Texas Facilities Commission will part curtain on public-private partnerships

Austin American Statesman
September 19, 2012
By Laylan Copelin

The Texas Facilities Commission on Wednesday unanimously voted to implement a faster, more transparent process for considering unsolicited proposals from the private sector to develop state lands.

The change comes a year after the commission approved its guidelines for public-private partnerships — but only weeks after one of the first projects in Austin stirred public opposition to the process as much as the developer's proposal.

Private-public partnerships — or P3s, as they're called — are being touted as a way for governments to finance improvements, pay for services or raise money.

Under the new procedure, the Facilities Commission's staff would notify the public within 10 days of receiving a proposal that meets its minimum standards. That public notification also would start the clock for other developers to submit competing proposals for the same parcel of state land.

Before the change in the guidelines, a developer's idea might have been under confidential review by the state staff for weeks before the commission's public vote authorizing the next level of review. Under the old rules, the identity of the project, the developer or other basic details were not revealed until after the public vote.

Aundre Dukes, the commission staffer in charge of public-private partnerships, said the new procedure could cut three to four months from the front end of the process without compromising the time necessary for a more detailed investigation of competing proposals.

"We're not endorsing anything (with the public notification)," said Terry Keel, the commission's executive director. "We just want to get the ideas out."

In the case of 75 acres of state-owned land along Bull Creek Road in Central Austin, details of a developer's proposal leaked out, raising concerns from neighborhood associations that the project would be fast-tracked before residents had their say.

The developer, Stratus Properties, finally volunteered that the company had proposed a mixed-use project with residences, offices and shops, including an H-E-B grocery store. The commission has not yet acted on that proposal.

"We should put these (proposals) out here as soon as possible and we could forestall all the transparency issues," Keel told his seven commissioners.

The commissioners — who are appointed by the governor, lieutenant governor and House speaker — manage most of the state's buildings, including the state complex of offices surrounding the Capitol.

The idea for a faster, more transparent start to the P3 approval process arose after three commissioners and three staffers visited their counterparts in Virginia. The Texas law creating a formal P3 process is modeled on the Virginia model.

At Wednesday's hearing, Commissioners William Derek Darby and Brant Ince pushed for notifying the public sooner instead of later in the process.

"The most important thing to remember, this is a posting," Ince said. "This is not accepting, considering or approving" a proposal.

"We're not trying to fast-track anything," Darby said. "It's about how soon it gets in the public arena."

He said posting the existence of a developer's proposal would avoid "newspaper stories and rumors" about what the agency might be considering.

Darby said he liked an analogy from a Virginia official who said, "We throw it in the drawer during the posting process."

In other words, Darby said, he doesn't want to spend a lot of staff time on an idea until all of the competing proposals are submitted for comparison.

Commissioner Doug Hartman said a public posting would initiate lots of reaction. "You'll have to deal with public feedback and there will be a lot," he said.

Dukes predicted that public reaction would lessen as people become familiar with the process.

Commissioner Alvin Shaw said the rest of the state seems "immune" from the concerns expressed by Austinites.

"It seems the state doesn't get caught up in that like the city of Austin does," he said. "Some of our concern (about public reaction) might be overblown."

State Rep. Elliott Naishtat, D-Austin, whose district includes the Bull Creek property, said he welcomed Wednesday's vote. "I'm all for it if there is serious talk and policy related to more transparency and an opportunity for meaningful input from the neighborhoods," he said.

Sara Speights is one of the Bull Creek area residents who was talking Wednesday with Capitol staffers, from the speaker's office to the Sunset Commission, which will recommend to the Legislature whether to continue the Facilities Commission.

"It appears they were all aware that there has been a problem with transparency," she said.

Speights praised Wednesday's vote as a good step but remains concerned that a developer who is constructing a commercial project on state land should have his project subject to local zoning and review.

Keel has argued that the state cannot constitutionally allow a city or county to stop or change a state-authorized project.

Brett Findley, president of the Texas P3 Association, said the group supports greater transparency.

"Any time you can improve transparency, that's a good thing, so everybody gets a chance to compete," he said. "But we all have to remember it costs a lot of money to put these deals together and the state should respect that."

Keel said he didn't believe Wednesday's change would hamper the state in getting proposals from the private sector: "The only people who are going to participate are well-heeled risk takers."