy of Kuper Sotheby’s International Realty
Donations from Kuper Impact in San Antonio benefit the Animal Defense League. Photo courtesy of Kuper Sotheby’s International Realty
Foundation Communities provides affordable homes and free on-site support services for thousands of families. Photo courtesy of Kuper Sotheby’s International Realty
The Animal Defense League is a nonprofit no-kill shelter for abandoned, abused, or neglected dogs and cats.

One of Central Texas’ leading real estate firms is committed to serving its community in a way that truly benefits those who live there. Kuper Sotheby’s International Realty has a program called Kuper Impact, which supports local organizations through charitable donations raised by the company and its agents.

In Austin, Kuper Impact benefits Foundation Communities while San Antonio and the Hill Country offices support the Animal Defense League. Since its founding in 2016, the program has donated more than $75,000 to these local charities.

It works like this: For every completed transaction, Kuper Sotheby’s International Realty sets aside $5 and agents are given the chance to match or increase their donation. At the end of the year, the funds are donated directly to the organizations that serve their communities.

Foundation Communities is a homegrown nonprofit that provides affordable, attractive homes and free on-site support services for thousands of families with kids, as well as veterans, seniors, and individuals with disabilities.

"We are incredibly grateful for the creative way that Kuper Sotheby’s International Realty has invested in affordable housing for our families, and that they’re able to contribute a small amount with every transaction that adds up to a big impact," says Walter Moreau, executive director for Foundation Communities.

Chartered in 1934, the Animal Defense League is a nonprofit no-kill shelter for abandoned, abused, or neglected dogs and cats.

"We’re very thankful to Kuper Sotheby’s for choosing the Animal Defense League of Texas as this year’s Kuper Impact community initiative recipient," says Janice Darling, executive director of the Animal Defense League of Texas. "Their donations will support our animal care initiatives, vaccinations, micro-chipping, and spay and neuter program. By supporting ADL, they are helping to save the lives of the neglected and unwanted dogs and cats in San Antonio."

It’s the goal of Kuper Sotheby’s International Realty to add more charity partners in the coming years, but for now these two nonprofits are experiencing what happens when a community comes together for the good of all.

Source Article

Housing sales, prices hit record highs in July

One of the hottest markets for home sales last month was Georgetown, where 132 single-family residences changed hands last month — a nearly 26 percent jump from a year prior. But much of Central Texas had a sizzling July as residential real estate activity reached historic levels.

That’s according to the latest Austin Board of Realtors numbers, released Thursday. The data show the median price for single-family homes hit $320,000 across the five-county area in July, the highest monthly level ever recorded.

The Austin metro also hit a seven-year high for home sales with 3,103, the most since July 2011 and a 8.8 percent year-over-year increase.

So demand is clearly high. On the supply side, permitting for new single-family homes and apartments is back to pre-recession levels and Metrostudy data show construction started on 4,064 homes in the first quarter, up more than 17 percent year over year. However, housing inventory — the measure of how long it would take to sell all of the homes on the market if new listing stopped — continues to fall in many places. In Austin it dropped to 2.1 months in July; most real estate experts consider at least six months needed for a balanced market.

“Home sales are up across the board in the Austin area, but declines in housing inventory are almost just as steep," Steve Crorey, 2018 president of the Austin Board of Realtors, said in a statement. He said the ABOR figures highlight "the critical need for more housing stock at all price points in and around Austin."

Supporters of CodeNext had hoped Austin’s overhaul of the land-use code would increase density and allow for more home construction, but the process was killed earlier this month. That puts all eyes on City Manager Spencer Cronk, who has been tasked with leading the next overhaul of the code.

More quick takeaways:

• Within Austin city limits, the median price jumped 6 percent year over year to $390,000. There were 952 sales of single-family homes, up 13.5 percent year over year.

• In Williamson County north of Austin, median price increased 2.1 percent to $280,734. There were 1,054 sales of single-family homes, up 5.7 percent year over year.

• In Hays County south of Austin, the median price fell 3 percent to $265,000. There were 347 sales of single-family homes, up 2.7 percent year over year.

