Wednesday, December 14, 2022

Breakthrough in Student Housing!

Recap: In the November 14th episode of this long-running drama, the City Council withdrew their opposition to an application for a planned development just north of UT-Dallas consisting of three components: A) a student-oriented apartment part, B) a mixed apartment/retail part, and C) a limited-service hotel part. But before voting on it, they directed staff to draw up an ordinance requiring part B construction to begin before a certificate of occupancy could be issued for part A. The landowner and developers reluctantly agreed to this condition. The alternative was clear: denial. The case was continued until December 12, when, if all went as expected, there would be a legal ordinance everyone could agree to and it would be voted into law. That was the plan anyway. What actually happened December 12?

In short, in Monday night's episode, the plan was carried out. The City Council voted 7-0 to approve the mixed-use project north of UT-Dallas and adjacent to a DART Silver Line rail station. But the happy ending to the episode doesn't mean it was without drama and suspense.

To see why, we have to go back to that November 14 episode. After the landowner agreed to the conditions the City Council insisted on, the landowner took the plan back to his banker. They were less enthusiastic. In fact, they threatened to pull out. This shouldn't have been surprising. What banker wants to tie up millions of dollars in a project whose payback is tied to the performance of a third party involved in other phases of construction? The City's condition added a risk of the whole project falling apart.

So in Monday night's episode, the developer brought that risk to the attention of the City Council. While saying they would still agree to the guarantees the City Council demanded, they asked if the City Council would agree to more flexibility in the specs of the second apartment plans. This would maybe allow the landowner to get both apartment buildings built by the same builder at the same time, thus eliminating that huge risk for the banker.

From the reaction of some on the City Council, you'd have thought the landowner was asking to build a strip club. Instead of collaborating with the landowner on ideas of how the City could help minimize this new risk, a risk imposed by the City Council itself, Council Member Ken Hutchenrider took the news as a personal offense, accusing the landowner of "reneging" on a deal. He wasn't reneging. The landowner was still prepared to accept the terms imposed by the City Council earlier, if necessary. He was just being transparent about a new appreciation of a risk to this project, a risk that Hutchenrider either didn't grasp, or didn't care about. In any case, the bedside manner Hutchenrider displayed towards this landowner was, at best, unhelpful. The risk is not just to the landowner. Having a failed development on that property would negatively impact the City of Richardson for years. What Hutchenrider couldn't see is that it would be to the City's own benefit as well to work with the landowner to reduce risk.

It wasn't just Hutchenrider. The attitude of the City to this project has puzzled me ever since the beginning. It's been my impression that the City of Richardson (the Mayor, City Council, City Plan Commission, City Manager, and City development staff) all took an antagonistic stance against this development from the first day they heard of it. Why was that? Early on, I attributed it to the City siding with UT-Dallas. Any new apartment project near the university would compete with the university's own housing business. But as COVID-19 receded and in-person classes resumed, attendance continued to grow and UT-Dallas's opposition to new housing options for students softened.

That left a second source of opposition: influential Richardson Mayor Paul Voelker's wishful thinking that some major technology company attracted to a tier-one research university might eventually find this property to be just where they'd want to locate their own new research office building. The mayor's wishful thinking delayed this project by years, harming not just the landowner but costing the City of Richardson itself millions of dollars in lost tax revenue. (The landowner never asked for any tax breaks for this project.) But the landowner persisted, eventually wearing down even Mayor Paul "Chasing the World's Largest Mega-Deals" Voelker. The mayor never tires of telling audiences, "I'm a land rights person." Finally, after years of saying "no" to this landowner, he lived up to his self-defined image and finally said "yes." This landowner, as well as UT-Dallas students, UT-Dallas itself, and taxpayers of Richardson, now finally at long last stand to benefit...if the landowner can get past the new roadblock the City left him with as they quit blocking the way themselves. It should never have been this difficult. The zoning process in Richardson is still broken.

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