BG Reads 5.6.2024

🗞️ Bingham Group Reads - May 6, 2024

May 06, 2024

Bingham Group Reads

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4.17.24 // Bingham Group celebrates 7 years in business!

May 6, 2024

Today's BG Reads include:

🟣 With Austin office buildings 20 percent vacant, conversion to housing remains out of reach (Austin Monitor)

🟣 Democrat-backed candidates sweep first Travis County appraisal election (KUT)

🟣 Lost Creek, two other areas of Austin vote to remove themselves from city limits (KUT)

🟣 Air Canada launches new non-stop route between Austin and Montreal (Austin Business Journal)

Read On!

[BINGHAM GROUP]

  • With the upcoming (May 6th) start of Austin's new City Manager T.C. Broadnax, we've put together three memos intended to provide background for organizations with City Hall interests.

  • The first and second memos are reviews of Mr. Broadnax's time as city manager of Dallas and Tacoma, respectively. The information was pulled from news articles from the time. We've provided links where appropriate.

  • The last is a review of the seven city of Dallas budget's Mr. Broadnax spearheaded. This was compiled through review of publicly available budget documents.

  • BG Memo Link - Contact me for general questions or comments. If there are specific business/policy concerns, we’re happy to schedule time to consult -> [email protected].

  • On this episode we welcome back Jack Craver, independent reporter and founder of The Austin Politics Newsletter. Jack and Bingham Group CEO A.J. Bingham discuss the candidate field for the 2024 Austin Mayoral elections, including incumbent Mayor Kirk Watson.

[AUSTIN METRO NEWS]

With Austin office buildings 20 percent vacant, conversion to housing remains out of reach (Austin Monitor)

Two years ago, with the office real estate market in Austin stuck at a 20 percent vacancy rate, Brad Stein took the first of two trips to other markets to see if some of the hundreds of thousands of empty spaces in downtown Austin and areas beyond could be converted into badly needed housing stock. What Stein saw in a 2022 visit to Chicago and another trip to Dallas last year was that housing space and office space are two very different puzzle pieces that don’t fit together without considerable and expensive alterations.

“It’s easy to throw the idea out, to say, oh, we should just do office conversions to residential,” said Stein, president of Intracorp Texas, which has three residential developments in the works in Austin. “I was curious myself, and so I toured an office conversion to a multifamily rental project. … I wanted to see: Is this something that we could do in Austin?”

While those kinds of conversions are feasible and successful in other cities with older office buildings and less demand for new development, which keeps land prices lower than in Central Texas, the reality quickly set in that office-to-residential conversion isn’t likely to take place locally in any major way unless office vacancies rise to 50 percent or higher… (LINK TO FULL STORY)

Democrat-backed candidates sweep first Travis County appraisal election (KUT)

Three candidates backed by the local Democratic Party won seats to the Travis Central Appraisal District’s board of directors, who help manage property appraisals.

Jett Hanna, Shenghao 'Daniel' Wang and Dick Lavine soundly defeated three others backed by the local Republican Party on Saturday, including Matt Mackowiak, chair of the party in Travis County, and Don Zimmerman, a former Austin City Council member.

While the volunteer positions are officially nonpartisan, the local parties helped candidates campaign.

“I look forward to helping all the people of Travis County understand this complicated tax system better and to help make sure the rules are followed to ensure transparency, fairness and ethical behavior,” Hanna, who beat Zimmerman in the Place 1 election, said in an email… (LINK TO FULL STORY)

Global co. in semiconductor industry aims to grow US presence from Austin-area HQ (Austin Business Journal)

A global company that provides tool support for semiconductor fabrication facilities plans to grow its presence in the United States, starting with its domestic headquarters in Buda.

PTW America LLC, a subsidiary of Singapore-based PTW Group, is honing in on the chipmaking boom in the Austin area. PTW — a one-stop shop that helps chipmakers with legacy tools, whether it's service, procurement or manufacturing of replacement pieces — aims to add to a roster of clients that includes Samsung Electronics Co. Ltd., NXP Semiconductors NV and Infineon Technologies AG locally, as well as Texas Instruments Inc. in Dallas and Tower Semiconductor Ltd. in San Antonio, according to general manager Stuart Sack.

Sack, who recently took over as general manager, said the company has aggressive growth plans and may need more space in Buda, where it has been for about two years. That could include adding engineers and sales people, along with clean room space and more refurbishment and assembly line space. PTW's initial plans are to reach about 25 employees in Texas, he said, although it could have 75 to 100 throughout the country in the next five years based on industry growth in other states… (LINK TO FULL STORY)

Air Canada launches new route between Austin and Montreal (Austin Business Journal)

A new international travel option is available to Austinites interested in a non-stop destination from Austin-Bergstrom International Airport.

That's because Air Canada on May 3 began its new route between Austin and Montreal that it announced last fall. The route is seasonal and will run four days a week until October, according to ABIA, connecting Austin's airport with MontrĂ©al-Trudeau International Airport (YUL). Air Canada already operates nonstop flights connecting Austin to Vancouver and Toronto.

