BG Reads | News You Need to Know (February 21, 2023)

News
Written By AJ Bingham

(Monday) - Bingham Group CEO A.J. provided an overview of current action at the 88th Texas Legislature and City of Austin at the 8212 Club-Women Of Barton Creek Country Club luncheon.

Photo by Bingham Group

[AUSTIN city hall]

[AUSTIN METRO]

Ordinance would extend officer benefits if police labor contract expires (Austin monitor)

City Council will consider an ordinance Thursday that would preserve the current police labor contract’s provisions for officer pay and benefits, even if the contract expires without a successor in place, after the Austin Police Association said it wouldn’t negotiate a one-year labor contract extension with the city. 

“(L)et me be clear – this is not a better outcome than a one-year agreement with the police association,” Mayor Kirk Watson wrote on the City Council Message Board Friday. “It would be better for everyone if they would return to the negotiating table now, but if they do not then we must pass this ordinance to maintain effective recruiting and retention of officers.”

Council voted last week to direct staff to pursue an extension as an alternative to the four-year tentative agreement reached by the two bargaining teams, citing the May election, which includes two opposing propositions related to police oversight. 

But with APA reportedly refusing to return to the negotiating table and several Council members saying they prefer to let voters weigh in before locking the city into a long-term contract, it seems likely that the two parties could fall out of contract when the current agreement expires March 31… (LINK TO FULL STORY)

Austin police investigate series of street racing incidents over the weekend (KUT)


The Austin Police Department said it's investigating a series of incidents over the weekend in which cars were racing and blocking traffic. One officer was injured and multiple law enforcement vehicles were damaged, APD said.

Between Saturday night and early Sunday morning, officers responded to four separate incidents, starting at the intersection of Barton Springs Road and South Lamar Boulevard, then near the I-35 Frontage Road and East Anderson. Police were also called to the Mueller neighborhood near Berkman Drive and Barbara Jordan Boulevard, and later to the intersection of Metric Boulevard and Braker Lane… (LINK TO FULL STORY)

Inside the last days of City Manager Spencer Cronk (Austin Chronicle)

After five years on the job, City Manager Spencer Cronk had worn out his welcome with most City Council members, and with a wide swath of the Austin community. Still, his firing Wednesday morning in a 10-1 vote may have come as a shock to some Austinites. It was only a few weeks ago that Council approved an 11% raise (from $350,000 to $388,000) for Cronk, who, in overseeing the city's day-to-day operations, wields more power than Austin's mayor. Former Austin City Manager Jesús Garza will take over as interim city manager while Council deliberates on how they should go about filling the job permanently. Garza, who served as city manager from 1994 to 2002, is an old Watson ally. They worked together during Watson's first mayoral term (1997-2001), and Garza co-chaired the Stand Together Austin PAC, which helped put Watson back in the mayor's office in 2022.

Before Council coalesced around the idea of ousting Cronk, one argument in favor of keeping him was that a sudden change in leadership could freeze progress on issues at City Hall. Typically, interim executives are placeholders discouraged from moving boldly on issues, because policymakers want the opportunity to vet the person charged with making big changes. But Watson, along with the other new CMs elected to the dais, were elected on platforms promising big, bold change. It's a key priority for Watson, in particular, who will face reelection in 2024, because Austin voters approved a charter amendment in May 2021 to move mayoral elections to presidential election years. Placing Garza, who has a reputation as a competent city leader, could relieve some of these concerns. That said, when Garza led the city more than two decades ago, he had a much deeper bench of assistant city managers and department directors. Filling those vacancies will be a key priority for Garza to fulfill the policy vision set by Council. Garza, a bureaucrat whom Watson knows and trusts, could also help Watson navigate his transition into the kind of mayor the Austin of 2023 needs. The city is much different, and the people living within it more diverse, than when Watson last occupied the mayor's office inside of City Hall. At any rate, Watson made clear from the dais that he expects Garza to run the city differently than Cronk. "Let me be clear, we are not going to do our business like this. It stops today," Watson said after Council voted to terminate Cronk. "The outcomes are too important. We as a council want to help our community … begin to hear each other and maybe even trust each other a little more than we did today.”… (LINK TO FULL STORY)

Chamber partnership looks to strengthen connection to startup community (Austin MOnitor)

The Austin Chamber of Commerce has extended its reach to become directly involved with launching startups in the city, bringing the business incubator Founder Institute Austin into its offices downtown. The one-year pilot program allows the institute, which has chapters in 200 cities and 100 countries, to hold in-person courses in Austin for the first time since before the Covid-19 pandemic in 2020.

