The Future of Dog’s Head Development Sits in the Hands of City Council

If you’re reading this on Thursday morning, July 23, a determined group of your neighbors are at City Hall, demanding that City Council kill or delay the Dog’s Head deal by rejecting the Tax Increment Reinvestment Zone which is a necessary part of the arrangement. And despite the concerns from the community, Council members are, in all likelihood, approving the TIRZ. 

That’s where things seem to be heading following Council’s work session on Tuesday, which examined the Dog’s Head deal approved in May to create a city within the city on 4 square miles of mostly undeveloped land east of town, along the banks of the Colorado River. The major revelation to come from the work session was the identity of the Fortune 100 company that the Endeavor Real Estate Group, the development company spearheading the plan, has said will be the project’s first tenant. That tenant is Amazon. The company is considering the creation of a robotics manufacturing facility on the site. 

The revelation, if it was one for them, visibly pleased some Council members. CM Krista Laine pointed out that she mentors students in robotics at local schools and that they would be excited to visit the facility. Mayor Kirk Watson said the fact that the heretofore secret tenant is Amazon “sends a message about what could happen out there.”

But the idea of having Amazon just across the river from the Tesla Gigafactory displeased environmentalists and Dog’s Head residents, who have worked furiously since learning of the deal to convince Council to reject it or at least slow it down. 

”We know that Amazon is very much connected with the Department of Defense and its AI,” said Susana Almanza of the environmental justice group PODER at a protest outside City Hall after the announcement. “And we know the devastation that is being caused throughout the world because of the use of robotics, the use of AI. So to me, when I saw that [Amazon’s owner] Jeff Bezos, a billionaire, will now be neighbors with Elon Musk, it was very saddening to me.”

Almanza was one of 20 people who spoke at the work session to urge Council to reject the TIRZ, which would speed up the Dog’s Head development by redirecting a large percentage of the property and sales taxes collected in the area over the next 45 years to Endeavor, to reimburse the company for the millions of dollars of infrastructure they have promised to build. If Council rejects the TIRZ, Endeavor is expected to walk away from the agreement, disannex Dog’s Head from the city, and develop a different kind of project under Travis County’s less-stringent development rules, rather than the manufacturing, entertainment, and multifamily housing hub that its representatives have said they would prefer to create. 

The city’s preliminary concept plan for the Dog’s Head development Credit: City of Austin

During Tuesday’s comments, several people pointed out that the state law governing Tax Increment Reinvestment Zones has a “but for” clause that requires that the city determine that the land to receive the TIRZ is so blighted that development there “would not occur solely through private investment in the reasonably foreseeable future.” The commenters argued that this is not the case at Dog’s Head. Garrett Tung, who lives in the area, said that homes have been developed without help from public tax money. Bobby Levinski of Save Our Springs elaborated on the “but for” argument at the protest outside City Hall. 

“At this point in time, what we’re seeing is there’s active construction on the site,” Levinski said. “Amazon just announced it’s going to the site without these tax subsidies in place. Saronic Technologies just invested heavily on the neck of the Dog’s Head without these tax subsidies in place. The City Council recently lost a lawsuit on the Austin American-Statesman property just across the way, where they tried to say that that was a blighted site, that development on the most valuable piece of real estate in the entire city of Austin would not occur without public subsidies. They lost that lawsuit. I think they’re walking into that again.”

At Tuesday’s work session, Kim Olivares of the city’s Financial Services Department addressed the “but for” argument, stating that Council had determined that the area would not be developed anytime soon without the TIRZ. Olivares walked Council through other relevant details, stating that public financing is very common for large-scale projects like Dog’s Head and that the TIRZ is not a public subsidy, because the tax money paid to Endeavor only reimburses the company for creating infrastructure that will be owned by the public. She also assured Council that the city’s agreement with Endeavor specifies that it will not create a bond to reimburse Endeavor for many years to come, after the developer has actually created the taxable infrastructure. 

With a few exceptions, the following discussion with Council members was mostly a celebration of the project. CM Mike Siegel pointed out that the city’s data shows it will only make $300,000 of additional income from Dog’s Head in the first 10 years of the development, and asked Olivares how likely it is that the city will actually lose money on the deal. Olivares said the risk is low. CM José Velásquez asked that the city find alternate routes for the trucks that will bring building materials to the site, to save residents of Dog’s Head from dust and pollution. 

Mayor Watson pointed out that Endeavor plans to provide setbacks from the Colorado River – between 200 and 400 feet – to protect the riparian area. CM Chito Vela made certain that some of the most compelling arguments for Dog’s Head didn’t go unheard. He fears that if the city rejects the deal, Endeavor will build a sprawling suburban development on the site that would have no city transit options and no access for the public to trails along the river.

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