The Austin City Council voted Monday night to make a $150,000 grant application to the state on behalf of Cooperative Response Center, but postponed the public hearing on the business subsidy agreement with the call center.

Tuesday, June 20, 2000

The Austin City Council voted Monday night to make a $150,000 grant application to the state on behalf of Cooperative Response Center, but postponed the public hearing on the business subsidy agreement with the call center.

The delay was not because of any disagreement with the business, which will relocate its headquarters to Austin from near Brownsdale, it was to give private-sector attorneys time to peruse the city’s documents. In particular, the attorneys for the Washington, D.C., bank lending CRC $1.05 million of the estimated $1.4 million building budget wanted more time.

In return for the state loan and a $200,000 loan from the city directly, CRC must fulfill several conditions, including the creation of 25 full-time equivalent positions in addition to retaining the 52 existing positions, as well as a minimum wage of between $8.40 and $8.90. CRC will be obliged to pay back both loans at an interest rate of 2 percent. After both loans are repaid, the city would be allowed to keep $100,000 of the state loan to use for future economic development projects.

Because the second public hearing was delayed, the city Port Authority meeting originally scheduled for Wednesday also was postponed, probably until the second week in July. The Port Authority was to have concluded the land deal with the CRC at that meeting.

CRC will be the first business to benefit from the city’s most recent tax increment financing district. That means the business will pay little or nothing up front for either the land or the infrastructure; however, those costs will be taken out of the company’s property taxes for up to 25 years.

Councilman Dick Lang was the only negative vote on the CRC grant request.

"Does anyone ever look at how much it costs to give these grants to businesses, this property?" Lang said. "This is not by any means free."

Lang has objected to the tax increment financing offered to CRC from the beginning, largely because he considers the location just north of 18th Avenue NE prime commercial property.

City Administrator Pat McGarvey said the city expects to hear from the state Department of Trade and Economic Development on the fate of the $150,000 state grant. Once the grant is approved, the council will have to formally approve the loan agreement with CRC.