BG Reads | News You Need to Know (March 1, 2021)

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Written By AJ Bingham
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[BINGHAM GROUP]

CITY OF AUSTIN

  • Work Session of the Austin City Council (3.2.2021 @9AM)

  • Special Called Meeting of the Austin City Council Joint Meeting with Travis County Commissioners Court (3.2.2021 @9AM)

  • Regular Meeting of the Austin City Council (3.4.2021 @10AM)

THE 87TH TEXAS LEGISLATURE

[AUSTIN METRO]

Samsung’s request to pay no property tax on $17 billion plant tests Austin’s incentive policy (Community Impact)

Samsung Semiconductor is shopping around a $17 billion, 6.1 million-square-foot chip manufacturing plant, and if the tech giant chooses Austin, one of three U.S. locations under consideration, the project would be one of the largest single economic investments in Texas history. In return, Samsung has asked the city for a record tax incentive package for the plant—a 100% property tax rebate for 25 years, according to documents reviewed by Community Impact Newspaper.

According to the documents, the plant would come with $5.6 billion in construction costs and $11.4 billion worth of machinery and equipment. Samsung promises to create up to 1,993 jobs, of which 1,800 carry an average salary of about $100,000. The plant would be the largest single investment in the Austin region and easily surpass recent billion-dollar projects such as Tesla’s Gigafactory in 2020 and the Apple campus, announced in 2018.

A 100% property tax reimbursement over 25 years would mark the most aggressive corporate tax break in Austin history. What it equals in actual dollars is unclear. According to the documents, Samsung already rejected a 10-year agreement offered by the city that included nearly $650 million in property tax and other incentives. The offer by the city is nearly six times greater than all five of its active economic incentive packages combined.

A Dec. 9 analysis on the project from Impact Data Source estimated a 20-year, 100% Travis County property tax reimbursement would be worth about $718.3 million. The analysis used the existing Travis County property tax rate of $0.374 per $100 in valuation. Austin’s current property tax is $0.535 per $100 in valuation.

Spokespeople from the city and Samsung have declined to confirm any information regarding the deal as of press time. Community Impact Newspaper specifically asked Samsung whether the widespread failure of the state’s energy grid following winter storms Feb. 14 would affect the company’s decision, but Samsung did not comment.

Incentive deals such as this are often negotiated in secret to protect the sides’ negotiating positions. The public is only brought in after an agreement is reached and brought to City Council for approval. Some experts and members of the public have questioned offering a large tax break to a corporation bringing only 1,800 high-skilled jobs to an already humming economy. The project also runs counter to the city’s own commitment to focus its incentive program on assisting small businesses… (LINK TO STORY)

Nobody knew how to restore power at Ullrich Water Treatment Plant during the freeze. It was out for three hours (Austin American-Statesman)

On a normal day, Ullrich Water Treatment Plant produces roughly half of Austin's drinkable water and is crucial to keeping the city's water system functioning. State regulations require the plant to either have access to a backup power source or a substantial amount of water reserves in case the plant sees an unexpected shutdown. Ullrich has both. So when a tree limb fell on an electric line leading to a substation that powered Austin's largest water treatment plant on Feb. 17, backups should have snapped into place to keep power running and water production churning. But there was a problem: Nobody on site knew how to operate a 52-year-old gear switch that would have restored power to the plant.

And so Ullrich Water Treatment Plant went dark for three hours in the middle of the worst winter storm to strike Central Texas in decades. It cut off roughly half of the city's potable water production and deepened the winter weather crisis that at that moment had thousands shivering without electricity in their homes.

The outage resulted in the plant operating below capacity for more than 10 hours, according to Austin Water. During that time, water drained rapidly from the city's water reserves, bled by thousands of burst pipes and dozens of broken water mains. The failure of dual redundancies at Ullrich helped trigger a citywide boil water notice and contributed to widespread loss of water pressure that included forcing the evacuation of many patients from St. David's South Austin Medical Center. In the weeklong winter storm, the loss of power at Ullrich represents an inflection point when the city's power crisis became a water supply crisis… (LINK TO STORY)

Construction imminent for Longhorn Dam bridge (Austin Monitor)

The Austin Transportation Department decided last month on Longhorn Dam’s new bike and pedestrian bridge, which is designed to increase safety on Pleasant Valley Road and connect trails and parks in the area.

