1) I'm all for a law like the above, makes total sense to me. You accept public money, you accept public intervention. I'm 100% on-board with that. I'll leave it to the legal eagles around here to tell me whether or not it will work, because if there's only one thing I've discovered over my decades of discourse on message boards, it's that my logical and efficient method of thinking, rarely applies in matters of the law. The law is convoluted, illogical, inefficient, and stupid. It rarely does the right thing, the correct thing, the logical and efficient thing.
2) I'm sure the city council has agreed to help look for a place downtown. Finding one and commercializing it are completely different, though. There's just not much real estate available, especially considering transportation and basic functioning infrastructure. Also, the Austin city council is backward and largely inept. I'd be shocked if they're able to do anything to help, it's far more likely their interference will drive this whimsical billionaire far, far away.