Approximately 30 hopeful entrepreneurs were slated to be in the spring cohort that started Feb. 8, learning about product development, fundraising, business scaling, and more over a three-month semester. The chamber and its Opportunity Austin arm will lend its resources and network to the program participants with the hope that those connections will encourage graduates to keep their growing companies in the area and strengthen the local economy.

While Austin was Founder Institute’s first Texas chapter upon its opening in 2017, it has since expanded into Dallas and Houston. Since the parent organization was founded, it has assisted in the formation of more than 6,500 startups around the globe… (LINK TO FULL STORY)

[TEXAS]

‘Red’ McCombs, San Antonio business and Spurs icon, dies at 95 (San Antonio Express-News)

B.J. “Red” McCombs, a self-described “car peddler” who built an empire that included auto dealerships, communications, sports teams, oil and gas exploration, real estate and ranching, has died. He died Sunday at home, his family said, “surrounded by loved ones.” He was 95. “We mourn the loss of a Texas icon,” the family said in a statement. “Red was a visionary entrepreneur who touched many lives and impacted our community in immeasurable ways.” Known by his nickname — and sometimes “Big Red,” as the writer James Michener once noted — McCombs was quintessentially Texan. Always colorful and with a booming voice, the tall, blustery optimist moved easily between the worlds of cars, sports and business.

A child of the Depression, he became a billionaire, one of three from San Antonio included on the 2022 Forbes list of richest people in the world. The ranking put his net worth at $1.7 billion. McCombs made a lot of money but gave a lot away, too. A $50 million donation in 2000 made him the namesake of the McCombs School of Business at the University of Texas at Austin. It was the largest single donation in the university’s history. In 2005, McCombs and his wife Charline gave $30 million to the University of Texas M.D. Anderson Cancer Center in Houston. The largest gift the institution had received for cancer research fueled the creation of the Red and Charline McCombs Institute for the Early Detection and Treatment of Cancer. McCombs said he made the unsolicited donation because of the way cancer affects a family, not just the patient. “There’s never been a predator like cancer,” he told Hearst Newspapers. “It’s the great thief crossing our borders, robbing Texas of its precious assets. We want to see M.D. Anderson’s slogan of ‘Making Cancer History’ become a reality.” One of his daughters, Marsha McCombs Shields, was treated at M.D. Anderson. The McCombs family and the McCombs Foundation — the family’s primary philanthropy arm — have contributed more than $135 million since 1981 to civic causes in San Antonio and across Texas, according to McCombs Enterprises… (LINK TO FULL STORY)

Dallas considers tenant-friendly eviction ordinance while state lawmakers push to ban it (Dallas MOrning News)

The city of Dallas is hosting its last public meeting Tuesday to consider input on a draft of a permanent eviction ordinance, an effort that could be stopped by the Legislature if a bill passes that bans cities from enacting rules related to evictions. The Dallas City Council repealed a tenant-friendly eviction ordinance in November that was tied to COVID-19 and replaced it with a less-restrictive, temporary ordinance until permanent procedures could be adopted after community input. The proposed permanent ordinance is closely related to the temporary one in that it still requires landlords to give a notice of a proposed eviction before giving tenants a notice to vacate. But the proposed ordinance also requires property owners give tenants an opportunity to “cure” the breaches of their lease — meaning tenants would get time to communicate with their landlord and pay rent, back-rent and fees before the landlord could begin the eviction process.

