Risks of Public-Private Development Partnerships Materialize

A 1,700 acre mixed-use development campus outside of Austin, TX, dubbed "Wildhorse Ranch," sits in limbo as promised economic development remains unrealized. Over 700 acres of the proposed development are in bankrupcy proceedings, and the only parcels under contract (about 300 acres) currently have no definite plans.

The public tax dollars invested in the project--those subsidies that developers say they need to make their dreams happen--are going wasted and the concept languishes without any firm direction. It's also privatization run amuck:

• More than a year the state built a massive toll road on promises of development, no development has occurred
• The city of Austin agreed to reimburse developers up to $30 million for water and wastewater improvements under the assumption that the subsidies would promote growth
• A major wastewater facility has already been built at Wildhorse by the project's original developers, and so far they have been reimbursed about $3 million; there are no Wildhorse utility users to pay fees to the facility

The original master plan called for 5,900 homes, but that number was increased to 7,000 when the original developers sold to a new development group, which ran out of money before anything could be built.

It is clear that if the dreaming schemes of developers can easily get ground down by the vagaries of reality, and taxpayers should be cautious about handing their money on the front end to private companies with no guarantees. There is no telling how much money Austin and Texas are going to lose down this public-private sinkhole. And the developers and the tolling corporations have no accountability to taxpayers.