Judge halts Austin's plan to use tax revenue for Lady Bird Lake redevelopment

Ella McCarthy, Austin American-Statesman
Updated ·2 min read

A judge has put the brakes on the city of Austin's plan to use up to $354 million in tax revenue to foot the bill for streets, sidewalks and other infrastructure in the redevelopment of the South Central Waterfront area.

Travis County District Judge Jessica Mangrum on Friday ruled in favor of plaintiffs who sued the city in 2023, claiming the city illegally created a Tax Increment Reinvestment Zone (TIRZ) for 118-acres on the South Central Waterfront District, including the former Austin American-Statesman site.

“The City is legally required to show that the land is blighted and would not develop without public subsidies," Bill Bunch with Save Our Springs Alliance and an attorney for the plaintiffs said in a news release on Monday evening. "The City failed to present any evidence that public funds were needed for the land to develop.”

The City Council approved the creation of this TIRZ in December 2022. A TIRZ takes some of the tax revenue the district generates for the city's general fund and reverts it back to pay for infrastructure projects in that area.

"We are disappointed in this ruling but very much appreciate the court’s careful consideration of this complex issue.  We will review the specific implications of the decision in the coming days," Meghan Riley with the city's legal department said in a written statement. "That said, we do not believe this decision impacts the City’s ability to move forward with proposed zoning changes for the South Central Waterfront area."

Some of the redevelopment plans, like those for the 19-acre property that formerly housed the Statesman office, include several tall towers, apartments, parks and more.

Read More: City of Austin seeks public comment on development rules along south Lady Bird Lake

“I don't know where that lawsuit is going to go, if it'll be appealed or not, since we're not involved,” Richard Suttle, who is representing the Endeavor Real Estate Group that is redeveloping the 19 acre property, told the Statesman. “I just know that the city's aspirations for this area includes some extraordinary infrastructure that can't be borne by just one developer or even several. It's stuff that’s appropriate for the city to invest in as well, whether it’s a TIRZ or other investments.”

This article originally appeared on Austin American-Statesman: Judge halts city funding plan for Lady Bird Lake redevelopment