Developers = Deception

On November 11th, 2008, Uniformed Texas wrote a blog describing the recently voted upon Proposition 2. Tax subsidies regulation for developers would be created if Proposition 2 was passed. This all came to light because of the development of the Domain, a modern shopping center.

What took part in the formation of the Domain? A foreign developer approached the city of Austin with a proposal, I can only describe as, utopian. All projections equaled benefits for Austin, money and growth. They promised space, jobs, and affordability. The developer was really a wolf in sheep's clothing. All the calculations were exaggerated. The developer promised the City of Austin would only have to pay a little over 37 million dollars, when they ended up having to pay over 64 million. They said they would utilize over 4 acres of land, when they only used 1.4 acres. And finally, they vowed the retail jobs would average a salary of 35 thousand dollars a year, when the average salary is only 22 thousand dollars a year. The deception is overwhelming. Yes, there was growth for the city, but not even close to the claims of this developer who took advantage of our city. The rich continued to get richer, while the City of Austin developed a fiscal nightmare.

The City Council only deliberated for a week and approved the proposal. They failed to educate Austinites of the possibility of a mini mall going up. I believe if Austin residents were aware of the dirty deal about to go down, they would have protested. At the very least they would have asked questions and might have gotten the City Council to evaluate the figures the developer was proposing.

Uniformed Texan spoke of how, "the proposition would also force the city to break contracts already made with developers in the middle of projects. The resulting lawsuits and legal fees would have to be absorbed by the tax payer." When, "the legal fees they say we’re going to suffer -- we have a compromise agreement that says the city can walk away at anytime with no recourse and no damages so the fact is there is no grounds for a law suite."

Honestly, I can not place sole blame on the developer. I think they were aware of their deception, but the City of Austin did not verify their projections before approving the proposal. Unfortunately, Proposition 2 failed and the city will still be able to make payments to the Domain and offer tax incentives to future projects containing retail. I think Austin should have learned from its first mistake. But instead, they are going to continue to be taken advantage of at the tax payers expense.