The most contentious topic at Wednesday’s Austin Port Authority meeting wasn’t an action item, it was a philosophy.

Thursday, March 23, 2000

The most contentious topic at Wednesday’s Austin Port Authority meeting wasn’t an action item, it was a philosophy. Business subsidies, corporate welfare, tax increment financing – do we or don’t we?

We do if we want any new or expanded business in town, City Administrator Pat McGarvey said in response to Port Authority and Austin City Council member Dick Lang’s criticism of the recent deal with Cooperative Response Center. CRC’s new headquarters will be situated on 2.2 acres of land just off 18th Avenue NW; up front the land and the necessary infrastructure improvements to make the piece a viable location will cost the business $1. The city’s investment in land and infrastructure will be paid off through tax increments over a 25-year period.

McGarvey was backed up by Development Corp. of Austin CEO George Brophy, whose business it is to entice businesses to Austin.

"If these people had taken our offer and shopped it around, they would have found that our offer — land and infrastructure to be paid back over a 25-year period ($15,000 a year), plus a loan for 25 percent of the costs of building on the lot – to be a very modest proposal," Brophy said. "There are other places, other states like Wisconsin, that have a history of offering much, much more."

While Lang was alone in his adamant position against that particular tax increment financing district because he considers it prime real estate, he was not alone in a feeling that the whole idea wasn’t quite right.

"Unfortunately this is the playing field," Port Authority member and Farmers and Merchants State Bank President Lynn Koch said. "Let’s just make sure we’re subsidizing businesses that have a good chance of success. I hope we’re doing our homework."

"I agree that’s the environment, but it’s the small guy that keeps this town going," Michaell Bednar, also a Port Authority member and businesswoman, said. "He pays market rate for everything."

The discussion, prompted by a review of the sale process to CRC, ended with an agreement to disagree. McGarvey also informed members that the sale of the second lot that will make up the TIF district was scheduled for March 31. At that time, the property now owned by Austin businessman Burt Plehal will become the Austin Port Authority’s for the price of $94,500. With the acquisition of the second lot, TIF No. 11 will be a little more than 10 acres in size.

In other news, Darwin Viker of LAWCO gave the audit report on the Port Authority for 1999. The Port Authority got a "clean opinion", which means the financial statement was fairly stated, city Director of Financial Services Tom Dankert said.

"The Port Authority operations are right on track with our projections," Dankert said. "We’ve turned a corner on most of our projects. What I can’t wait to see is the report for this year – with the sale of the Spec Building things should get better and better."

McGarvey reported that nearly all the possible spaces in the Town Center building were occupied. The most recent new tenants are Dave Jordahl and Ted Hinrichs of New York Life. The associates deal with life insurance and financial planning. Two tenants in the building are behind rent, McGarvey said, but he expected that to be rectified soon.