Greystar/HACA proposal recommended for redevelopment of Home Depot site
Thursday, July 22, 2021 by Chad Swiatecki
City staffers have recommended moving forward with a proposal from Greystar Development and the Housing Authority of the City of Austin for the redevelopment of the 19-acre East Austin site best known as the home of a long-closed and decaying Home Depot store.
In a memo circulated this week, Sylnovia Holt-Rabb, acting director of the Economic Development Department, laid out the parameters of the proposal and the case for entering into an exclusive negotiating agreement with Greystar and HACA instead of the other four groups that showed interest in the project.
The proposal, which is expected to change as the city and developers reach a final deal, calls for 560 housing units, with half of those offered at rates affordable for those earning between 50 and 70 percent of the median family income for the Austin area. The site would triple its current parkland and open space and add 15,000 square feet of retail space based on community needs along with space for supportive services such as health care, job training, child care and small-business incubation.
Known throughout the city as the Home Depot site or the St. John site, the property has long been considered the answer to a variety of city needs, from housing for the homeless to creative spaces and arts and music venues.
Those uses weren’t allowed, however, because the city used bond money approved for public safety use to purchase the parcels that are now one 19-acre site, with the intention of putting a courthouse or police station there. When it became apparent that the bond funding wouldn’t cover those construction projects, any redevelopment effort came with the requirement that the builder would start the project by paying off the $10 million in bond debt for the site.
“For a long time people have said, let’s use it for creative space or tiny houses, but the fact of the matter is there’s a legal restriction on using it permanently for anything else other than as a police station or courthouse, because if you take out bonds for public safety facilities you have to use it for that,” said Council Member Greg Casar, in whose Council district the property sits.
“There have been all sorts of ideas, but at the end of the day we needed to go through the long process and request for proposals to find builders who would fulfill the community vision and show up on day one with a check for over $10 million to pay off the debt – then it can be used for something else.”
The city memo outlined several positive considerations for the Greystar proposal, including that no city subsidy will be needed, affordable and market-rate units would be intermixed rather than separated, and the partnership with HACA ensures long-term affordability and services to help support lower-income residents.
Casar was most impressed with Greystar’s perfect score on the financial proposal portion of the city’s scoring matrix. As negotiations start, with the goal of construction beginning in 2022, he said he wants a strong mix of rental and ownership units, various design improvements, and turning some of the parking on the site into more space for retail or nonprofit groups.
The redevelopment of the site means there are no other significant pieces of idle city land in District 4, though Casar said he hopes this project’s expected success will create momentum for more affordable housing projects.
“I hope we can use this as a template for how we can start to develop sites more quickly. With the affordable housing or antidisplacement bonds we won’t have the obstacle of an extra $10 million of debt that the builder has to bring up front, which was a key challenge with this site,” he said.
“If we can figure out such a difficult piece of property that had $10 million in debt and had a big-box store falling apart on it that was likely to be demolished … I think we can go a lot faster using a similar model on sites purchased with housing dollars.”
City Council will consider the negotiating agreement next week.
Video still of the old Home Depot site from YouTube.
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