The launch of the new international route comes in the wake of recent news that ABIA will lose one of its existing international routes beginning Aug. 5 — a Southwest Airlines flight to Cozumel, Mexico. The loss of that route is part of wider cutbacks at Southwest nationally after the airline recently reported quarterly financial results that came in below Wall Street expectations... (LINK TO FULL STORY)

Lost Creek, two other areas of Austin vote to remove themselves from city limits (KUT)

Three of six neighborhoods near the outskirts of Austin will be removed, or “disannexed,” from the city limits following voter approval in Saturday's election.

That includes Lost Creek in West Austin, the largest of the three; land near Blue Goose Road in Northeast Austin; and a portion of land in River Place in West Austin.

"Disannexing" from the city could mean these areas no longer receive certain services – like fire and police protection. Those services would be provided by the county.

Unofficial, but final results show that 91.29 percent of Lost Creek residents voted in favor of Proposition A to disannex from the city. Just three votes were cast for Proposition C, or the Blue Goose Road area, but all were in favor of disannexing. Proposition F, or the measure to disannex 212 acres of land in River Place in West Austin, had just one vote cast and it was in favor... (LINK TO FULL STORY)

[TEXAS NEWS]

Molly Cook beats state Rep. Jarvis Johnson in special election to fill open Texas Senate seat until January (Texas Tribune)

Emergency room nurse Molly Cook will serve out the remaining months of John Whitmire’s term in the Texas Senate after defeating state Rep. Jarvis Johnson in a special election Saturday, according to unofficial returns.

With all precincts reporting, Cook led with 57% to Johnson’s 43%. She declared victory in a statement shortly after 10 p.m.

The win means Cook will represent Senate District 15 through the end of the year, making her the first person other than Whitmire to hold the seat since 1983. The post has been vacant since January, when Whitmire resigned to be sworn in as Houston mayor.

The outcome marked a sharp reversal from the March 5 primary, in which Johnson, Cook and four other Democrats squared off for a full term that will start when the Legislature reconvenes for its next regular session in January 2025… (LINK TO FULL STORY)

With indictment, U.S. Rep. Henry Cuellar’s deep South Texas ties will again be tested (Texas Tribune)

When federal agents raided the home and offices of U.S. Rep. Henry Cuellar, D-Laredo, just weeks before a competitive primary election in 2022, Democrats rallied behind him and he went on to secure another term in office. Now facing charges of bribery and money laundering, he might need them to do the same.

Friday’s indictment threw a wrench in Cuellar and his party’s South Texas plans for 2024, a year in which he had been expected to cruise to reelection. He immediately declared he’s still running for reelection. But now there are calls from Republicans for him to resign and expressions of frustration from progressives who felt Democratic Party leaders shouldn’t have stuck with him when the first hints of legal trouble emerged two years ago.

Meanwhile, allies in his South Texas district, including some top local leaders, remain stalwart in their support of Cuellar. Some are referring to a familiar refrain: "Innocent until proven guilty."

"Anyone can charge you with anything, it doesn't necessarily mean that it's a fact," said Starr County Judge Eloy Vera, who added that he didn't think the allegations would hurt Cuellar's chances at reelection in November… (LINK TO FULL STORY)

[NATIONAL/WORLD NEWS]

Services sector cools as consumers pull back, putting rate cuts back on the table (Wall Street Journal)

Evidence is stacking up that the U.S. economy has slowed, led by the formerly red-hot services sector. Yet overall activity levels remain healthy, and some cooling is welcome news to investors because it opens the door back up to possible rate cuts by the Federal Reserve. The most obvious indicator was Friday’s employment report, which showed the economy added 175,000 jobs in April, down significantly from 315,000 in March. Particularly notable was the shift to just 5,000 jobs being added in the leisure and hospitality sector compared with 53,000 in March.

This is consistent with earnings reports over the past week from food-services providers including Starbucks and McDonald’s, which both cited growing caution among consumers. Even Kraft Heinz said out-of-home venues such as restaurants are buying less from it. “The consumer is certainly being very discriminating in how they spend their dollar. And the inflation that has occurred over the last couple of years in the U.S., I think, has certainly created that environment,” McDonald’s Chief Executive Christopher Kempczinski told analysts on a conference call on Tuesday.

Starbucks, for its part, reported a 3% decline in North American comparable-store sales in the first quarter which, along with weakness in China, prompted a 15.9% plunge in its stock price. Also on Friday, a monthly survey by the Institute for Supply Management showed services-sector activity dipping into contractionary territory in April for the first time in 15 months. “The composition of the report was weak, as the employment, new orders, and business activity components all declined,” Goldman Sachs economists said in a note… (LINK TO FULL STORY)

[2024 Austin City Council Race Watch]

This fall will see elections for the following Council Districts 2, 4, 6, 7, 10, and Mayor.

Declared candidates so far are:

Mayor

District 2

District 4

d

District 6

District 7 (Open seat)

District 10 (Open seat)

_________________________

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