Austin Lawsuit Could Cramp Endeavor’s Plans for Statesman Site

A lawsuit against the Austin City Council could impact Endeavor Real Estate Group’s plan to redevelop the former Austin American-Statesman.

Save Our Springs Alliance, Taxpayers Against Giveaways, former Texas state Sen. Gonzalo Barrientos and former Austin City Council Member Ora Houston claim that council members acted unlawfully by creating the South Central Waterfront Tax Increment Reinvestment Zone, the Austin Business Journal reported.

The TIRZ, approved in December, spans 118 acres and 54 parcels. It captures tax from increases in property values to fund infrastructure improvements, and it would make at least $154 million in subsidies available. One of the parcels is the former Statesman site at 305 South Congress Avenue, where Endeavor is planning to build a massive mixed-use development with six high-rises.

The lawsuit, which claims that as much as $354 million in property tax would go to the district over 20 years, has the potential to alter a number of planned developments within the TIRZ, said Armbrust & Brown attorney Richard Suttle, who represents Endeavor.

“We have not done a legal analysis of the lawsuit,” Suttle told the outlet. “We trust that the city has done the analysis and is comfortable in their position. In the event the plaintiffs prevail, it will cause a cascading effect on things like affordable housing and parks.”

The city hopes to make 20 percent of new housing affordable in the South Central Waterfront area, and tax increment financing is a way to achieve this goal. The plaintiffs, however, claim the TIRZ violates a state law which restricts the creation of such a zone to “unproductive, underdeveloped, or blighted” areas, the outlet said.

“The old Statesman property is prime land in the heart of our city,” former council member Ora Houston said in a Twitter post. “The $354M is just more profit for Endeavor, taken from taxpayers’ wallets.”

A city spokesperson pushed back against that claim, attesting that the TIRZ complies with state law requirements and that it was created with careful consideration and community feedback.

—Quinn Donoghue