Palm School: A Battle Between City, County, Advocates, and Rodeo Austin

Palm School, built in 1892, with the Fairmont Hotel in the background (Photo by Jana Birchum)

Austin's Downtown drama isn't just unfolding at the Convention Center; next door, Palm School is the stage for a complex ballet involving the city, Travis County, local Latinx leaders, mental health providers, the Fairmont Hotel, and even Rodeo Austin. At the center of the action is Travis County Judge Sarah Eckhardt, who last week sent a letter to Mayor Steve Adler and the City Council offering to swap the county-owned Palm School property at Cesar Chavez and I-35 – valued by her at $53 million – for the city-owned HealthSouth hospital site on Red River, the land underneath the Travis County Exposition Center, future rights to a 2-cent Hotel Occupancy Tax, and three first-round draft picks. (We made that last part up.)

Adler and Council Member Kathie Tovo, whose District 9 includes Palm School and who authored the omnibus Palm District resolution that's guiding the city's hand as it redraws the Convention Center area, delivered a stammering response to Eck­hardt that redirected her to City Manager Spencer Cronk, at least until Council's back from summer break. While Eckhardt's power play may seem unduly assertive, the city's own offer for Palm School – nothing – was also a nonstarter, so now negotiations are joined in earnest.

Why would the city presume to have Palm School for free? Because it's an important historic landmark – the legacy primary school for Austin's Mexican American community from 1892 to 1976. As Downtown, the Eastside, and Rainey Street have been transformed and gentrified, passions for preserving Palm School as a public space that both honors and transmits its historic legacy have become more intense. "We would prefer that the property stay in the city or county's hands," says former AISD Trustee Paul Saldaña, whose father attended the school and who's been a leading voice among those working to preserve Palm who've had "a seat at the table" with Tovo in crafting the Palm District vision.

In principle, the city and county agree on this: "We absolutely share the city's vision for placemaking in the area," says Eckhardt. Last month, the Commissioners Court applied restrictive covenants to Palm School that, in her view, "make it clear that any owner, public or private, must preserve the historic school and utilize it for a public purpose." She adds that the $53 million figure, while a starting point for talks, is based on an appraisal "that considers the covenants we put in place. So there's value in the property that we can use to support the preservation we all want."

In lieu of a $53 million check, Eckhardt proposed the land swap to light a fire under other city-county ventures that had "never really been able to capture the city's attention," she says. The county holds a lease for the city-owned land under the Expo Center through 2033, and Rodeo Austin, the Cen­ter's major tenant, is "extremely committed" (in Eckhardt's words) to a public-private venture to upgrade the complex. In the future, the 2-cent "venue project" HOT increment now used to pay debt from the 2002 Convention Center expansion (see "To Expand the Convention Center Or Not?" July 19) could support both Palm School and the Expo Center, pursuant to a "long-term plan" that Eckhardt would like to develop with the city.

Meanwhile, up Red River, the city has been soliciting proposals to develop affordable housing at HealthSouth, which it purchased in 2017, even as mental health stakeholders have sought locations for needed psychiatric services Downtown. In late June, those stakeholders – including Central Health (which owns the adjoining Brackenridge property), UT Dell Medical School, Integral Care, Travis County judges and law enforcement, and Eckhardt – asked the city to pause that process to give them time to submit their own proposal for HealthSouth, which also neighbors the new city/county Sobering Center. "I thought this was a way to look at the big picture and think in a more visionary way," says Eck­hardt. "I'm glad Palm School is of such interest that we can leverage the city's attention."

However, Saldaña and his community allies, who've worked with Commissioner Margaret Gómez (whose Precinct 4 includes the site), think Eckhardt herself has not paid enough attention to a non-negotiable need to preserve, rather than monetize, Palm School – one not completely addressed by the restrictive covenants approved by the county. Nevertheless, "The city and county entering into negotiations is a good step," he says, adding that he's not sure the two sides have yet "had time to negotiate in good faith."

They were further distracted this week when Doug Manchester, owner/developer of the Fairmont next door, appeared to make an unsolicited offer to buy Palm School from the county, donate $5 million to care for the historic structure, and build on the land remaining. This late-in-the-game move drew ire from Saldaña and others, and on Tuesday Manchester walked it back via a letter to the Commissioners Court, saying he doesn't want to short-circuit the process and that his "commitment to being a good neighbor remains as strong as ever.