City of Austin says state law allows it to not release homeless hotel purchase documents

Investigations

AUSTIN (KXAN) — The City of Austin-owned building off I-35 near Oltorf Street is fenced off, soon to become the Southbridge Homeless Shelter.

The city paid close to $6.3 million for the Rodeway Inn, which it used as protective lodging for people experiencing homelessness and others vulnerable to COVID-19. Renovations are expected to cost around $1.5 million, as the city converts it to bridge shelter.

But city attorneys argue closing documents for its 2019 purchase of the property shouldn’t be made public, prompting concerns about transparency from First Amendment advocates.

The argument comes in response to a KXAN public information request for the documents, which would include broker information, environmental studies, engineering reports and more.

“There’s going to be a general disclosure statement filled out by the seller that’s going to say, ‘here’s what I know about the property,'” said Bill Gammon, an Austin real estate attorney.

In a letter requesting a ruling from the Texas Attorney General’s Office, city attorneys said releasing the records would provide “an advantage to a competitor or bidder.” That’s despite the city purchasing the hotel a year and a half ago.

“Competitive bidding is based on the principle of secrecy, obviously,” said Gammon. “But where’s the bid?”

The city cited Gov’t Code § 552.104(a) as a reason to withhold the documents.

“The information at issue concerns the purchase of a hotel that the City intends to use as part of a larger scale plan to provide housing and services to individuals experiencing homelessness. This purchase is part of a larger strategy by the City to provide housing and services for those individuals, and the strategy includes the purchase of other similar properties for these purposes,” said Assistant City Attorney Zachary Brown.

He went on to say: “The purchase at issue has been executed, but release of the information would harm the City’s interests in securing the best price for other properties. The City plans to continue to purchase other properties and release of the information would harm the City’s negotiating position in securing the best value price from property owners. Therefore, the City may withhold the information pursuant to section 552.104 of the Government Code.”

A city spokesperson told us it didn’t have any comment other than what was in the letter.

Gammon said on the city’s argument: “I think it’s a major stretch, and I’m being nice.”

Kelley Shannon is executive director of the Freedom of Information Foundation of Texas. She said using the city’s logic, it would be exempt from disclosing information on virtually every real estate transaction.

“This is just a case of a city not wanting to tell its taxpayers how it’s spending its money,” she said.

Rodeway Inn is one of four hotels city council members have approved to buy in order to house the homeless.

Two of those purchases are still in negotiations, the city tells us. They include the Candlewood Suites in northwest Austin and the Texas Bungalows Hotel and Suites on Burnet Road in north Austin.

The city also owns the Country Inn and Suites near the I-35 Frontage Road in the St. Johns neighborhood.

We also requested closing documents for the city’s purchase of that hotel. Late Thursday afternoon the city sent back some records, including the property deed and land surveys. It did write a separate letter to the Attorney General, saying some of the information we requested should be withheld.

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