Credit crunch hitting Austin developers

AUSTIN, Texas (KXAN) -- Developers are digging for ways to keep Wall Street's woes from dropping the hammer on future projects. Once developers get approval for a site plan in Austin, they have three years to break ground.

Those developers are saying with the state of the country's banking system, there may not be the money to keep Austin on the move unless the Austin City Council makes some concessions. They asked the city to extend the time period to five years, so developers can get their finances in order.

"Since last April, money flowed in the streets and today there's not any money flowing," said land planner Paul Linehan. "There is a credit crunch."

Linehan said developers are having a hard time getting people into the buildings they have already constructed. They said if forced to break ground quickly in order to keep a site plan approved, Austin could end up as a city full of empty buildings and bankrupt builders.

"This is a situation where you don't want to start building a new building just because your site plan is going to expire," said Linehan.

Activists with the Save Our Springs Alliance call the extension unnecessary.

"We want to encourage projects that are really ready to go to be the ones that are taking up our time," said neighborhood activist Bill Bunch.

Bunch said extending the time period builders have to get started will only lay the foundation for more development and less of a public voice in what gets built.

"Community standards change," said Bunch. "So, if a project is sitting on the shelf for four or five years, then we need another chance to look at it."

Linehan said there are 11 projects in Austin that need the two-year extension and more are coming in every day. The Land Use and Transportation Committee is going to discuss the issue in October.