The definition of lobbying is undergoing a significant rewrite in the City of Austin and it
could have a huge impact on the commercial real estate industry throughout the state of Texas.

BY BRANDI SMITH

The change got its start back in January 2014 when Austin’s new city council members took their seats. For the first time in the Texas capital’s history, the council was comprised of ten members voted on by district instead of at large, as well as the mayor.

“Basically what happened is they took City Hall and dumped it upside down,” says Austin architect Stuart Sampley, who is also president of the city’s AIA chapter. “It’s a brave new world and people are still trying to figure out what the hell is going on.”

One of the big issues facing the council is lobbying reforms for the city. In August, District 7 council member Leslie Pool sponsored a resolution written by attorney Fred Lewis that overhauls Austin’s Lobbying Registration Ordinance.

“The changes that are being proposed to the existing lobby ordinance are substantial and have created significant concern among professional groups, not only in Austin but in other cities as well, as Austin is often the leader starting trends that other cities follow,” said attorney Pamela Madere, director of Coats Rose’s Land Use & Real Estate section.

“It is a very hot topic in this town through other interest groups that want more transparency and want more accountability,” echoed Sampley.

However, Sampley and others were concerned by the wide net the ordinance cast, which would have labeled many in the development community “lobbyists.”

“Under the current proposal, if you have more than 26 hours of discussions [per quarter] with a city employee about a particular project then you may be considered a lobbyist,” Madere explained. Along with that label comes a slew of other requirements, including registration and financial reporting.

Sampley says it’s not at all uncommon for architects and other developers to spend more than 26 hours interacting with city staff on a variety of tasks.

“Clearly by what we’re reading here is that the work that we do on a day-to-day basis  – study stuff, permitting, etc. – would be considered lobbying and we didn’t really necessarily feel like that we were lobbyists,” said Sampley.

In addition to all the registration and reporting requirements associated with the ‘lobbyist’ label, it would also prevent many of the most knowledgeable experts from weighing in on municipal projects.

“Architects and engineers would not be permitted to sit on boards and commissions that are considering site plans, preliminary plans and important development documents,” said Madere.

“You may think that my proposal will change the way our development community interfaces with the Council, and there is nothing in my proposal that does that,” Pool told the Austin Monitor in November. “We are simply requiring them to register.”

In response to the resolution, an 11-member coalition formed to represent Austin’s development community with Sampley as the leader.

“We’re not against transparency, we’re not against an open government law, we’re not against any of that stuff,” Sampley insisted. “But we are against our day-to-day activities to show compliance in the drawings being considered lobbying.”

Pool’s resolution was reviewed by the City Council Audit and Finance Committee, which passed it on to the Ethics Review Commission. In November, commissioners unanimously voted to recommend the resolution to city council.

After a couple months of back-and-forth conversations, Sampley’s group sent a letter to the council, addressing its concerns, saying in part:

“Hundreds of design professionals, craftsmen, and administrators must interact and communicate with City staff in order to do their job, as it is nearly impossible to take a public (City, County, State, or Federal) or private project through the City of Austin permitting system without speaking to City staff at length. Having those professionals register as lobbyists would not provide any community benefits or more transparency. In fact, such information about who is working with city staff on a project is readily available to the public on the city’s AMANDA database website.”

The letter led to increased communication between the council and development professionals, which culminated in what Sampley considers forward progress: the addition of his group’s proposed language that creates an exclusion for many development professionals. A victory to be sure, but Sampley says there’s a long road ahead as the resolution works its way to becoming an ordinance.

Cautioned Sampley: “This is the very beginning of the process.”

 

 

 

 

 

 

BY BRANDI SMITH

No matter the sector, no matter the area, no matter the price tag, North Texas’ commercial real estate market is booming in a way we haven’t seen in a generation. The combination of nearly exponential population growth and near-record job numbers is pushing development all around Dallas-Fort Worth area.

The region’s so hot, it grabbed the attention of PricewaterhouseCoopers and ULI, which put Dallas-Fort Worth at the top of the “Top 20 Markets to Watch” in their 2016 Emerging Trends in Real Estate report.

“This year I think there were over 2,000 interviews from executives in the real estate industry as to their investor preferences around geography, product type and the various characteristics that cause them to rank certain markets,” said PwC partner Byron Carlock. “As you saw, Dallas was ranked number one this year for several of its attractive attributes.”

Carlock pointed to the area’s development activity, expected yields to investors, general economic strength evidenced by occupancies and job growth, as well as some of the softer elements associated with cultural, educational and continued infrastructure improvement, such as expansion of the light rail system.

The report itself said “the market continues to benefit from strong investor interest, plenty of available capital, and a strong local development community.” However, this boom isn’t isolated to Dallas city limits.

“I think you have to look at North Texas regionalism, knowing that Dallas is the cultural, educational and kind of foundational nexus, but there is so much happening throughout north Texas on a regional basis,” Carlock said.

There are myriad examples: A 50,000 square foot Roger Williams AutoMall is under construction in Weatherford, which bills itself as “The Western Gateway Business Centre of the

DFW Metroplex.” Ross Perot Jr.’s company Hillwood Communities is working on a $500 million, 400-acre master-planned community in Celina. A four-story apartment building, named The Mark at Midtown Park, is going up in North Dallas, courtesy of Commodore Development LLC. Metlife and Panattoni partnered on an investment in Lancaster: a 250-acre industrial park.  Mohr Capital Partners has started construction on a 430,000 SF industrial project in Grand Prairie, Texas

However, the boom is illustrated no more clearly than in Frisco, a northern suburb of Dallas. Fifteen years ago, the city was a bedroom community of roughly 33,000. It’s since grown by more than 300 percent, now topping 150,000.