The bridge’s design is “wishbone style” and will be located near Guerrero Park on Pleasant Valley Road. After removing the current pedestrian bridge, new walkways will connect Holly Shores Park, Longhorn Shores Park and the Ann and Roy Butler Hike-and-Bike Trail. The bridge is expected to be completed in 2025.

Construction was scheduled to begin in January, but the winter storm caused significant delays. Before the bridge can be built, ATD plans to install pedestrian hybrid beacons at crosswalks to bolster walkers’ safety.

“We are working quickly to get that work started, but it’s been a couple of weeks later than we thought,” ATD spokesperson Emily Tuttle explained.

Since the crews that were slated to work on the beacons are working on emergency response efforts and installation requires dry soil, more days were added to the timeline.

Some work has been done on the project, such as identifying power sources for the beacons, but more robust construction will begin in March.

The design decision comes after years of discussion starting in 2016. After funding was approved, a consultant was selected in 2018 to carry out preliminary engineering and public input began in 2019. The projected cost is $12.6 million.

The center of the bridge will feature a trellis structure with vine cover as well as benches and LED lights for safety. The current parking lot on Canterbury Street will be replaced with parallel parking spaces to make way for a walkway to the bridge. Underneath, a new tunnel will be constructed and the old one filled in.

The Transportation Department says it will honor existing landmarks, like the scenic overlook memorializing Tejano music legend Roy Montelongo and installations by artist Connie Arismendi. ATD will also identify organizations to partner with to maintain the bridge as well as coordinate live music, outdoor education and other events.

The design was chosen after a 2019 public survey in which 41 percent of respondents favored the wishbone design out of five options. The next most popular design garnered only 19 percent. Categories taken into consideration were safety, accessibility, environmental impact and cost.

ATD is adding safety features like reduced speed limits, more crosswalks, wider shared-use paths, and connections to other trails to increase pedestrian access around the Pleasant Valley area before construction begins on the bridge. One of the main drivers behind the project is mitigating road injuries and fatalities on Pleasant Valley, one of Austin’s most dangerous streets and a Vision Zero High-Injury Roadway.

A physical barrier will be constructed between lanes to reduce head-to-head collisions. New left-turn lanes will also be added to the roadway… (LINK TO STORY)

Austin housing inventory continues to flirt with zero (Austin Business Journal)

Austin’s white-hot residential real estate market doesn’t appear to be cooling down anytime soon – even with last week’s record-breaking cold weather.

Housing inventory for the Austin market dropped to an all-time low of 0.4 months in January, according to the Austin Board of Realtors. That’s down from 0.6 months in December and 0.9 months in November. Experts believe a healthy home market has an inventory closer to six months.

ABOR's latest Central Texas Housing Market Report predicts that last week’s winter storm will likely fuel housing demand – potentially adding more strain on an already tight market. Experts told Austin Business Journal last week that inventory will likely come off the market in the short-term to address damage caused by the storm.

 “The last week has shown us, once again, that our homes are more important than ever,” Susan Horton, 2021 ABOR president, said in an announcement.

 Vaike O’Grady, Zonda’s regional director for Austin, said housing inventory likely won’t hit the 0.0 mark.

 “We are going to see extremely tight housing supply for the foreseeable future. That said, there are likely some homes on the market that won’t sell no matter the price. I don’t think we’ll ever hit true zero, in terms of months of supply,” O’Grady said in an email. 

There were twice as many closings as active listings in January, according to O’Grady, which points to homes selling without ever being listed on MLS.

