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Thursday, March 23, 2017 by Audrey McGlinchy, KUT
What’s the future of Austin’s East 12th Street? Ask these guys from Dallas.
Property ownership can be a stealth business, with land changing hands before anyone’s had time to notice.
For the past four years, one North Texas company has quietly begun buying up property on E. 12th Street. Ironically, the company takes its name from a cry of surprise and discovery: “Eureka!”
One-fourth of what was once a thriving business corridor for Austin’s African-American community is now owned by Eureka Holdings, a company based in Grapevine, outside of Dallas.
“Of course I was suspicious,” said Natasha Madison, a member of the E. 12th Street Merchants Association. Madison discovered the land grab when she was researching property ownership in the area. “I’m a pretty sunny, optimism kind of person, but I did find myself wondering what was the plan?”
Between 2013 and 2016, Eureka purchased 36 properties on E. 12th Street between I-35 and Walnut Avenue, according to Travis County property records. The property value of these three-dozen lots totals nearly $16 million. The company also owns at least half a dozen more properties on adjacent streets.
Eureka holds the properties under different legal names, a practice not uncommon and used to capitalize on a tax benefit or shield a company from unwanted attention. And their legal name game is often playful.
For example, 2211 E. 12th Street is owned by 2015 Beefy Gold Bullion LP. 2101 E. 12th Street is listed under the company name Country Nelly CR LP. (Rapper Nelly released his debut album “Country Grammar” in 2000.)
1500 E. 12th Street, which a church leases from Eureka, is owned by Sodosopa Salmon LP. Ironically, that legal name is a reference to a South Park episode, where Sodosopa (South Downtown South Park) is short for a newly gentrifying part of town.
The company doesn’t shy from noting its ability to creatively christen a property.
“All our properties have different legal names,” wrote Vice President Stephen Gibson in an email. “We get creative sometimes. For a while we used all animal names — like Aardvark Park, for example.” 2510 E. 12th Street is listed under 2016 Beaver Gardens LP.
“In another case for a property on Sol Wilson we called the LP Castaway after Wilson the volleyball in the movie,” wrote Gibson.
As for what’s on Eureka’s lots, some are home to rental houses, others businesses – including a barber’s shop and a nonprofit. A handful of the properties are vacant lots.
Raymond Medearis, 70, grew up in the home on 913 E. 12th Street. By the time he was ready to sell, it was only a vacant lot. A Eureka employee called him and invited him to drinks.
“We had a couple of beers and he told me (before the property was) even listed, he’d just pay me whatever I wanted for it,” said Medearis, who said the company paid him $430,000 for the empty lot on the corner of E. 12th and Curve Streets.
When asked about Eureka’s plans for the properties, Gibson wrote in an email, “There is no specific plan at this time.” As for the question of buying up more property on E. 12th Street, Gibson responded, “If the opportunity comes along to add to our holdings, we’ll consider it.”
Austin Revitalization Authority President Greg Smith said he believes there will be more transactions.
“I’ve talked to some folks that know them and recognize what they’re doing,” said Smith. “They’re purchasing as much as they can.”
As for when Eureka will begin development, the company won’t say.
James Rolston has lived in a home now owned by Eureka on E. 12th Street since 2009. When he answered the door on Wednesday morning, he said he had just renewed his lease for another year. He had no idea what the company’s plans may be.
Whatever they plan to build, Madison hopes they’ll consider the wants of locals like her and the members of the merchant’s association. She said she’d like to see an E. 12th Street where people can shop for groceries, get a haircut or maybe see a movie – a self-sustaining community, like the one that used to exist.
“African-Americans weren’t welcome outside of that community so we did everything we needed to do within the confines of that community out of necessity,” said Madison. “People in the district they ate there, they went to school there, they shopped there, they buried their dead there. Everything we did we did within this community.”
Madison and members of the merchants association have met with Eureka, and Madison described the meetings as “amicable,” but no plans were divulged. City Council Member Ora Houston’s office confirmed that a representative of Eureka met with her to discuss their purchase of the properties and that, “(s)he did ask if they had any plans for the properties to which they said no.”
While Madison is hopeful the company will consider the community’s needs in their development plans, she is also realistic.
“Real estate development is big money, big business,” said Madison. “And it is what it is. And at the end of the day what it’s about is being able to show ROI (return on investment) on a spreadsheet. And that’s not what I’m talking about. What I’m talking about is altruism. What I’m talking about is compassion. … And some of that will mean that in an opportunity to take the money or provide for the community, you have to provide for the community.”
Photo by Jorge Sanhueza-Lyon/KUT. This story was produced as part of the Austin Monitor’s reporting partnership with KUT.
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East Austin: East Austin is the quadrant of Austin that, generally speaking, is east of IH-35.