Judge blocks Austin's plan to use tax revenue to help redevelop former Statesman site

AUSTIN (Talk1370.com) -- The City of Austin's plan to create a Tax Increment Reinvestment Zone for a 118-acre site on the south shores of Lady Bird Lake has been stopped in its tracks by a Travis County judge.

Travis County District Judge Jessica Mangrum on Friday ruled in favor of plaintiffs who sued the city last year, claiming the city's plan to create a TIRZ for redevelopment of the South Central Waterfront District was illegal under state law.

Bill Bunch, Bill Aleshire, and Fred Lewis represented the plaintiffs in the lawsuit against the city.

Austin City Council members voted to approve the TIRZ for the waterfront district, which includes 19 acres of the former Austin American-Statesman facility at 305 South Congress Avenue, in December 2022. The property backs up to the lake and the Butler Hike & Bike Trail.

The TIRZ, as proposed, would have redirected $354 million in property taxes over 19 years to help pay for infrastructure projects within the development. Plaintiffs argued that, under state law, the city must show the TIRZ was for an area that was "unproductive, underdeveloped, or blighted" and "would not otherwise develop on their own" without taxpayer investment.

"The city is legally required to show that the land is blighted and would not develop without public subsidies," Bunch said in a release. "The City failed to present any evidence that public funds were needed for the land to develop.”

"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," the City of Austin 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."