“Luckily, builders are starting new homes at a very strong pace. The increase in new home inventory is helping to satisfy demand short-term,” she said. “However, builders in Austin also are now limiting sales because they have so much sold inventory to build.  Delays in government approvals and permitting, coupled with materials shortages, mean that build times are getting extended.”

More than 6,000 new homesites are expected to come online between now and the summer, according to O'Grady — but those homes would only keep up with current demand.

"This means that homes will continue to sell as soon as they hit the market, and prices will continue to rise steadily in the months to come," O'Grady said in a separate statement.

Indeed, the median sales price for a home in the Austin-Round Rock MSA was $365,000 in January 2021, a year-over-year increase of 19%. The total sales dollar volume was $1.16 billion — up 53% from January 2020. Closed sales were up 23% to 2,523, while the average house spent 33 days on the market, down 33 days. New listings were down 11% to 2,878, while active listings were down 73% to 1,369. Pending sales for January 2021 were up 15% year-over-year to 3,365.

 January 2021 home sales were up 23.8% year-over-year for the city of Austin, 23.5% for Travis County, 11.2% for Williamson County, 50% for Hays County, 66.7% for Bastrop County, and 45% for Caldwell County.

Williamson County had the lowest housing inventory last month (0.2 months), while Caldwell County had the highest housing inventory (1.6 months). 

Home sales for the five-county Austin-Round Rock MSA jumped 23.9% in January 2021, according to the ABoR report. 

The complete Central Texas Housing Market Report for January 2021 can be viewed online here… (LINK TO STORY)

Opinion (Nico Ramsey and Joseph Parker): A strong mayor in Austin would be an obstacle to social justice (Austin American-Statesman)

Over the past few months, a group of political insiders has advocated to change our city’s form of government from a council-manager to a mayor-council, also known as “strong mayor.” They have also accused the council-manager form of government of being inherently racist because racist policies were implemented under a council-manager system in Austin during the segregation era. Such a narrow understanding of racism in America fails to identify the real struggles that so many in our society face every day — especially people of color.

Even Nelson Linder, Austin NAACP president and a member of Austinites for Progressive Reform — the group working to change to a strong mayor form of government — refuted the notion that the system itself is inherently racist. Specifically, he said recently, “let’s be real clear, during that point in time, Jim Crow was everywhere.”

We cannot become blind to the ways in which racism can be advanced under any form of government. What we must consider is how best to address issues of racism, social injustice and equity.

Systemic racism and the issues surrounding it are difficult to solve. However, social and racial equity will not be solved with a change in Austin’s form of government. Blindly assuming so is an offensive suggestion for those who live the Black experience, those who have dedicated their lives to anti-racism initiatives and those whom we have lost during this fight for racial equality.

George Floyd was killed in Minneapolis; Breonna Taylor was killed in her home in Louisville; Freddie Gray died in custody in Baltimore. These were all cities with a mayor-council (strong mayor) form of government. We saw social unrest in Seattle, Los Angeles, New York, DC, all cities with mayor-council forms of government.

The change we are looking for cannot be dependent upon the assumptions that come with these proposed changes to our city’s charter. We must come together as a community, city, country and people to achieve true equality.

Ramsey is the volunteer director of community engagement for Austin For All People – a volunteer-led organization – a corporate social responsibility professional and a civil rights activist. Parker is a volunteer co-chair for Austin For All People and the senior pastor at David Chapel Missionary Baptist Church… (LINK TO STORY)

“UT needs rich donors”: Emails show wealthy alumni supporting “Eyes of Texas” threatened to pull donations (Texas Tribune)

The Texas Longhorns had just lost to rival Oklahoma for the third time in a row — this time after a quadruple overtime.

The bruising loss was quickly overshadowed when then-Texas quarterback Sam Ehlinger stood alone on the field for the playing of the university’s alma mater song "The Eyes of Texas," a postgame tradition. The rest of the team, who typically stay to sing the song with fans at the end of games, had retreated from the field.

