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Plaza Saltillo moves forward, shorter for now

Friday, February 10, 2017 by Caleb Pritchard

City Council gave provisional approval to the long-gestating Plaza Saltillo project on Thursday evening, but in a form dramatically different from what the developer proposed.

As he signaled he would during a work session on Tuesday, Council Member Pio Renteria offered a first-reading motion that would reduce the height of a proposed office tower on the westernmost edge of the project from 125 feet to 70 feet.

Renteria said he wanted to give Endeavor Real Estate Group and the East Cesar Chavez Neighborhood Planning Team more time to negotiate a compromise on the project that would plant at least 141 affordable housing units in the shadow of downtown Austin.

The Capital Metropolitan Transportation Authority owns the Plaza Saltillo tract, which stretches for nearly a half mile from I-35 to Comal Street between East Fourth and Fifth streets. The project qualifies as a transit-oriented development in part because MetroRail’s Red Line runs through the length of the tract.

The planning team has accused Endeavor, which Capital Metro selected in 2014 to redevelop the empty site, of not sticking to its original promises. The team holds that Endeavor originally guaranteed that 25 percent of the 800 units would be below market rate and that the height of the project would be capped at 60 feet.

Endeavor’s current plans call for only 15 percent affordable housing. In addition to the 125-foot office tower, the company is also asking to slightly exceed that 60-foot cap on the rest of the project.

Capital Metro CEO Linda Watson told Council that the agency asked Endeavor to build a much larger office component in order to provide the project a daytime population that would be substantial enough to help support retail businesses on the ground floor. She also said that reducing the tower’s height to 70 feet would cost the agency $36 million in rent money and the city $22 million in property taxes over Endeavor’s 99-year lease.

Despite several outlets, including the Austin Monitor, reporting that Endeavor pitched the project with a promise of 25 percent affordable housing, Watson said that from the early days of the negotiations, Capital Metro understood the developer was offering only 15 percent, with the expectation that the city could chip in for the remaining 10 percent.

In the end, Council voted 8-3 to approve the project on first reading. Mayor Pro Tem Kathie Tovo and Council members Alison Alter and Jimmy Flannigan voted against it.

Afterward, Flannigan explained his opposition to the Monitor, saying that he supported the taller tower due to the project’s proximity to the central business district.

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