Money for smart growth

In Austin, Texas, planners have created a score card system to determine if a development deserves financial support from the city. Providing financial incentives in the form of reduced development fees and infrastructure construction is one of the most powerful tools a city can use to encourage better development. However, how to establish a fair and objective way to evaluate projects and put a dollar value on the support remains a thorny problem. Over the last two years, the City of Austin has developed a “Smart Growth Criteria Matrix” that may serve as a model for other communities. The matrix evaluates development plans in terms of their location, their integration of uses, their ability to support transit, their pedestrian-orientation, and the quality of their urban design, among other things. More than a dozen projects have passed through this optional program so far. The Triangle, a mixed residential, retail, and office project, received one of the highest scores and a generous incentive package. How this project was evaluated is detailed below. Categories of evaluation A total of 635 points are available in the matrix, but as Senior Planner George Adams explains, no project will earn a maximum score because some of the 14 categories are mutually exclusive. The location of the development weighs heavily in the planners’ considerations. They award points to projects in three smart growth zones: downtown, the urban core, or one of the city’s Desired Development Zones (DDZ) inside the city limits. A project can gain 25 points for locating in the downtown zone, and will earn another 10 points if it is within one block of a bus stop. Planners anticipate the arrival of a light rail system — it is the subject of a referendum in November — and award an additional 25 points to projects within two blocks of a potential light rail station. Projects in the urban core or a DDZ accrue fewer points (up to 48), but all projects may boost their score by locating in an untested market or an “area of economic need.” In the land use category, projects with a mix of residential, retail, and office uses earn the highest number of points, but smaller projects with buildings that include apartments on upper floors and street-level pedestrian uses can also improve their score. Whether a project includes a retail, entertainment, and cultural center with regional drawing power will influence the score, as will the number of new housing units provided. The urban design criteria focus on human-scale detailing, the amount of window space at street level, and the compatibility of building height and massing with adjacent facades. A development without drive-through facilities will earn a few extra points, as will one with parking at the rear of buildings. The more than 100 criteria also address building setbacks, pedestrian comfort in the streetscape, bicycle access and amenities, structured parking, and affordable housing. Austin has a traditional neighborhood development (TND) ordinance which dovetails with the smart growth matrix. “If you meet the requirements of a TND, you’re going to meet the requirements for a lot of the other categories, so the points will accumulate,” says Austan Librach, director of the Planning, Environmental and Conservation Services Department. Levels of financial support Plans scoring below 200 points are ineligible for financial incentives, and projects with higher scores are divided into three threshold levels. Librach explains that the city will waive 50 percent of development fees for projects on the first threshold level (201-275 points). At the second and third level, the incentive package may include a waiver of up to 100 percent of development fees, coverage of utility charges, and investments in infrastructure construction. However, the amount of support is capped at the present value of the incremental increase in property taxes the project would generate over the next five or 10 years. In addition, Austin offers “zone-specific incentives” to projects that locate in a DDZ. “You don’t even have to go through the matrix,” Librach says, “but we offer only a 20 to 50 percent waiver of development fees in those cases.” Employers that produce 50 percent of their product or services outside the Austin metropolitan area are eligible for a special set of incentives to locate in the city capped at the present value of the property tax increase over 20 years. The program has brought Intel and other large employers to downtown Austin, Librach says. Applying the matrix to the Triangle The 22-acre Triangle project is planned for a state-owned property at the intersection of two major arterials, Lamar Boulevard and Guadalupe Street, in Austin’s urban core zone. In the early 1990s, the state legislature decided to maximize returns from idle state property and sought a developer for the site. According to Adams, Cencor Realty, primarily a commercial developer, proposed a typical strip retail center with an abundance of surface parking. “The surrounding neighborhoods promptly went ballistic and fought the plan for two years,” Adams says. When a state board turned down the design, the city brought in Peter Calthorpe to conduct a charrette, which produced the current mixed-use proposal. Calthorpe’s plan has subsequently been refined by the planning firm RTKL. In a drastic reversal, leading opponents of the original project “stood up before the council and praised it profusely when the council was deliberating on the incentive package,” Adams says. Cencor has settled with Post Properties to develop the residential portion of The Triangle. The project will include 794 rental apartments, 150,000 square feet of retail and 60,000 square feet of offices. This full mixture of uses earned The Triangle a significant number of points on the matrix. The vertical integration of residential, retail, and office uses is exactly what the planning department wants to encourage, Adams says. In terms of urban design, the project scored points by extending the city’s east-west street grid through the site, which has always been an island of undeveloped land. “The plan also does a good job of bringing the buildings close to the streets on the perimeter,” Adams says. A small area of surface parking is exposed to the street on the west side of the project near a large grocery store, but otherwise parking is absorbed in four garages encapsulated by multistory buildings. Adams notes that The Triangle successfully links the various uses internally with pedestrian paths and walkways. The street design includes wide sidewalks, plenty of street trees, and street level retail — adding up to additional points on the matrix. Furthermore, planners rewarded The Triangle for providing a relatively large area of open space — 6.5 acres, or more than a fourth of site. As part of the incentive package, the city will purchase most of the open space and maintain it as public parks. Lastly, the project’s location in the urban core and at the confluence of two major bus routes gave it an edge in terms of transit support. The intersection of Lamar and Guadalupe is also a potential site for a future light rail station. With a total of 402 points, The Triangle secured an incentive package worth $8 million. After a long and tortuous development process, the developers are now close to submitting plans for final city approval. Adams acknowledges that the matrix may not yet have great influence on the location of projects. The Triangle would probably have been built on the same site even without the score card and the incentives. “But the matrix has made a difference in the design of projects,” he says. “Especially in this market, people are willing to go a little further to make design changes in exchange for incentives. In most cases it’s creating a higher value project for the developers and they are able to do it without additional money out of their pocket.” For more information, look at the website:www. ci.austin.tx.us/smartgrowth.