Judge rules against City of Austin over South Central Waterfront funding

On Friday, a Travis County district judge ruled against the City of Austin in a lawsuit filed by a group of Austin property taxpayers in April 2023, saying it "violated the state constitution and statutes" by approving the city to use tax dollars towards the development of the old Austin American Statesman building.

AUSTIN (KXAN) -- On Friday, a Travis County district judge ruled against the City of Austin in an April 2023 lawsuit filed by a group of Austin property taxpayers, saying the city violated state law when it approved the use of some property tax dollars to help redevelop the area south of the river from downtown.

The lawsuit argued city officials shouldn't be allowed to put tax dollars toward the development, which the city calls the South Central Waterfront District. That district includes the property of the old Statesman building. The tax increment reinvestment zone (TIRZ) approved for the area would have diverted $354 million away from the city's general fund over 19 years, court documents said.

A TIRZ is a way for the city to use property taxes from people living in the area to finance projects, like sidewalks and roads.

KXAN has reached out to the City for comment. This article will be updated once a statement is received.

Bill Bunch, one of the attorneys going up against the city, said the judge's decisions means "the $354 million in city property taxes can remain in the city’s general fund and go for real public needs, such as public safety, parks, streets, and other resident needs—and not to subsidize corporate welfare for wealthy, private developers.”

Future properties south of Lady Bird Lake

Back in March, the city asked for community feedback on the future development south of Lady Bird Lake. This could include hotels, apartment buildings and shops.

The South Central Waterfront District includes the old Statesman property, but the Planned Unit Development (PUD) — or guidelines for what that property can be used for — has already been agreed on by Austin City Council.

“When staff initiates the rezoning process, we will suggest rezoning for all parcels within the South Central Waterfront District except for Planned Unit Developments, Planned Development Areas, and Planned Development Agreements,” the city explained on its website.