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Austin enjoying a ‘mini-boom’ in construction, says downtown advocate
Tuesday, August 28, 2012 by Kimberly Reeves
In a time when many U.S. cities are suffering economically, construction in downtown Austin is booming.
That good fortune is not lost on Downtown Austin Alliance Executive Director Charlie Betts, who says Austin is reaping the benefit of downtown development and redevelopment, even in the light of a national recession.
“I think we’re very fortunate to be in Austin,” Betts says. “We’ve not been nearly as impacted as other cities by this recession. In fact, I’d call the recent construction in Austin a ‘mini-boom.’”
The mini-boom is based on three ongoing themes: the addition of hotel rooms that can boost the size of conventions that Austin can attract; the construction of the Waller Creek tunnel project, which is intended to create new life on the eastern edge of downtown; and the activation of the Cesar Chavez corridor with planned construction of the new central library, the redevelopment of the decommissioned Seaholm Power Plant and the redevelopment of the site of the former Green Water Treatment Plant.
Each August, Betts typically writes his annual report for the Downtown Austin Alliance, and this year he will write about all the gains that have outweighed the challenges in downtown Austin. Betts points to any number of projects that have either broken ground or will soon: Hyatt Place; two convention hotels; two mid-rise projects; and at least two additional apartment towers expected to materialize soon. An office tower also will break ground soon, the first in a number of years.
Downtown sits on a tax base of about $5 billion in property. Betts can easily see that doubling, especially with the opportunities around Waller Creek.
“Downtown continues to be an attractive place for real estate investment,” Betts says. “That’s our goal and our objective, to make downtown an attractive place, and the city continues to do its part in providing the infrastructure that will accommodate what is becoming a high-density, high-investment area.”
Downtown appears to be ready to reap the rewards of density that were envisioned by former mayors Kirk Watson and Will Wynn. A decade ago, a buyer could lease downtown office space at $10 per square foot less than the suburbs. The push was for businesses to leave the central business district.
“Our office buildings are full. Our apartment towers are packed. Our condos have been sold out, which nobody believed could happen,” Betts says. “People are willing to pay double the rent to live in a Class A apartment tower. And, when it comes to office space downtown, people are paying a $12 to $15 per square foot premium to work downtown. The market has entirely flipped.”
Betts puts transportation at the top of the challenges for downtown, especially getting into and out of the area. The Downtown Austin Alliance considers multimodal options to be key to solving this challenge.
“Our roadway system within the city is already built,” Betts said. “We’re not in a situation where we can add another four lanes to Lamar. We’ve got to work with what we have. We can tweak intersections, but it’s really going to have to be a multimodal approach to improve access not only to downtown but also to the university and Capitol complex.”
The Downtown Austin Alliance still is committed to a multimodal system that includes urban rail and a streetcar system that links downtown to points of interest across the city.
East Sixth Street, or Dirty Sixth as some have called it, also is a challenge. Crime rates on Sixth Street are “not acceptable,” especially in five of some of the most historic blocks in the city. Downtown must move away from 10 bars to a block and try to build up some daytime uses such as live music venues.
“Hopefully, the development of Waller Creek is going to be helpful,” Betts says. “It’s a challenge, but it also has great high-side potential.”
The city wisely maintained control of the Second Street corridor near City Hall and has been rewarded with a re-activated retail community, Betts says. Such efforts hopefully can yield lessons for revitalizing commerce on Sixth Street and Congress.
“If we can get a better mix of tenants along Congress Avenue and Sixth Street, it will increase the attractiveness of downtown overall,” Betts says. “It will raise rents for everyone. Success floats everybody’s boat.”
New initiatives also could activate the northeast quadrant of downtown, Betts said. The state’s new facilities master plan could activate San Jacinto Street, which is often referred to as a canyon of parking garages. The quadrant also is also expected to be the location of the University of Texas’ teaching hospital and medical school, bringing new life to a lifeless area.
The downtown group also considers homelessness as an issue. The organization has entered into a partnership with Foundation Communities to move some of the city’s hard-core homeless people into one of Foundation Communities’ four single-residency housing projects, including one downtown at 11th and Trinity.
Many of the projects, like reworking state office buildings, will be decades in the making. But Betts predicts Austinites will see changes in the city’s downtown skyline in the coming five years that are as good or better than the last five years.
“Just as the face of downtown saw so many startling and dramatic changes in recent years, you can expect to see even more dramatic changes,” Betts says. “Looking at the development in the southwest quadrant with Seaholm, the additional of Waller Creek the teaching hospital and state plans in the northeast, you will see a different Austin in the next five or six years. It’s very, very exciting.”
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