Downtown Commission considers housing, more details on HealthSouth redevelopment


Members of the Town Center Commission expressed concern last week that the ongoing negotiations to redevelop the former HealthSouth property in the town center could result in a project that does not meet the expectations of the city ​​council or the community as a whole.

The commission received an update at its last meeting on the recently opened exclusive negotiations between the city and potential developer Aspen Heights Partners, in hopes that an office tower and a residential tower with significant affordable housing would be the final result.

Last month, the city struck the bargaining deal, which could last up to 15 months, which the council approved in January after many additions. Among their concerns were requirements for the number of affordable housing and other community benefits that would be included in the redevelopment of the old medical facility and parking garage located on East 12th and Red River streets.

During the presentation Redevelopment Program Director Margaret Shaw, President August Harris said exclusive negotiation agreements such as the one with Aspen Heights may result in renegotiation of all terms of the project.

“If, during the discussions, they came back with something that was lower than what was offered by the other companies submitting under the RFP, would that make a difference? I see this frequently when you make a contract… they try to renegotiate the deal and it ultimately becomes less than the other offers that have been offered. It would just be a concern that I have.

Citing state law governing municipal purchasing decisions, Shaw repeatedly refused throughout the meeting to give parameters on what features might be included in the final deal.

She noted that the Board put specific conditions in the resolution that was approved in January, including features that were not included in the original RFP.

“During those December and January conversations, the Council changed the dynamics a lot in terms of what they wanted, so all of those parts of the offer are going to change when we get back,” Shaw said.

“If by collecting feedback from the community on what this final package looks like, if it was something that the community and the board weren’t happy with, then yes, they would have the option, I think, of restarting them. negotiations. “

Board member Kathie Tovo brought up the management of the redevelopment of HealthSouth during the discussion earlier this month about restarting the rebuilding process of the Austin Convention Center. Specifically, Tovo wants staff members to come back to the board with updates so that she and others can give their opinion on what should be included in any request for qualification or proposal. She said staff members launched the Request for Proposals for HealthSouth without requesting quotes or asking Council what housing features and other community benefits were expected for the site.

“There were proposals that did not necessarily reflect some of these values ​​as strongly as they should, in my opinion, for public ownership. I want us to have that checkpoint because I don’t want a RFP going out without Council having a chance to review it, ”she said.

“What happened with HealthSouth was that the staff told us that we can’t demand this from the developers because we didn’t put it in the RFP. But they didn’t put it in the RFP because they wrote it themselves and released it without that checkpoint with the Council, so I’m going to work hard on any other project like this that we have this important control.

Tovo said the property’s high-profile nature and attractive downtown location have made it a sometimes controversial issue among council members, some of whom want it to be developed privately at market rates while it is being developed. and others want it accessible to the service sector and creative workers.

“One of the challenges we have encountered with HealthSouth is that it is an extremely attractive property and therefore there have been different voices in our community conversation, maybe even before we bought it. . … There are many private interests who would like to redevelop it and then others in the community who would like to see it used for the highest profitability of the private market, and that cannot be our driving force.

Rendering of the project proposed by Aspen Heights Partners courtesy of the City of Austin.

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