17,000 square feet of empty retail space rests at the base of the Convention Center’s parking garage. This retail space has the potential to add vibrancy and day time services to the Entertainment District. This is the only retail space within a few hundred feet of the 555, the Sabine on 5th, the Hilton, the Hilton Garden Inn, and the Convention Center. So, why hasn’t this space been filled?
After the jump: Part 1 of the chronology of City of Austin v. Harry Whittington
1981: Harry Whittington (yes, that Harry Whittington) purchased a full city block – block number 38 in Downtown Austin. The lot is bounded by Red River, 5th St, Sabine, and 4th St.
The lot is described as having four lots on the north side of the lot, and four lots on the south side of the lot. A twenty-foot alley separates the two sides. For years the City of Austin would lease this lot
1998: City issues $110MM in bond funds for the purpose of expanding the Convention Center. The City is also seeking a private developer to construct a new hotel (that would be the City’s largest) and parking garage that would be shared by the center and the hotel.
1999: The cost of underground parking is estimated to be $30,000 per space and the hotel developer retreats from the 700 space commitment. The City has been leasing the parking lot next door, owned by Harry Whittington. Whittington’s block could not only serve the Convention Center, but the 6th Street Entertainment District. Harry is not interested in selling.
Whittington has said “Our family has been planning a mixed-use development that would add to the dynamics of downtown [Austin] and be more aesthetic than a public parking parking garage.”
2000: The City begins condemnation process after not being able to reach a deal with Whittington. Commissioners approve of the City’s condemnation of Whittington’s land and vote that the City should pay Whittington $3.6MM.
2001: Eminent domain cases are very delicate “by the book” cases. The process server neglected to serve Harry’s wife and daughter who are also owners of the land. Whittington sues the City and wins. The condemnation is thrown out and the City pays Whittington $150k in legal fees.
While continuing to pay Whittington $21,000 per month to leases the parking lot, the City votes to file suit to condemn the property – again. Councilmember Will Wynn is the only councilmember to vote against the condemnation believing a parking garage is not the highest and best use, and that more property and sales taxes could be collected if the land were put to different use. The value of Whittington’s land has already increased since they began construction of the hotel.
The City has now increased its budget to purchase the land from $3.5 to $5.1MM. Whittington is not interested. In December, of 2001 the City tries – again – to condemn the land. Whittington angles is the City condemning for a clear public purpose (Convention Center parking), or to enter the parking business?
2002: Commissioners once again approve of the condemnation and award Whittington $7.65MM. The City had only planned to spend $5.1MM. Austin Energy ponies up $2.5MM and will install a new chiller system atop the proposed parking garage the City just condemned.
Whittington sues the City, claiming intended use of the land is not strictly for “public purpose,” and therefore the condemnation should be thrown out. The City never expected a fight like this.
“They’re [the City] also saying the new garage will fill a dire need by relieving parking congestion in that fast-growing neighborhood, as well as house a much-needed energy-saving cooling plant that will be hooked up to the convention center and its headquarters hotel next door” – Jonathan Osborne, Statesman Staff Writer
It would later come out that the Austin Energy’s existing chilller at 3rd and Nueces is already connected the Convention Center and the new hotel being constructed.
This is the crux of Whittington’s case – the city may not condemn a piece of land for private benefit. “I think they just want to be in the parking business” said Whittington.
Meanwhile, stakeholders are vocalizing their concern that the City’s efforts are misguided and could do more harm than good. Just around the corner, the City has access to 400 parking spaces that are underutilized. The Convention Center claims they don’t need more than 400 spaces. So why is the City compelled to construct more, at the opportunity cost of a mixed-use development?
One reason, according to Convention Center Director, Bob Hodge, is that the City would then give up on the revenue from those spaces and that convention parking is sporadic. Also, the new hotel dropped its commitment of 700 spaces to 400 spaces. Those extra spaces were intended for convention use.
Whittington’s suit was dismissed by County Court-at-law Judge Orlinda Naranjo when she claimed the parking garage would indeed be serving a public purpose. Whittington is already preparing an appeal. This time based on evidence that the City did not properly condemn an alley running through the middle of the lot and that he still owns the alley.
Stay tuned for the rest of the story!
-Jude
So why is the retail space empty?
The City didn’t want to enter into any lease agreements in the middle of litigation with such an uncertain outcome and face further liability.
So now what? Does Whittington OWN the garage free and clear? Does he get to pocket all the revenue from parking fees? The city is still paying off the construction bonds… right? What about the chiller station? He owns that too, right? He could dismantle it or demolish everything. Possession IS 90% of the law, you know… Will he contract out to Austin Energy to run the system? Shut it down? How is he going to charge the facilities which receive chilled water from it? Contract that out to AE as well? Is there still market demand for the ground level retail space at that site?
I’ll post the remainder of the story in a day or so. The amount of detail is cumbersome. To the letter of the law, so far as I can tell, Whittington should win this. If the City genuinely wants to begin to revitalize the downtown east of Congress, a good place to start is to settle this case and get some retailers in there asap.
Whittington should win this one – and the city council (except Wynn) should be ashamed they haven’t stopped this one a long time ago. He’s clearly in the right.