BG Reads | News You Need to Know (February 10, 2021)
[BINGHAM GROUP]
NEW // BG Podcast EP. 128: Talking Tech Flight and Austin with Kleiner Perkins Investor Haomiao Huang, PhD.
Today’s episode features Kleiner Perkins Investor Haomiao Huang, PhD. With all the recent and continued media hype around tech flight to Austin (and Miami), we wanted to get on the ground perspective from Sand Hill Road. As a bonus, Haomiao grew up in Austin (he and Bingham Group CEO A.J. attended the same high school - Go Jags!). Haomiao also discusses his path into the venture capital world, and thoughts on being a good investor.
You can listen to this episode and previous ones on Spotify, Apple Podcasts, and SoundCloud.. Please like, link, comment and subscribe!
CITY OF AUSTIN
THE 87TH TEXAS LEGISLATURE
LINK TO FILED HOUSE BILLS (1,948)
[AUSTIN METRO]
May 1 Austin ballot is set: Homeless camping, strong mayor and 11th City Council district up to residents (Community Impact)
It’s official. Austinites will head to the ballot box this spring to weigh in on a menu of changes to the city’s democratic processes as well as a handful of largely controversial policies around homelessness following City Council approval of ballot language on Feb. 9.
As for the overhaul of the democratic process, voters will be asked whether they support aligning the mayoral election with the presidential election cycle; implementing a system of ranked-choice voting if and when it’s allowed by state law; eliminating the city manager position and transitioning to a strong mayor form of a government; creating an 11th City Council district; and implementing a campaign finance system that does not limit campaign spending and offers $25 to every voter to donate to campaigns of their choice.Three ordinance changes related to homelessness are also in play. Voters will be asked whether they support reinstating the criminal penalties for camping in public, sitting, lying down or sleeping on downtown and university sidewalks, and aggressive solicitation.
Discussions around strong mayor and ranked-choice voting have been happening in the background for years but the PAC Austinites for Progressive Reform, formed in July 2020, drafted a petition that garnered enough support to put the issues on this May’s ballot.
City Council’s June 2019 decision to reduce the legal burdens on the homeless community and repeal criminal penalties for public camping, sitting and lying down and solicitation has been battling pushback for over a year. The petition to reinstate the penalties, drafted by Save Austin Now, drew more than 26,000 valid signatures to earn a place on the May 1 ballot.
Austinites will also see two other questions this spring. One could give the local firefighters union the ability to force labor negotiations into arbitration if they and the city reach an impasse. This, too, was brought by valid petition. The other, brought by City Council, asks voters if they support City Council creating the position of director of the office of police oversight.
Election Day is May 1. Voters will see the propositions in the following order... (LINK TO STORY)
By opposing North Austin rezoning, Kelly sets tone for future zoning cases (Austin Monitor)
At last week’s City Council meeting, new member Mackenzie Kelly offered a first glimpse of her approach to zoning cases: respect for neighborhood opposition.
Kelly cast the lone dissenting vote in a request to allow multifamily housing on a North Austin tract, siding with neighbors opposed to the proposal.
“I read through the public remarks,” Kelly said, “and the points were very persuasive.”
Several neighbors objected on the grounds that the development would alter the neighborhood’s low-density character, lower property values and increase traffic, rendering adjacent streets unsafe for walkers and joggers.
Vineyard Christian Fellowship, whose church sits on 8 acres at 13208 Morris Road, requested the rezoning in order to develop the rest of the property. The property is in Kelly’s District 6, and Kelly said she grew up nearby.
City staffers recommended Multifamily Residence-Low Density (MF-2) district zoning on the north part of the property and Limited Office-Mixed Use (LO-MU) combining district zoning on the south part, which would allow 80-90 multifamily units and an expansion of the church’s day care center. The Zoning and Platting Commission unanimously recommended staffers’ proposal.
Kelly pointed to “existing traffic and safety concerns” and implied that the increase in car trips would make nearby roads, such as Anderson Mill Road, less safe. “We’ve had speeding in school zones up and down Anderson Mill for years,” she said. “I grew up there; I went to the schools there; and kids from all ages walk to and from school and have to cross Anderson Mill and Morris Road to get to their schools every day.”
