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Project Connect and Uncertainty

Project Connect and Uncertainty

Project Connect and Uncertainty 150 150 Voices of Austin

By Barbara Cilley

There is an ancient saying, “All roads lead to Rome”. This could equally apply to Project Connect, “All roads lead to the Central Business District (CBD)”. The bottom line for Project Connect is that it is a CBD-centered plan. It clearly envisions a future where employment in Austin is centrally based. There are three basic drivers that give life to downtown planning: office tower employment, tourism/conventions, and people who live in downtown condos. Each of these basic segments of the CBD is under intense pressure and the fundamentals of how and when they revive is very uncertain.

The office segment is clearly affected by the work-at-home scenario many of us are experiencing. How widespread is it and how permanent is it in Austin? According to U.S. Census Bureau American Community Survey, Austin/Round Rock had 8.1 % working-at-home in 2018. Fast forward to the present, in a survey done recently for the Central Texas Regional Mobility Authority (CTRMA) to determine the viability of their toll revenues they found the following: “65% of respondents believe they will work from home at least some of the time post-COVID.” The survey goes on to further conclude: “Once that COVID is no longer a threat, about 25% expect to work from home 4 days a week or more…”  Finally the study shows fully 5% of respondents will never use transit again!

It is not hard to conclude that many businesses having discovered that it is viable to have a work force at home and as a result are going to want to cut expensive downtown office leases. Employees forgo the commute and businesses save on the bottom line, a match made in heaven. Technology is incentivized to provide even better tools to make this happen using cloud computing, the promise of 5G wireless technology, and innovative software. The long-term trend of separating geography from the workplace just got accelerated on steroids in the post pandemic period and with the technology base in Austin we are likely to be one of the epicenters of this phenomena.

The second leg of the triangle for downtown is tourism/conventions. While our local tourism will not follow the same trajectory as office space, it would take a crystal ball to know how and when Pre-Corvid activity levels will occur. Recently, Disney just announced that it is laying off 28,000 employees. Bloomberg News in an analysis of this event concluded the following: “Park earnings might not return to last year’s levels until 2024, says researcher MoffettNathanson.” I hope this is not true but the implications for a robust recovery for tourism in the near future for Austin does not look good.

The last element for the CBD plan is downtown living. The problem of homelessness is most visible in the downtown core. The cumulative results of our national, state, and local housing policies are vividly represented by homeless encampments that are taking on an air of being semi-permanent in a location where rents for small spaces are routinely over $2,000 per month.  The cultural amenities represented by the clubs, restaurants, and music is not readily available and the future horizon for them being fully available is very uncertain. None of these factors add up into a desirable location for high dollars tenants.

The downtown tunnel with a multi-billion price tag is at the heart of this plan. We don’t really know the cost of the tunnel because there are no preliminary engineering studies and the only direct experience we have with the tunnels in the downtown area signals cost overruns. The Waller Creek tunnel is a clear example of this. This plan has so many elements that are subject to failure that it is hard to understand why we are gambling Austin’s future on them.

Disney (DIS) Layoffs Are Warning to Tourism Industry During Coronavirus Pandemic – Bloomberg

CTRMA_Board_Presentation Meeting September 30, 2020

Barbara Cilley is an advisor and friend of Voices of Austin. Barbara has served on numerous City of Austin and Travis County boards and commissions. Barbara has a Master’s of Science in Community and Regional Planning.