By passing the local ordinance that extends beyond state law, Dallas will “create a cascade of unintended consequences,” said Jason Simon, the director of government affairs for the Apartment Association of Greater Dallas. “From a practical and operational standpoint, the ordinance will create additional complexity to the patchwork regulations that vary from city to city — a situation where a property on one street could have different regulations than a property the next street over,” Simon said. “That’s why the State of Texas governs the eviction process through the Texas Property Code, which ensures that procedures are balanced, fair, and equally and consistently applied statewide. House Bill 2035, filed by Rep. Shelby Slawson, R-Stephenville, and its companion Senate Bill 986, filed by Sen. Brandon Creighton, R-Conroe, would make it illegal for local governments to adopt or enforce an ordinance that prohibits, restricts or delays a property owner’s delivery of a notice to vacate or filing of an eviction suit… (LINK TO FULL STORY)

[NATION]

Trump’s White House accomplishments aren’t so easy to sell on the campaign trail (politico)

Donald Trump faces a dilemma just months into his third run for president: Two of his most important achievements from the White House have become politically complicated or just plain too hot to touch. Operation Warp Speed, the public-private partnership that developed a coronavirus vaccine in record time and which Trump once called a “miracle,” has become vilified among a group of conservatives. And the toppling of Roe v. Wade by Trump-appointed Supreme Court justices has turned into a political Rorschach test for Republicans, with one camp seeing it as a boost at the ballot box and the other fearing it is a hindrance. The tension over how and whether or not to lean into vaccines or abortion has been on display since Trump kicked off his presidential campaign. Elsewhere, Trump has praised the anti-abortion movement and his role in picking conservative justices, but has also criticized some leaders in that movement for not doing enough in the 2022 midterm election.

He has also said the issue was “poorly handled” by Republicans, pointing to members and candidates who advocated for no exceptions to bans on abortion. Trump’s team believes that he can thread the needle between touting the work he did in facilitating the end of Roe while staying on the popular side of public opinion about abortion restrictions. “Especially in the primary, it’s a very strong talking point for the president. He’s got a good record, and he’s on good ground going into the primary and general election,” said John McLaughlin, a Republican pollster who advises Trump. “His position since he ran for office and since he was in office has been consistent.” But navigating those twin achievements from his time in office could become tricky to handle over the course of a potential primary and general election run. Trump has begun taking steps to try and maneuver that political landscape. At the Council for National Policy summit last weekend at Trump Doral in Miami, he called in to praise the group’s work promoting conservative policies and touted his anti-abortion legacy, according to a recording of the call shared with POLITICO. The call came amid reports that evangelicals and pro-life leaders have been keeping their options open going into the 2024 Republican primary… (LINK TO FULL STORY)

Office Landlord Defaults Are Escalating as Lenders Brace for More Distress (Wall Street Journal)

The number of big office landlords defaulting on their loans is on the rise, fresh evidence that more developers believe that remote and hybrid work habits have permanently impaired the office market. 

The giant investment manager Brookfield Asset Management recently defaulted on a total of over $750 million in debt for a pair of 52-story towers in Los Angeles, according to a February securities filing. Real-estate firm RXR is in talks with creditors to restructure debt on 61 Broadway, a 34-story tower in Manhattan’s financial district, according to people familiar with the matter. Handing over the building to the lender is among the options under consideration, these people said. 

In another sign of distress, a venture of an investment manager affiliated with Related Cos. and BentallGreenOak is in similar debt-restructuring talks over a $150 million warehouse-to-office conversion project in Long Island City, N.Y., that hasn’t filled up as much space as expected, according to people familiar with the matter. 

Five to 10 office towers each month join the list of properties at risk of defaulting because of low occupancy, expiring leases or maturing debt that would have to be refinanced at a higher rate, according to Manus Clancy, senior managing director with data firm Trepp Inc.

Concerns over the health of the office building industry have mounted throughout the pandemic. The weak return-to-office rate has led to soaring vacancy levels in many cities. Last year’s spike in interest rates increased the cost of buying and refinancing properties and squeezed property values.

Until now, most landlords have been able to stay current on their mortgages because office leases typically run for 10 years or more and lenders have been willing to extend expiring mortgages… (LINK TO FULL STORY)

AJ Bingham
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