Kelly asked if a traffic impact analysis is planned. Jerry Rusthoven, assistant director of the Planning and Zoning Department, said that the development will likely be too small to need a traffic study. Rusthoven also said that the city owns enough right-of-way for Morris Road to be widened, if needed.
Kelly also mentioned the difference in value between the neighboring properties and the proposed units. “To change the zoning to accommodate a large, 89-unit condominium project with prices that will range from $425,000 to $550,000 is astonishing to me,” Kelly said. “Directly across the street from the proposed condo complex are duplexes and homes with families struggling to get by.”
“Due to the large amount of condos proposed there, I can’t support this,” Kelly said. “Perhaps we could do a real happy compromise with less units?” The other Council members did not comment, and voted to approve the rezoning… (LINK TO STORY)
Austin drops to Stage 4 Risk Guidelines as COVID-19 numbers trend down (KUT)
The city's interim health authority says coronavirus cases, hospitalizations and intensive care admissions have come down enough to bring the Austin area out of the highest level of risk-based guidelines.
"We feel strongly that there is not an immediate danger of overwhelming our health care system by transitioning to stage 4," Dr. Mark Escott said. "But that doesn't mean it's time to burn the masks and go back to normal. We still have to maintain protections and we still have to work hard to drive down transmission of the disease."
The seven-day average for new daily COVID-19 hospital admissions is at 55, falling below the threshold that kept Austin and Travis County at stage 5 guidelines for nearly a month and a half. Out of more than 20,000 tests reported to Austin Public Health last week, 9.4% tested positive. That's the first time that number has been under double digits in seven weeks, though Escott said that percentage could change slightly as more results come back.
"There are some concerns out there; we're concerned about the impact of the Super Bowl over the past weekend, we're concerned about Valentine's Day, we're concerned about the new variants," Escott said.
Stage 4 guidelines recommend avoiding gatherings of more than 10 people who live outside your household. Higher-risk individuals should limit exposure to no more than two people and should still only travel outside their home for essential trips. Businesses are recommended to operate at a maximum of 50% capacity.
Escott says projections from the UT Austin Modeling Consortium indicate the rolling average for new daily hospitalizations could drop to 30 by next month.
"If we can avoid the crowds, avoid the large gatherings while we're in stage 4, it's going to put us in a better position to push our risk down further and hopefully be in stage 3 by early March," Escott said… (LINK TO STORY)
Arbitrator: Nate Paul defrauded Mitte Foundation (Austin Business Journal)
Local real estate heavyweight Nate Paul defrauded the Roy F. & Joann Cole Mitte Foundation through limited partnerships that have been the focus of a years-long legal dispute between Paul's company, World Class Holdings, and the Austin-based charity, according to a Feb. 8 decision by arbitrator Suzanne Covington.
The final award issued by Covington calls for Paul to pay at least $1.9 million to the Mitte Foundation across wrongful fees and charges, punitive damages and attorney's fees. The arbitration award also wipes out nearly $2.6 million charged to the limited partnership accounts by its general partners, which were created and controlled by Nate Paul.
The dispute was one of the first major rifts involving World Class — which has since filed a slew of bankruptcies and lawsuits — and its conclusion could put some key properties downtown up for grabs.
The arbitrator's award became public Feb. 9 when the Mitte Foundation's attorneys filed an application in state court for the confirmation of the document. The partnership agreement between the two sides states that any dispute that can’t be resolved through mediation is to be settled by binding arbitration in Travis County.
World Class and the Mitte Foundation formed a pair of limited partnerships in 2012 to invest in downtown Austin real estate. But the partnership soured over sharing financial records, and spilled over into the courts in December 2018. In the past two-plus years, the case has meandered through mediation, arbitration, district court, bankruptcy court and the Texas Court of Appeals.
“It’s a major, major step, because the arbitration was the primary battle ground," said Ray Chester, an attorney with McGinnis Lochridge representing Mitte Foundation. "That is over, and we’ve scored a decisive victory."
Attorneys for World Class did not immediately respond to a request for comment. World Class had accused the Mitte Foundation of sharing "highly sensitive financial information with third parties" without its consent, according to court records. The Mitte Foundation, on the other hand, accused World Class of self-dealing and diluting the foundation's interest in the investment properties because it "didn't cough up more money" when World Class made capital calls.