Not only is the community home to thousands of families, it is also home to the a kind of development boom you’d be hard pressed to find anywhere else in the United States.

“City leaders 20 years ago had a vision of what they wanted to become and they started making investments to get here,” said Dave Quinn, vice president of Frisco Economic Development Corp. “They understood that if we can attract the talent, meaning the families and the people to live here, someday, corporations are going to look and wake up and say, ‘Oh my gosh. Why am I having people drive an hour here? Why not locate in the heart of all this where the people are living?’ That’s what we’re seeing today, is that visions come to its own.”

For proof, Quinn offered up Frisco’s $5 Billion Mile.

“[It] is actually four different mixed-use projects,” he explained. “As far as we know, there’s not another area in the country where you have that type of diverse investment happening in such a small area.”

The four projects, which are located along the Dallas North Tollway between Warren Parkway and Lebanon Road, are as different in their scope as they are in their price tags. The flagship is The Star at Frisco, a 91-acre mixed-use development spearheaded by the Dallas Cowboys.

“It’s their corporate world headquarters,” said Quinn. “With their practice and training facility, cheerleaders, their whole organization will be based here in Frisco.”

The $1 billion complex will also feature two hotels, a 12,000-seat event center, as well as a unique opportunity for Frisco students. While the Cowboys manage 71 of the acres on this $1 billion project, the rest is a public-private partnership between the team, the City of Frisco and the Frisco Independent School District. Quinn said, to his knowledge, this is the first such partnership between an NFL team and a school district.

“This provides us with a needed third stadium at a quality and caliber that we could not have built or maintained on our own with the same amount of investment,” said Dr. Jeremy Lyon, Frisco ISD’s superintendent. “In addition to a place to play, perform and meet, the partnership provides many outstanding educational opportunities for our students.”

The second project is the $1.7 billion Frisco Station, developed by Rudman Partnership, Hillwood Properties and VanTrust Real Estate. It will cover 242 acres and provide 6 million square feet of office space, 990,000 square feet of medical office, 200,000 square feet of retail and 75,000 square feet of restaurants.

Project No. 3 comes in the form of The Gate, a 41-acre development that will include two 10-story luxury condo buildings, a boutique hotel, restaurant space and four office buildings. It’s being developed by Invest Group Overseas, a Dubai-based group making its first investment in the United States.

“They were actually the first to announce here in Frisco,”  Quinn said. “Funny story is that, they were first before the Cowboys and their land has obviously skyrocketed once the other projects started being announced. Now, they are the baby of the bunch at $700 million.”

Finally, the biggest development: the $2 billion Wade Park. Thomas Land Development has grand plans for its 175 acres, which include bringing in Whole Foods, iPic Theatre, Pinstripes, and Hotel Zaza. The project will also feature another hotel: the Langham Hotel Tower. Set to open in early 2018, the 35-story tower will include 25 floors of luxury hotel rooms, 25,000 square feet of meeting space, a rooftop pool deck and 10 floors of residential homes.

Those four projects alone total a whopping $5.4 billion, stretched along a mere 5,280 feet in Frisco. Quinn pointed out that the investment value breaks down to nearly a million dollars per linear foot.

Though Frisco’s growth – both in population and development – has been rapid, city leaders said this is the goal toward which they’ve been working for many years.

“Frisco’s first master plan was adopted in 1982 and has been continually updated since then, thus the growth has been in the planning for decades,” said George Purefoy, Frisco’s city manager. “Furthermore, the city has been successful in implementing these plans.”

Part of that plan included building Frisco as a bedroom community in the beginning, as a way to draw corporations down the road.

“When you can attract a skilled work force to live here, people are starting to look and say, ‘Well, instead of moving and trying to lure my folks to come live by me, why don’t I just locate in a location where they are already living?’” Quinn said. “Our demographics were very favorable for the top of investment that’s being made in our area.”

The Frisco Independent School District played a huge role in helping bring families north of Dallas.

“In Frisco’s case, the Frisco Independent School District and the city working together for our citizens has proven to be one of the key factors in our success,” said Purefoy. “The small school model adopted by the school district has made Frisco a preferred location.”

As the district has growth, so has the city, sharing the benefits through Tax Increment Financing. Frisco’s TIF Zone No. 1, started in 1997, was a partnership between the City of Frisco, Collin County, Frisco ISD and Collin County Community College District. It helped build the Frisco Superdrome, the Frisco Sports Complex, Dr. Pepper Ballpark, Dr. Pepper StarCenter and Pizza Hut Park.

“The District’s involvement allows us to participate in public-private projects with the City of Frisco that create world-class opportunities for our students, while saving taxpayer dollars and stimulating economic growth and development,” said Frisco ISD’s Dr. Lyons.

Quinn said, once the first domino fell in the form of Toyota’s relocation to Frisco, the rest followed suit.

“When you have someone like a Toyota make the decision to move to North Dallas, obviously others work around and say, ‘Why did they do that?’ They start to follow that move because they know Toyota wouldn’t have done it if it wasn’t a great location and if there wasn’t some importance to do in that,” said Quinn. “That’s what we’re seeing on a corporate side. Each time we have a corporate announcement, it makes it a little easier for the next corporate person to come in and make a decision to move to North Texas.”

Both Purefoy and Quinn credit some of Frisco’s success to the Texas business environment.

“If you want to do business on the east or west coast, you can do that from Dallas, Texas and it’s really easy,” explained Quinn. “You’re no more than three hours from either coast. You work on Eastern timezone and Pacific timezone. From us, it’s very easy to do business.”

Frisco stands as just one example of how, with a little planning and foresight, communities are able to exploit the attractive qualities of North Texas and convert them into local benefits. There will certainly be many more examples in the years to come.