• For the entire metro, there were 3,065 pending sales in July, an increase of 10.8 percent from the same month last year. But the number of homes on the market fell 2.7 percent to 7,522.

• For the entire metro, 27 percent of single-family homes sold for less than $250,000, 54 percent sold between $250,000 and $500,000 and 19 percent sold for $500,000 or more.

Source Article

What’s on the horizon for Charlotte’s apartment market as it tops list for fast growth?

Charlotte’s apartment market continues to post nation-leading growth.

Within the past eight years, metro Charlotte’s apartment inventory has increased at a rate faster than any other market in the nation, according to a new report from RealPage Inc. (NASDAQ: RP), a Texas-based company that provides software and data analytics to the real estate industry.

Although Charlotte’s total number of units in the current cycle, 41,857, isn’t the overall highest, its 30.6% bump in inventory eclipses that experienced by other quickly growing metropolitan areas. That includes Austin, Texas (29.2%), Nashville, Tennessee (28.3%), Salt Lake City (26%) and San Antonio, Texas (25.3%). It also registers higher than Raleigh’s 25.1% increase in inventory, which came in at 31,890.

In its report, RealPage notes that while substantial new apartment developments have delivered in many of Charlotte’s submarkets since 2010, the uptown/South End submarket has been on the receiving end of the most additional multifamily units, with a surge of 10,150 apartments in the past eight years and inventory growth of about 140%. That ranks among the highest expansion rates among national submarkets, according to RealPage.

Charlotte’s apartment boom continues to be met by "robust" demand, says Jay Parsons, who, based in Charlotte, is RealPage’s vice president. Parsons said that apartment occupancy is holding at 95.2% — nearly matching the 95.8% seen in the cycle’s peak a couple of years ago.

Annual rent growth in the Charlotte market registers at 2.8%, down from about 5% two to three years ago, he said in an email to CBJ.

"Still, Charlotte rents are climbing a little faster than the U.S. norm of 2.5%, and property owners and operators in Charlotte still have more pricing power than is typical in other metros where new supply is coming on stream most rapidly," he said.

And don’t expect the Queen City to fall from its perch as a national leader in apartment supply anytime soon.

The new report comes on the heels of another RealPage study that shows Charlotte logging a whopping 64.7% increase in multifamily permits for the year ending in May. Those 10,194 permitted units more than doubled in count from the previous year and ranked eighth, following metros like New York City, Dallas, Seattle, Los Angles and Austin.

Parsons said ongoing apartment construction tops 10,606 units, which is expected to grow the market’s inventory another 5.9% within the next year and a half.

"New product will continue to be delivered in Charlotte at a very rapid pace," Parsons said.

He said that "mild backtracking in Charlotte’s occupancy rate is anticipated over the next year or two, and the rent growth pace likely will slow to 1.5% to 2% as the metro’s delivery volume escalates even more."

Source Article

Property Details for 900 Banister Ln Apt H

900 Banister Ln Apt H, Austin, TX 78704
900 Banister Ln Apt H, Austin, TX 78704
Property Features
Master: Double Vanity
Half Bathrooms: 1
Granite/Marble Counters

Source Article

JoCo Partners and The ValCap Group Partner on the Acquisition of Two Apartment Communities in Austin, TX

The renovation plans include high-end interior improvements to all the apartment units, including granite countertops, stainless steel appliances, and mosaic backsplash tiling. One of the existing offices will be converted into a clubhouse available for use to the community residents and a mega fitness center to include outdoor spinning, a yoga center and a fully equipped weight and cardio room. There will be extensive exterior renovations to the three pool areas, the addition of an outdoor grilling station and the inclusion of game areas for kids and families. For pet lovers, the construction team will create a dog park as well as a dog washing station that will be open to all residents.

About JoCo Partners: A real estate investment company with over 15 years of experience and a focus in medium to large commercial acquisitions. JoCo Partners collaborates with real estate investors as the asset management division of entities that evaluate, acquire, reposition, manage, and create an exit strategy for each property based on its highest value and best use. JoCo Partners currently has over 2,000 rentals and over $200M under asset management.