It's unclear how World Class might respond. The arbitrator determined that the limited partnerships should sell their downtown holdings and be dissolved… (LINK TO STORY)
Williamson County hires lawyers to possibly file suit against Austin over homeless hotel (Austin American-Statesman)
Williamson County commissioners on Tuesday approved hiring lawyers to explore legal options, including filing a lawsuit, to prevent the city of Austin from using a hotel to house homeless people.
Last week, the Austin City Council approved spending $9.5 million to buy the Candlewood Suites at 10811 Pecan Park Blvd., an area of Austin that is in Williamson County.
Commissioners had asked the Austin City Council last week to delay its decision to buy the hotel for six months because they had only recently learned of the project.
By a unanimous vote, the Commissioners Court on Tuesday approved exploring legal actions against Austin over the hotel purchase.
"This is not about homeless individuals; I have deep compassion for them and I think everyone on the court does," Commissioner Cynthia Long said on Tuesday. "This is about the callous disregard the city of Austin has displayed and its impacts not only to the local government but the school district as well as the county, and also adjacent property owners."
Residents and a hotel owners near Candlewood Suites told the Williamson commissioners last week and again on Tuesday that their businesses would suffer and their quality of life would be affected by the city of Austin's decision… (LINK TO STORY)
[TEXAS]
State legislatures are trying to run America’s cities (D Magazine)
Perhaps this whole conversation about what kind of government Dallas should have will soon be irrelevant. According to a new report in Governing, over the past decades, state governments have become increasingly aggressive in stepping in to exert influence over local policy matters. During the COVID-19 pandemic, as emergency orders have given state officials more control over local jurisdictions than usual, this trend has only accelerated. This is not news for Texans. Dallas officials and Texas legislators have been butting heads for years over local control on issues ranging from cellphone regulations to sanctuary cities. The most recent confrontation has come over policing. Last year, the city of Austin repurposed funds from its public safety budget to convert two downtown hotels into housing for the homeless. That prompted Gov. Greg Abbott to suggest the state take over the policing of the center of Austin. The governor also supports legislation that would prohibit local governments from cutting their police budgets.
Talk about a nanny state – but Texas is not alone: A 2018 survey found that 70 percent of local health officials and 60 percent of mayors had abandoned or delayed policies due to the threat of state preemption. The coronavirus pandemic has only accelerated health preemption efforts. Bills have been introduced in roughly half the states to put new limits on public health authority, including their ability to shut businesses or impose mask mandates.
So, what gives? I believe it goes beyond questions of jurisdiction and governance. The conflict between state and local governments is only the latest front in the ongoing culture wars that characterize an increasingly divided United States – a country that, regardless of what Bruce Springsteen says in a Super Bowl ad, has separated into ideological camps with radically different ideas about the nature of the rights and liberties guaranteed in the U.S. Constitution. It’s no surprise, after all, that the issues that state governments around the country want to control tend to relate to broader cultural divides in the country, typically setting right-leaning state governments against broadly left-leaning local governments. That includes policing, as well as health and education. States have threatened to withhold funding for public schools unless they reopened for in-person classes during the pandemic.
States have also limited local governments from passing regulations around minimum wage, gun control, environmental issues, and gay and transgender rights. But it doesn’t stop there. “Although such high-profile battles have drawn the most attention, preemption has become habitual in some states,” Governing reports, “with legislators looking to micromanage areas such as parking regulation and building design requirements.”… (LINK TO STORY)
Lt. Gov. Dan Patrick casts doubt on push to legalize sports betting in Texas (Dallas Morning News)
Lt. Gov. Dan Patrick doesn’t expect a push to legalize sports betting in Texas to go anywhere in this year’s legislative session. The Republican said Tuesday that expanded gaming doesn’t have the votes to advance in the GOP-led Senate, or even his backing. “I’m not a big supporter of it,” Patrick said on the Chad Hasty radio show. His skepticism comes one day after The Dallas Morning News reported that the state’s biggest sports teams, including the Dallas Cowboys, Texas Rangers and Dallas Mavericks, are mounting a major effort to legalize sports betting in Texas this year. The alliance has said the move would generate “hundreds of millions of dollars of new revenue for the state,” but Patrick questioned that argument, suggesting the new infusion of funds would cover only a tiny fraction of the state’s annual budget.
