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M E M O R A N D U M

TO: Austin City Council Members & City Manager

FROM: Theresa Alvarez, CEO & President

Austin Economic Development Corporation

DATE: February 15, 2023

SUBJECT: Annual Update from Austin Economic Development Corporation

_____________________________________________________________________________________

On behalf of the Austin Economic Development Corporation (AEDC), please accept the 2022 annual report

as required by Interlocal Agreement with the City of Austin, executed August 25, 2021. The City of Austin

created the Austin Economic Development Corporation, a local government corporation that would

support the City as a public real estate developer, to address increasing pressures of rising real estate

prices on affordability, equity, and the City’s iconic venues/small businesses. In this memo you will find an

overview of our refined board governance, staff development, project accomplishments and a financial

overview for AEDC’s 2021-2022 fiscal year (FY22). Since AEDC’s creation by Council in December 2020,

and having added three full time staff members by February 2022, this has been the first fully operational

year in the organization’s history, and much has been accomplished!

AEDC’s year was spent setting up the operational/financial infrastructure, advancing initial projects,

adjusting budgets/projections, exploring new opportunities and strategic planning for the long-term

success of the organization. The AEDC board and staff worked diligently to set up effective board

committees and internal policies and procedures. The AEDC staff also invested time benchmarking with

peer EDC’s across the country, discussing best practices, which has been valuable in determining the

structure for future initiatives and potential revenue for the AEDC.

While simultaneously working on advancing projects, significant time was spent working on the vision,

mission, equity statements and a decision-making matrix to determine future projects. We are excited to

share the outcome of the AEDC strategic planning work and look forward to discussing with Council and

City Manager.

In the financial section below, you will find more details about our financial position and the audit

requirements. As a start-up organization, we invested time understanding the initial organizational

financial projections created by consultants in 2020 and had to significantly amend them to reflect current

reality and near-term expectations. There are proven models of how EDC’s can deliver community

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benefits and be fiscally sustainable, but it will require further investment on behalf of the City in the near- term to solidify the organization’s operating capacity and by trusting public real estate assets to the

corporation. The AEDC needs time to complete successful projects so that interlocal agreements can be

executed with other public entities, which will eventually diversify revenue.

Board Governance

AEDC is governed by twenty-one board members who are nominated by their respective nominating

bodies (each seat representing a key expertise) and approved by Council. A full list of board members and

their bios is attached for reference. Council approved the nominees to the first full board of AEDC in March

2021 (Resolution 20210325-026). In March 2022, officers were elected to lead the following committees.

The FY22 executive committee included the following seven board members:

Committee: Led by: Nominating Body

Executive Committee Board Chair, David Steinwedell Urban Land Institute

Strategic Planning Vice Chair, Carl Settles Arts Commission

Finance Committee Treasurer, Tina Cannon DECA

Governance Secretary, Xavier Pena Downtown Alliance

Diversity, Equity, and Inclusion Dr. Suchitra Gururaj University of Texas

Real Estate Committee Matias Segura Austin ISD

Past President Rosie Truelove City of Austin

AEDC board members are regular participants on project-based committees such as the Cultural Trust

Advisory Committee and the Urban Renewal Partnership Working Group.

2023 AEDC Board Renewals/Nominees include:

Renewals:

 David Steinwedell, Urban Land Institute (ULI)

 Tina Cannon, Diversity & Ethnic Chamber Alliance (DECA)

 Sharmila Mukherjee, Capital Metro

 Jeremy Martin, Greater Austin Chamber of Commerce

New Nominee:

 Brad Stein, Real Estate Council of Austin (RECA)

Staff Development

AEDC currently consists of a four person, highly skilled staff with the support of seven professional

development contracts:

 Theresa Alvarez, President and Chief Executive Officer (February 2022)

 David Colligan, Chief Operating Officer (February 2022)

 Anne Gatling Haynes, Chief Transactions Officer (September 2021)

 Fred Evins, Senior Project Manager (September 2022)

The following professional development contracts are under the management of AEDC:

 Legal: Winstead PC

 Financial: Virtual Chief Financial Officer

(VCFO)

 Community Engagement: Public City

 CPA: Montemayor, Britton, Bender PC

 Banking: Frost Bank

 Bookkeeping: Economic Growth

Business Incubator (EGBI)

 Strategic Planning: HR&A

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Project Update

AEDC reports progress on the Cultural Trust, E. 11th blocks 16 & 18 and I-35 Connecting Equitably projects,

with the support of the City of Austin Economic Development (EDD), Housing and Planning (HPD) and the

Corridor departments. We have worked closely with other City departments and commissions including

Finance, Equity, Parks, Strategic Facilities, Urban Renewal Board, Arts Commission, Music Commission and

the South Central Waterfront Advisory Board.

Project Name Description Achievements

Cultural Trust AEDC is administering a new program for

the City of Austin, to identify projects that

preserve existing venues while facilitating

the development of new affordable spaces

for creation, innovation, practice, and

exhibition/ performance.

 Request for Proposals closed March 31, 2022

with 45 applicants

 Evaluation and identification of 14 projects

advanced to Feasibility Phase on June 30, 2022

 City Council approved first 2 Bond funded

projects on Dec. 8, 2022

Urban Renewal

Plan-East 11th

Street Blocks 16

& 18

Aligned with the principles and goals of the

African American Cultural Heritage District,

and the Urban Renewal Plan, AEDC is

facilitating the disposition of two parcels

into signature mixed-use developments.

 Held 6 community engagement conversations to

review, validate and prioritize community goals

 Assessed development potential of 2 blocks

through 4 scenarios, and reviewed market

feasibility of the various options

Equitable

Development

Strategy for Our

Future 35 project

Coordinating with the City of Austin’s

primary consulting team, AEDC is identifying

and developing implementation strategies

for projects for future development on the

‘caps ‘ along the corridor of the I-35

expansion.

 Engaged planning and economic feasibility team.

 Initiated work to define equitable development

for this project with Stakeholder Group

organized by the Corridor Office

 Coordinating with lead consulting team on

strategy for the caps and stitches

South Central

Waterfront

TIRZ Management; Leveraging public-private

partnerships, tools and programs in the

redevelopment of this 118-acre area to

realize a vision of accessible economic and

community benefits over next 20 years.

The scope is being defined as the TIRZ district Final

Project Plan is written.

 Benchmarking TIRZ management structure

and practices

 Met monthly with SCWAB chair

 CEO presented to SCWAB Aug. 15, 2023

Financial Overview

As required in the interlocal agreement, a full audit and 5-year projections are required for the annual

report. A full audit was conducted for the fiscal year ending September 30, 2022 (FY22). We are pleased

to report a clean audit and more realistic projections. See both attached for your review.

The initial 2020 financial projections for the AEDC were overstated and based on theoretical

program/project initiatives that would yield revenue sooner than what was actually feasible. With the

inaugural staff, much time has been spent to modify the budget to reflect current conditions. Donations,

bond issuance fees and transactions fees were projected revenue that could not come to fruition in FY22.

Due to Covid delays, IRS didn’t approve the AEDC’s 501c3 request in 2022. Even if IRS had approved the

request, philanthropic investments take time to build relationships with potential funders and a multi- year balance sheet and a track record of success is required. In the projections, you will find AEDC plans

to assemble a diversified revenue structure, including philanthropic donations with aggressive doubling

in the first 4 years. The 2020 assumptions also assumed that AEDC would immediately issue bonds,

without a ready pipeline of projects for which to issue bonds, and that AEDC would be conveyed public