About The ValCap Group: Founded in 2012 as a collaboration between Richard Fishman, a former mortgage banker from San Diego, CA, and Jack Franco from Newport Beach, CA. Since its founding, ValCap has completed 12 projects consisting of over 3,200 units which were successfully repositioned and sold. These assets represent in excess of $166 million in total sales over the 6-year time frame. The average IRR for these projects was approximately 22% return for the partnerships involved.

View source version on businesswire.com:https://www.businesswire.com/news/home/20180709005129/en/

CONTACT: JoCo Partners

Elan Gordon

KEYWORD: UNITED STATES NORTH AMERICA TEXAS

INDUSTRY KEYWORD: REIT CONSTRUCTION & PROPERTY RESIDENTIAL BUILDING & REAL ESTATE

SOURCE: JoCo Partners

Copyright Business Wire 2018.

PUB: 07/09/2018 09:00 AM/DISC: 07/09/2018 09:02 AM

Source Article

New Crew stadium site plans in Austin includes more parking, affordable housing – Columbus – Columbus Business First

Precourt Sports Ventures is listening to its critics in Austin.

The company’s business arm in the Texas capital today released a new proposal for a stadium site at McKalla Place, the city-owned, 24-acre parcel that is being eyed as a home for the Columbus Crew SC.

After several Austin City Council members said they wanted to open up the site to other ideas as well, including mixed-use and affordable housing options, MLS2ATX released the new plans that include additional parking and 130 affordable housing units.

The company’s principal, Anthony Precourt, has been looking to move his team there since last fall.

The new rendering is similar to the one released in May. That site plan included a stadium surrounded by about 1,000 parking spaces, walkways and trails, a retention pond, a bicycle valet with room for about 500 bikes, park space, a music or performance space and an optional rail station. It also shows roadway access from nearby roads.

The new proposal includes a 600-car parking garage and the housing units which would go up in partnership with a local affordable housing group Foundation Communities. There are no changes on the size of the parcel or stadium itself.

“Precourt Sports Ventures’ vision is to create a true partnership with the City of Austin at McKalla Place, revitalizing an unused site to generate the greatest community benefit," Richard Suttle, attorney for PSV, said in a statement.

The idea of an MLS stadium in Austin has been getting mixed reviews from City Council.

Precourt Sports Ventures said it would privately finance the $200 million stadium. Under PSV’s proposal, Austin would own the stadium, the infrastructure and land it sits on. The team and PSV would collect the revenue.

"There’s no guarantee that (Precourt would) stay as long as he says he would," Councilwoman Leslie Pool told me a few weeks ago. "Watching what has happened in Columbus raises questions for me, because if he leaves early, then the debt would be the responsibility of Austin taxpayers."

Pool said she has had concerns since the beginning when Precourt was looking at public parkland for a stadium site. Vocal public opposition sent Precourt looking elsewhere for a potential stadium home.

"That was an early indication to me that he was tone deaf to what this community wants, and things haven’t really gotten much better,” she said.

Pool and councilwoman Alison Atler are co-sponsoring a resolution for council’s Thursday meeting that would ask the city manager to look over other potential plans for the McKalla Place development, in addition to the Crew proposal.

Those include a mixed-use development, affordable housing, parks and open space, affordable creative space and public transit, including a train station.

Councilwoman and Mayor Pro Tem Kathie Tovo and Mayor Steve Adler are sponsoring a different resolution that would have the city manager analyze the proposal from Precourt and “begin negotiations for a Major League Soccer stadium to be located at 10414 McKalla Place."

"McKalla seems like a real viable location and I’m excited to see if it can be done without City financing the stadium or being liable for any debt, and with community benefits like affordable housing support and youth soccer programs," Adler said in an email last week.

Precourt is hoping a decision will be made at this week’s meeting on the fate of McKalla Place. The sooner a decision comes, the sooner Precourt can move forward.

In Columbus, Precourt has been sued by the city and the state of Ohio in hopes he will keep the team here or sell it to investors.

Source Article

Crew SC | Austin developer inquired about McKalla Place two years ago

As Austin, Texas City Council starts is discussions focused on whether a soccer-specific stadium from Crew operator Precourt Sports Ventures is the right fit for McKalla Place, a city-owned tract in north Austin, other developers interested in the site wonder about their next moves.