The sports betting push is not the only effort this year to expand gaming in Texas. Las Vegas Sands has also mounted an initiative to bring casing gambling to the state. Patrick suggested Tuesday that competing interests between race tracks, casinos and sports teams could sink expanded gaming before a bill is even filed. “There’s so much infighting and competition among all the people in that arena, that’s why it never goes anywhere,” he said. “And so it’s not even an issue that’s going to see the light of day this session.” A spokeswoman for the Sports Betting Alliance said legislation will be filed in the coming weeks. “We’re seeing strong support from legislators we are talking with on this issue,” spokeswoman Cara Gustafson said in a statement. “Texans overwhelmingly want the opportunity to vote on sports betting and we will continue to encourage the Legislature to give them the opportunity to decide.” Legalizing sports betting would require a constitutional amendment, which needs approval from two-thirds of both the House and Senate. If that were to pass, a majority of voters would then need to agree… (LINK TO STORY)
[NATION]
Senate declares that Trump's impeachment trial is Constitutional (NPR)
The second impeachment trial of Donald Trump will move forward after the Senate voted Tuesday that the trial of a former president is constitutional.
Trump was impeached by the House last month on a charge of inciting an insurrection at the U.S. Capitol on Jan. 6.
The Senate vote on Tuesday was 56-44, with six Republicans joining all 50 members of the Democratic caucus.
The Republicans who voted for the trial's constitutionality were Sens. Susan Collins of Maine, Bill Cassidy of Louisiana, Lisa Murkowski of Alaska, Mitt Romney of Utah, Ben Sasse of Nebraska and Pat Toomey of Pennsylvania.
Cassidy's vote is notable because he was the only senator to switch sides from an early procedural vote on the trial's constitutionality.
The Louisiana Republican told Capitol Hill reporters that he thought Trump's legal team did "a terrible job" on Tuesday.
The trial will begin its next phase on Wednesday at noon ET. Each side — House impeachment managers, followed by Trump's defense team — will have up to 16 hours over two days to make its case for conviction or acquittal… (LINK TO STORY)
Why bitcoin hasn’t gained traction as a form of payment (Wall Street Journal)
Want to buy your next car with bitcoin? What about your next cup of coffee?
Elon Musk, a longtime advocate for bitcoin, will soon give Tesla Inc.’s TSLA -1.62% customers the chance to buy the company’s electric vehicles using the digital currency. The news—along with Tesla’s move to acquire $1.5 billion of the cryptocurrency for its corporate treasury—sent the price of bitcoin up 25% from Sunday to a new intraday record of $48,226 on Tuesday.
For bitcoin bulls, the announcement was the latest sign of validation for the burgeoning digital currency.
Despite making inroads with investors, bitcoin has been slow to take off as a form of payment. It was originally created in 2008 to operate like an electronic version of cash, allowing two people anywhere in the world to digitally exchange value as if they were physically exchanging cash.
In practice, it hasn’t worked that way. The cost of using bitcoin, and its volatility, have made normal, day-to-day transactions impractical. That isn’t likely to change with Tesla’s acceptance of the currency.
For users who might want to buy something small, say a $4 cup of coffee at Starbucks, bitcoin is an unattractive payment option because of the associated fees. The median transaction fee is currently around $5.40, according to the website BitInfoCharts, but the average is more than $11, and it varies wildly, depending on network traffic. (The fee rises when traffic is heavier.) Over the past three months, the daily average fee has varied between $2.18 and $17.20.
Luxury purchases, on the other hand, are where bitcoin has found its niche. Concerns about such fees are unlikely to be an issue for large-scale items, like an $80,000 Tesla Model S.
Bitcoin buyers tend to be loyal and spend more, said Jeff Klee, chief executive of CheapAir.com, which has been accepting bitcoin since 2013. “Since we started accepting bitcoin, we have consistently seen a ‘wealth effect’ where sales have increased as the valuation has gotten higher,” he said.
Among the other stumbling blocks bitcoin faces in becoming more ubiquitous is its inherent volatility. Despite its recent surge in value—bitcoin has nearly quadrupled since September—it still swings wildly. It can rise or fall 20% in a single day, sometimes for no apparent reason… (LINK TO STORY)