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New water restrictions in works/ Big Multifamily Projects back from Dead (ABJ)

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Cody Lyon
Staff writer – Austin Business Journal
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Businesses are being asked to come up with new ways to conserve water, long term, to avoid stifling Stage Three water restrictions.
A Dec. 13 public workshop will kick off a months-long process that aims to revise current drought restriction language or code.
The drought has put commercial property owners in a pinch — limiting landscaping, devaluing property, putting buildings at risk of deterioration and hindering some development. And that’s under the current Stage Two water restrictions.
If Austin Water goes to Stage Three — which could happen by spring — even more drastic measures would be taken. Car washes would be limited to running five hours a day; property owners would not be able to use their sprinklers at all; and landscapers would be forced to resort to options that are drought-tolerant.
The city hopes business and civic leaders will help it come up with less drastic conservation measures to cope with a long-term drought; some are calling it “Stage 2.5.”
“We propose opening up the code, doing some housecleaning and perhaps putting in place some of the conservation measures [the Austin City Council] has recommended,” said Drema Gross, water conservation manager for the city of Austin.
The most significant of those would be mandatory irrigation audits for large commercial and multifamily properties, Austin Water spokeswoman Jill Mayfield said.
“It would be basically an assessment, making certain that large property owners are conserving,” Mayfield said.
Conservation is key. Under current code, when combined levels at lakes Travis and Buchanan reach 681,000 acre-square feet, the city manager would decide whether to implement Stage Three. But those restrictions were written for sudden disasters, such as a water treatment plant’s failure or some other immediate threat. The mandates that come with Stage Three were never meant to last long-term.
“We’re looking at the entire code, and hope to get input on variances, landscaping and other issues, such as whether or not single-family home landscaping should be treated the same as commercial property,” Gross said.
Already, businesspeople are paying attention, and many are eager to share their ideas for the long term.
“Commercial property owners have a vested interest in professional landscaping maintenance,” said Jody McDaniel, manager of Greater Texas Landscapes Inc. and chairman of Building Owners and Managers Association-Austin’s water sustainability task force.
An owner’s inability to water landscaping could lead to a 20 percent drop in value, he said.
Developer Rance Clouse, president at Fortis Realty Services LLC, has already seen the impact of Stage Two. He’d been planning to use a new drought-friendly habiturf grass at his new Pease Place multifamily development in West Austin.
But, in order to get the plant to take hold, he would have to irrigate it intensely for three to four weeks, so mulch is his only option for the foreseeable future — and not an ideal one for builders trying to sell or lease properties.
He’s not alone. City officials have asked developers and contractors to delay planting until April, Big Red Dog Engineering President Will Schnier said. In the meantime, mulch and dirt will reign.
Land planner and landscape architect Mitchell Wright, president at Vista Planning and Design, suggested that Austin make better use of so-called gray water. A tremendous amount of water gets lost through showering, laundering, car washes and doing dishes. Such water re-use systems are expensive to install, however.
Water experts said now would be a good time to implement regional water conservation measures. There are dozens of cities, municipal utility districts and water supply corporations in Central Texas, and each has its own way of dealing with the drought. That creates an uneven playing field, economically.
“If three out of four cities have strict rules, it gives a leg up to cities that have the less restrictive policy,” said Tom Mason, a partner at law firm Graves Dougherty Hearon & Moody PC and the former director of the Lower Colorado River Authority, the entity that regulates much of the water flow in Central Texas.
The Dec. 13 public workshop to discuss new conservation measures will be from 7-8:30 p.m. in Room 104 of the Waller Creek Center, 625 E. 10th St. END

MULTIFAMILY
1/27/2012 Projects back from the dead

By Cody Lyon

Several multifamily and mixed-use projects that were put to sleep by the downturn are coming slowly back to life as lending
markets thaw and the demand for rental housing grows.

Before the downturn in 2008, the Austin area had about 12,000 units that were aggressively seeking construction financing, said
Charles Heimsath, president at housing research firm Capitol Market Research.

When the markets crashed, most of those projects were put on ice. Since then, Austin weathered the economic storm better than
most, but global and national economic woes still slowed construction here. About 4,800 rental units are under construction here
today, and about half of them are projects that were put on hold three or four years ago, Heimsath said.

Projects that are dusting off plans or already under construction include the following:

The 336-unit Genesee, a mixed-use development under construction at 3715 S. First St.
Phase one of the Lakeshore project, which will yield 236 apartments at 2220 Elmont Dr. just south of Lady Bird Lake
The 250-unit District at SoCo at 501 E. Oltorf St. in South Austin
District at SoCo is being developed by Houston-based Kaplan Management Co. The company secured the site in 2006, but by the
time it obtained development entitlements the financial world had started to implode, Kaplan Partner and Chief Financial Officer
Geoff Simpson said.

“Unfortunately, we’d already demolished the existing building on the site,” Simpson said. But recognizing the potential, Simpson held on.

“In early 2011, we decided the demand for apartments in Austin, as well as financing markets, was starting to come back,” he said.

Eventually, Kaplan teamed with American National Insurance Co. for financing. With apartment occupancy averaging about 97
percent citywide, Simpson wishes the units were ready to lease.

“We should have our clubhouse in April and our first units soon after,” said Simpson, who is scouting Austin for another site.
Executives at Cypress Real Estate Advisors Inc., which is developing Lakeshore, said they started seeing market recovery in 2010.
The Lakeshore project was put on hold about four years ago.

Long-planned downtown projects such as the Seaholm mixed-use project are also inching forward and are in talks with tenants for office and retail space.

“We are very close to having our site plan approval. We are moving ahead and are in schematic design,” said Danny Roth of
Southwest Strategies. He said the developers have equity in place and are finalizing their financing.

Executives at Big Red Dog Engineering and Consulting — which is working on the Lakeshore, District at SoCo and Genesee projects — said the company has seen an uptick in retail clients picking up where they left off and that multifamily has been the most active revival market for the firm.

“The multifamily market is in some ways better now than it was in 2007,” Big Red Dog President Will Schnier said.
The biggest surge of revived projects have been in or near the city’s core. Some developers said that lenders have been making
Central Austin projects easier to bring back to life.

“Institutional money has been focused on the urban core, while suburban deals are being driven primarily by private capital,” said John Burnham, managing director of multifamily development at Cypress Real Estate Advisors.

Meanwhile other forms of capital are also enabling projects beyond Central Austin to move forward.

“Some of the alternative capital is coming from high-net worth individuals and families, and also from companies that have
continued to make money in other industries, such as oil and gas, that have decided to diversify their risk,” said Monte Lee-Wen,
president and CEO at PPA Group.

Developers seeking to revive dormant projects need to be creative when banks and other financial institutions become more
conservative, he said.

“These sites that have been asleep produce no cash flow until they are developed; therefore, the owners are motivated to revive them as long as there is some sort of demand,” Lee-Wen said.

http://www.bizjournals.com/austin/print-edition/2012/01/27/projects-back-from-the-dead.html

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Written by codylyonreporter

January 31, 2012 at 2:34 am

Posted in Uncategorized

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