Real estate proposed for new homeless shelter is pricey

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The Austin City Council on Thursday is expected to consider spending as much as $8.6 million — nearly 2 ½ times the assessed value — for a South Austin property to house the city’s first homeless shelter outside of downtown.

The 1.6 acres with a 24,365-square-foot office building at 1112 W. Ben White Blvd. has an assessed value of $3.56 million, according to the latest figures from the Travis County Appraisal District.

The property is owned by Alma Tierra Ventures, LLC, whose registered agent is Gustavo Artaza, according to records kept by the Texas Secretary of State.

The council in January approved searching for a site to establish a shelter with 100 beds for a program to house and prepare the homeless for more permanent housing. The program is expected to cost $2.5 million a year.

The Alma Tierra building would have to be renovated, but the city’s Office of Real Estate Services has not estimated what those changes would cost.

The property “is an ideal location given the proximity to areas where individuals who are experiencing homelessness live, accessible by public transportation, close to major arterials, and within a reasonable distance of health care facilities,” the Office of Real Estate Services said in a report to the council.

Neighbors in the area of the property have already expressed concerns about a shelter for the homeless, particularly because there is an elementary school nearby.

Contacted by The Texas Monitor on Tuesday, spokesman Andy Tate said the city engaged an independent third party to determine the market value of the property.

“The city cannot pay more than fair market value, and a third party is completing an appraisal to determine this,” Tate said in an email. “The $8.6 million mentioned on the council agenda is the ‘not-to-exceed’ amount, to include property, closing and other costs. The tax assessed value is not always the best indicator of a property’s fair market value.”

However, when the council approved a resolution by members Greg Casar, Ann Kitchen and Leslie Pool, the directive was for Real Estate Services to assess five properties the city already owns and recommend one of them for the city’s second homeless shelter.

The Texas Monitor contacted most of the city council members, including Casar, Kitchen and Pool, to ask about the purchase price and why a city-owned property was not recommended. None responded to the inquiries, nor did a city staff spokesperson.

The council’s consideration of the property purchase comes in advance of a report from City Manager Spencer Cronk on what kind of services a South Austin location would provide. Because the report has been delayed, the shelter — wherever it’s located — will not open by the end of September as the council had hoped.

The city, its advisory Downtown Commission, and downtown business groups have struggled with how to deal with a steadily increasing homeless population — up five percent over last year, according to a periodic survey done this spring by the Ending Homelessness Coalition. The problem has outstripped the ability of the nonprofit contractor, Front Steps, to keep up with at the Austin Resource Center for the Homeless, 700 E. Seventh St.

In its 2019 budget, the council increased the annual funding for homelessness programs by 13.1 percent, from $26 million to $29.4 million. At the same time, the council began looking for a second homeless shelter site.

“As a council and as a city, we set homelessness as our first priority,” Mayor Steve Adler said.

In February the council approved hiring a new homelessness strategist to act as liaison to the welter of city and nonprofit programs that assist the homeless, although that position has yet to be filled.

In May the Downtown Commission recommended that the city council approve three new homeless shelters, all of them outside of downtown.

Earlier this month, in approving a South Austin location, Kitchen said the new shelter would limit beds and emphasize efforts to connect the homeless to permanent housing more quickly.

At the same time, a bloc of council members — Casar, Delia Garza, Natasha Harper-Madison and Pio Renteria — has asked that the city repeal most or all of its ordinances that criminalize homeless behaviors like panhandling and squatting on public sidewalks and highway underpasses.

While the ordinances have the support of the Austin and University of Texas police departments and downtown businesses, the city auditor as early as November 2017 questioned the ordinances’ effectiveness and legality.

There is a growing body of national research supporting the auditor’s conclusion that ticketing or arresting the homeless adds a second societal cost without solving the problem.

Mark Lisheron can be reached at [email protected].

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