For many University of Texas at Austin students who had spent months protesting and petitioning the school to get rid of "The Eyes of Texas," it was gutting to see the student leader seemingly taking a stand. (Ehlinger later said he was only lingering alone on the field to talk with coaches.) The song — played to the tune of "I’ve been working on the railroad" — was historically performed at campus minstrel shows, and the title is linked to a saying from Confederate Army Commander Robert E. Lee.

But hundreds of alumni and donors were more concerned about why Ehlinger was alone. They blasted off emails to UT-Austin President Jay Hartzell, calling the image of the abandoned quarterback "disgusting," "embarrassing" and "disturbing." They demanded that the school stand up to "cancel culture" and firmly get behind the song — or else donors were going to walk away.

"My wife and I have given an endowment in excess of $1 million to athletics. This could very easily be rescinded if things don’t drastically change around here," wrote one donor in October. His name was redacted by UT-Austin, citing open records laws that protect certain donor identities. "Has everyone become oblivious of who supports athletics??"

Hartzell had already publicly stated the university would keep the song, but hundreds of emails obtained through public records requests show that decision didn’t quell the furor among some of the most ardent supporters of "The Eyes."

From June to late October, over 70% of the nearly 300 people who emailed Hartzell’s office about "The Eyes" demanded the school keep playing it. Around 75 people in emails explicitly threatened to stop supporting the school financially, calling on the university to take a heavier hand with students and athletes they believed were disrespecting university tradition by protesting it… (LINK TO STORY)

[TEXAS]

Fixing Texas’ energy infrastructure failures might go to a special legislative session (KCENTV - NBC)

With about 90 days left in the legislative session, Texas House Speaker Dade Phelan, R-Beaumont, said repairing the state’s broken energy infrastructure that led to the deadly power outages this month might go to a special session later this summer.

“We’re going to get something done on this. We have to. It’s a priority. People died. It’s as serious of an issue as it gets for the legislature,” said Speaker Phelan on Inside Texas Politics Sunday morning.

The state legislature adjourns May 31, which leaves lawmakers about 90-days to pinpoint critical infrastructure problems, create legislation, debate, and then vote on it.

“We are all expecting a special session, or two or three – at some point – maybe in the summer or fall [for redistricting]. If we don’t get it done, we will have another opportunity to get it done,” Speaker Phelan explained on the television program. 

“It is a priority in both the House and the Senate. I have reserved a low bill number in the House so it can immediately be referred to committee as soon as that bill or those bills are ready.” 

The House held hearings last Thursday and Friday, quizzing energy executives, the operator of ERCOT, the state’s electric grid, industry officials and more. 

But the exhaustive hearings did not identify a single root cause of the widespread electric outages in below-freezing temperatures that led to several dozen deaths, including children, across the state. 

Instead, lawmakers and the public heard how interdependent, nuanced and loosely regulated the different elements of the state’s energy infrastructure are. 

“We need more generation. A thousand people move here every day. They don’t bring asphalt. They don’t bring teachers. They don’t bring law enforcement with them and they don’t bring energy with them,” Speaker Phelan said. 

“So, we have to start building for the future. One solution would be more generation. Do we go from an energy only market to a capacity market where we have built in reserves? That would be great but it’s also very, very costly. And who pays for it? That’s the ultimate decision. Who’s going to pay for that reserve energy that we need in the very, very hot months and the very, very cold months?”… (LINK TO STORY)

In first visit, President Joe Biden commits to being "true partners" with Texas through storm recovery, vaccination effort (Texas Tribune)

President Joe Biden, in his first trip to Texas since taking office, toured Houston on Friday to size up the aftermath of the state's recent winter weather crisis and promote the national coronavirus vaccination campaign.

“We will be true partners to help you recover and rebuild from the storm and this pandemic and economic crisis," Biden said during a late afternoon speech outside NRG Stadium, the site of a vaccination mega-center. He promised his administration is in it "for the long haul."

Biden hailed the mega-center — one of three federally backed mass vaccination clinics in Texas — as a key part of his strategy to have 100 million vaccine doses administered in his first 100 days in office. The country reached the halfway mark Thursday.

