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Board members question price of Cap Metro’s downtown office space

Tuesday, September 23, 2008 by Mark Richardson

Some members of the Capital Metro board think the agency may be paying too much for property it leases in downtown Austin. Austin Council Member Mike Martinez raised the issue Monday at work session, questioning why agency staff was proposing approval of a contract that jumped from $12.50 to $32 a square foot.


The property is the Capital Metro office at 323 Congress Avenue in downtown Austin. The storefront space is used to sell bus fares and to promote the bus system to downtown pedestrians


“Why is the price of the contract going from $284,000 to $875,000 in just one year?” Martinez asked. “We called a commercial real estate broker this morning. In fact, we called Cox Realty – the same firm you used to write this contract. We asked them to compare prices, and they said $32 a square foot for downtown is outrageous.”


Capital Metro has maintained the downtown space for several years, and leases other space in several areas of the city. The agency may also be leasing space near MetroRail stations in the future.


Mayor ProTem Brewster McCracken wondered if the downtown space was really needed.


“What do we use it for that is worth that amount?” McCracken asked. “I hope we can look for ways to partner with other cities, or the county, in order to save money when need space. There are a lot of good opportunities to do that.”


President Fred Gilliam said leasing the space was necessary.


“We use those spaces for ticket sales,” he said. “We are looking at finding space in conjunction with the city and others, in places such as the Convention Center and other city and county facilities.” Even though tickets are sold in convenience and grocery stores around the city, evidently there are no other downtown locations.


Gilliam said the agency’s staff is currently preparing a space needs analysis that will take a 20-year look at the agency’s needs. He said there is an emphasis on making sure Capital Metro has a presence in the transit-oriented development near its MetroRail stations and major Park-and-Ride facilities.


New Board Member Mike Manor commented that staff should make certain that there is public input into the process of leasing space for Capital Metro facilities.


“We need to find ways to integrate the agency into the community,” he said. “There are numerous groups that need a voice in this process.”


The item was pulled off the agenda for September and will be rescheduled for the October meeting.

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