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Statesman PUD nears final approval

Tuesday, November 8, 2022 by Jonathan Lee

The redevelopment proposal for the former Austin American-Statesman site is headed for final approval in the coming weeks after City Council on Thursday approved the planned unit development, or PUD, on second reading. 

If Council approves the PUD ordinance on third and final reading, developer Endeavor Real Estate will be able to transform the 19-acre lakefront tract at 305 S. Congress Ave., currently home to vacant offices and surface parking, into a huge mixed-use development.

Plans show 1,378 residential units, 1.5 million square feet of office space, 275 hotel rooms and 150,000 square feet of retail and restaurants spread across six towers up to 525 feet tall. Over half of the site will be parks and public space, including a reconstructed hike-and-bike trail and a bat watching area. 

The vote on second reading was 7-1-2-1, with Council members Alison Alter against, Mackenzie Kelly and Ann Kitchen abstaining, and Kathie Tovo off the dais. 

Since first reading in April, Endeavor Real Estate, Council members and city staffers have continued to negotiate the PUD’s more controversial elements. On Thursday, Council debated several of those elements, including affordable housing and whether to allow a hotel on-site.

Affordable housing has been the most controversial element of the project. Some Council members and community groups, hoping to capture more community benefits from the developer’s expected windfall, have demanded Endeavor include more affordable housing on-site.

Endeavor has offered three options for affordable housing: 55 on-site affordable units (or 4 percent of the total) priced at 80 percent of the median family income; $23.2 million for the city to spend on affordable housing elsewhere; or off-site affordable units at 422 at the Lake, an existing apartment complex nearby. The last option would translate either to 70 units at 80 percent MFI or 34 units at 60 percent MFI, and the units would be available much sooner than other options. 

But another choice could yield even more units. Walter Moreau, executive director of nonprofit developer Foundation Communities, said Thursday that the $23.2 million fee in lieu of on-site affordable housing could help fund an affordable housing project developed in partnership with the Mary Lee Foundation along South Lamar Boulevard.

That project would have 128 affordable units in its first phase, with units affordable at 60, 50 and 30 percent MFI for 99 years, as opposed to the 40-year affordability period in the other options. Around 600 affordable units are planned in later phases. 

Council members seemed more inclined to support off-site affordable housing, and several signaled interest in the Foundation Communities option. “I would just go for the greatest number of units we could get close to downtown,” Mayor Steve Adler said. 

Council member Kathie Tovo, whose district includes the project, has pushed for 10 percent on-site affordable units. She was off the dais during part of the discussion on Thursday.

A majority of Council also opposed allowing a hotel on-site in hopes of getting more housing. Richard Suttle, representing Endeavor, said the requirement could put the project in jeopardy. “No hotel does not necessarily mean more housing,” Suttle said. “A hotel is just an integral part of the financing.” 

Council also supported an amendment by Adler to allow greater density on-site in exchange for affordable housing on par with what the downtown density bonus requires. 

Negotiations on these elements will continue before Council votes on third reading, likely in early December.

Rendering courtesy of 305 South Congress PUD via the city of Austin.

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