"The more people get vaccinated the faster we'll beat this pandemic," Biden said, reassuring Americans that the vaccines are "safe and effective" and cautioning that it is still "not the time to relax" measures such as social distancing and mask-wearing.

Gov. Greg Abbott, who joined Biden in Houston, said Thursday his office is looking at when it could lift all statewide orders related to the pandemic. That would include the statewide mask mandate that Abbott issued last summer. He said an announcement could be coming "pretty soon."

Biden on Friday spoke from a parking lot outside the stadium, in front of a FEMA trailer and a row of health care workers who administer vaccines… (LINK TO STORY)

At CPAC, Ted Cruz says Orlando ‘not as nice as Cancun,’ vows to fight against ‘new Galactic Empire’ (Dallas Morning News)

After weeks of being lambasted by critics for controversial choices — first, his objection to certifying Arizona’s electoral votes and then his trip to Cancun during Texas’ devastating winter storms — Texas Sen. Ted Cruz refuses to be canceled. At the Conservative Political Action Conference in Florida on Friday, Texas’ junior U.S. senator used references to both Star Trek and Star Wars as he argued that he was fighting for liberty. In his animated speech, titled “Bill of Rights, Liberty, and Cancel Culture,” Cruz also sought to reestablish himself as a Republican outsider and supporter of former President Donald Trump.

He spoke at CPAC as President Joe Biden was visiting the senator’s hometown of Houston. Fellow Republican Sen. John Cornyn and GOP Gov. Greg Abbott joined Biden, as did Democratic U.S. Reps. Sylvia Garcia, Sheila Jackson Lee, Al Green and Lizzie Pannill Fletcher, all of Houston. White House Press Secretary Jen Psaki said “there was neither an invitation or a request” for Cruz to join Biden. “Orlando is awesome. It’s not as nice as Cancun, but it’s nice,” Cruz joked as he opened his speech. Cruz has spent the last week being roasted by critics for flying to Mexico with his family last week while thousands of Texans remained without power and water.

After returning to Texas less than 24 hours later, he acknowledged that the trip was “obviously a mistake.” In Friday’s CPAC speech, Cruz continued to mock New York Rep. Alexandria Ocasio-Cortez’s recounting of her experience when a mob of Trump supporters stormed the Capitol — “She was murdered!” And he jested about the mittens that Vermont Sen. Bernie Sanders wore to Biden’s inauguration… (LINK TO STORY)

Two men who saw the storm coming and sold their electric companies before disaster hit (D Magazine)

State lawmakers in Austin spent all of Thursday grilling the people responsible for keeping the power on in Texas. They want to know where and how the system broke down last week. But it really isn’t all that hard to figure out. Two former CEOs in Dallas saw this coming years ago, which is why they sold their companies. They’d separately come to the same conclusion: if something like last week occurred, it would put them out of business. One of those CEOs believed a disaster was likely, if not imminent. Stream Energy and Ambit Energy are electricity retailers. Both companies have, by all accounts, achieved great success. After Stream began registering users, in March of 2005, it took only 10 months to become the fifth-largest retail electricity provider in Texas. This was three years after the Legislature deregulated the state’s electricity market, turning what the rest of the country considered a closely regulated utility into a free-market spree.

For the first time, Texans could choose their energy provider. Upstart retailers didn’t generate their own power but would instead buy wholesale from major generators. They would market that energy to consumers, usually undercutting the retail arms of the larger producers. (The Legislature froze established rates to trigger market competition.) The retail market ushered in creative delivery plans like free usage during nights and weekends. Some credit the proliferation of Smart Meters directly to this free market approach. The idea of deregulation was to let the market drive energy production instead of any government agency, but that didn’t translate into sufficient reserve power or infrastructure improvements that may have helped keep the plants online in single-digit temperatures.