Capella Capital Partners, a commercial real estate development firm in Austin, presented its plan for a mixed-use development at the 24-acre site at the Gracywoods Neighborhood Association meeting in north Austin last Tuesday.

Its history with the site goes back much further than that.

Scott Moxham, Capella’s CFO, said Capella first had an interest in the site shortly after September 2015, when it gained control of a 2.93-acre site adjacent to McKalla Place. That site is set to become a $250 million office and apartment complex.

In early 2016, Moxham said, Capella reached out to the city about what could happen with McKalla Place.

“We started kicking the tires and we said, ’Hey, what’s this 24-acre tract of land that’s our next-door neighbor? And of course we found out the City of Austin owns it and we said, ‘Oh, gosh,’” he said. “We looked into the history of it and the issues the property had in the past and the environmental remediation and long story short it had just been sitting there vacant for quite some time, almost two decades.”

After some discussion with the city, including then-city manager Marc Ott and the city’s office of real estate services, Capella indicated it would be interested in pursuing a long-term ground lease.

“They came back after they did a legal review and said, ‘You know what, a 99-year (lease) is equivalent to a sale of the property. That’s going to require an RFP (request for proposal),’” Moxham said. “We said, ‘OK, fine. We have no problem with that.’”

Austin did an appraisal of the site in August 2016 valuing McKalla Place at $29.5 million. Capella put together a team and began working on a land plan for the site with the idea that, based on what the firm had been told by the city as early as March 2017, an RFP was on its way.

It then became a game of hurry up and wait. An RFP that Capella thought would come out by summer 2017 and then by year’s end still has not come out.

“That’s kind of where we are today,” Moxham said. “But we’ve got a land plan on the McKalla site and it’s something that we’ve been looking at for well over two years now.”

PSV, which announced last October the possibility of relocating the Crew after the 2018 MLS season, switched gears from two parkland sites in Austin to focus on McKalla Place in March. PSV officials have said they would like some sort of stadium deal or letter of intent in place by the end of the month.

Moxham said Capella was never given a specific reason as to why the RFP was delayed, but there are a few good guesses. Ott, who said in an email he doesn’t have any knowledge of the site, left Austin for the International City/County Management Association in 2016 and Capella’s primary contact at the office of real estate services, Lauraine Rizer, retired.

“I don’t really know why other than it’s easy to just draw the conclusion that any time you’re dealing with a political body, these things can get pretty dragged out and (they are) unable to make any decisions,” Moxham said.

Capella has plans for a development that would include 1,500 housing units — a “significant portion” of which would be affordable housing — 120,000 square feet of retail that would include a grocery store, and six acres of parkland. Moxham said a relocation of the Kramer station MetroRail stop would be privately funded.

Another group, developers Marcus Whitfield and John Chen, made an unsolicited offer of $22.5 million to buy McKalla Place or $2.2 million per year with 1.5 percent annual increases over an 80-year lease term to city manager Spencer Cronk last week.

Capella will not follow suit without an RFP, Moxham said.

“I think it has to go through an RFP process to get there,” he said. “Unless there’s something that we don’t understand and the city can circumvent certain legal aspects of this, there’s no reason at this time to come up with some type of offer. That would come out in the RFP.”

Councilmember Leslie Pool has said multiple times she intends to bring a resolution calling for an RFP for McKalla Place at Austin City Council’s June 28 meeting.

“We haven’t yet decided whether a stadium is appropriate for this site because we don’t have sufficient information,” Pool said Tuesday. ”(An RFP) can compare what PSV has offered and any other parties who have indicated an interest.”

Moxham said Capella is not out to stir the pot or create enemies. As a soccer fan, he said he would go to MLS games in Austin. As a developer, Capella would like to see the tract adjacent to its own become a mixed-use development “whether we develop it or not.”

“We feel like that would be better for us and for the community. Ultimately that’s a big discussion and council has to make that decision,” Moxham said. “So, I don’t know that we’ll do anything other than we’re happy to talk about it and we’ll sit back and see what happens like everybody else.”

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