The Electric Reliability Council of Texas, known as ERCOT, manages the grid. It can order utility providers like Dallas’ Oncor to cut power to preserve the grid during periods of extreme demand, which is what happened last week. But ERCOT is supposed to be overseen by the Legislature and the Public Utility Commission of Texas, known as the PUCT. Neither did nearly enough to motivate generators to winterize their facilities or create enough additional power to fall back on in an emergency. The federal government even warned the electricity grid manager to do this in 2011… (LINK TO STORY)

[NATION]

FDA authorizes Johnson & Johnson coronavirus vaccine (Politico)

The Food and Drug Administration authorized emergency use of Johnson & Johnson’s coronavirus vaccine, adding a third option to the United States’ arsenal as President Joe Biden aims for broad protection by this summer. The J&J shot is the first one-dose vaccine to hit the U.S. market and is easily shipped and stored, presenting what could be a critical alternative for vaccinating hard-to-reach or skeptical Americans. FDA on Saturday cleared the vaccine for use in people 18 and older.

J&J has 4 million shots on hand, half of which will be shipped to state health officials in the upcoming week, according to Biden officials; the rest go to pharmacies and community health centers. The pharmaceutical company has said it can provide 20 million shots by the end of March and 100 million total by the end of June. The vaccine is 66 percent effective against broad coronavirus infection but particularly good at curbing severe illness, hospitalization and death, which J&J executives say is most important for consumers. An expert panel advising the FDA agreed, voting unanimously late Friday to recommend the vaccine for people 18 years and older.

“We need vaccines that are effective and well-tolerated. And importantly, ones that are simple to deploy,” Gregory Poland, director of the Mayo Clinic’s vaccine research group, said during a J&J presentation before the Vaccines and Related Biological Products Advisory Committee on Friday… (LINK TO STORY)

Trump calls for GOP unity, says he won't start another party (Associated Press)

Taking the stage for the first time since leaving office, former President Donald Trump on Sunday called for Republican Party unity in a speech at a conservative political conference, even as he exacerbated its divisions and made clear he intended to remain a dominant force in the party. Trump used his speech at the Conservative Political Action Conference, where he has been hailed as a returning hero, to blast his successor, President Joe Biden, and try to cement his status as the party’s undisputed leader despite his loss in November. “Do you miss me yet?” Trump said after taking the stage, where his old rally soundtrack had been playing. “I stand before you today to declare that the incredible journey we begun together ... is far from being over." Though Trump has flirted with the the idea of creating a third party, he pledged to remain part of what he called “our beloved party."

“I'm going to continue to fight right by your side. We're not starting new parties,” he said. “We have the Republican Party. It's going to be strong and united like never before.” The conference, held this year in Orlando instead of the Washington suburbs because of COVID-19 restrictions, has been a tribute to Trump and Trumpism, complete with a golden statue in his likeness. Speakers, including many potential 2024 hopefuls, have argued the party must embrace the former president and his followers, even after the deadly insurrection at the U.S. Capitol on Jan. 6. And they have repeated his unfounded claims that he lost the November election only because the election was “rigged” — claims that have been rejected by judges, Republican state officials and Trump’s own administration.

The conference's annual unscientific straw poll of just over 1,000 attendees found that 97% approve of the job Trump did as president. But they were much more ambiguous about whether he should run again, with 68% saying he should. If the 2024 primary were held today and Trump were in the race, just 55% said they would vote for him, followed by Florida Gov. Ron DeSantis at 21%. Without Trump in the field, DeSantis garnered 43% support, followed by 8% for South Dakota Gov. Kristi Noem and 7% each for former Secretary of State Mike Pompeo and Texas Sen. Ted Cruz. It is highly unusual for past American presidents to publicly criticize their successors so soon after leaving office. Ex-presidents typically step out of the spotlight for at least a while; Barack Obama was famously seen kitesurfing on vacation after he departed, while George W. Bush said he believed Obama “deserves my silence” and took up painting… (LINK TO STORY)

The Bingham Group, LLC is minority-owned full service lobbying firm representing and advising clients on government affairs, public affairs, and procurement matters in the Austin metro and throughout Central Texas.

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