Downtown News and Rumor Round-up

Downtown News and Rumor Round-up

Rainey Street District hotel breaking ground next month?

If you’ve been around downtown Austin since 2006, you’ve been hearing about the Hotel Van Zandt.

It was a sister development to the Shore Condos, sharing the northern end of the site.  Hotel Van Zandt was initially planned to be a $100 million, 29-story hotel and condo tower.  The scope has been reduced to 16 stories and will include just the hotel component.

We’ve heard all of this before. Developers are now telling the Statesman they plan to get going next month. This is the same thing they told the ABJ in March, which is a sign that it is indeed ready to roll.

Hotel Van Zandt was initially planned to be a $100 million, 29-story hotel and condo tower.  The scope has been reduced to 16 stories and will include just the hotel component.

Statesman has more

New Travis County courthouse up for debate

Courtmap

The ongoing debate for whether or not Travis County will enter into a deal for a public-private partnership to build a new courthouse downtown could be coming to a head.

Recently, the Statesman profiled some of the issues associated with the project, and on Tuesday the Commissioner Court talked to the finalists for the deal: URS and Broaddus and Associates.

The court did not take a vote when it discussed it at a hearing this past Tuesday, but is taking the issue back up this Tuesday.

The new courthouse could rise 17 stories next to Republic Square. Earlier this year, commissioners decided they will hold a bond election to finance the courthouse, but no date is certain.

If the deal ever falls through, or the public does not approve the bonds, it would put a lot that is not encumbered by capitol view limits back into the private market.

Statesman has more

Austin is a finalist to host the X Games

ESPN announced that Austin is one of four finalists to host the 2014, 2015 and 2016 X Games. The games would be held at the Circuit of the Americas, but without a doubt, we can expect something related downtown. If – of course – Austin ends up taking the cake.

For the record, I think it will.

Austin is competing with Chicago, Detroit, and Charlotte, N.C. I think both COTA and Gov. Perry will roll out the red carpet and offer just as competative package of any tax breaks the other cities and states can offer. From a ticketing and marketing perspective, the folks at ESPN must know that Austin is going to have the best draw among the kids and also know that marketing machines like Nike and Samsung already have the ground troops and past experience to tackle Austin from a marketing perspective, due to SXSW.

ESPN is sending envoys here next month and expects to pick a winner this summer.

KXAN has more

The saga of an expensive parking garage coming to a close?

For you readers who are devotees of downtown palace intrigue, the saga of Whittington v. City of Austin could finally be coming to a close.

The case started almost a decade ago, in relation to the public-private partnership the city got into to build the Hilton next to the convention center. The city seized Harry’s downtown lot and he sued them for it.

After a series of trials, the case made it all the way up to the Texas Supreme Court, which sided with the city.

Got to give it to the man, he knows how to dig in and raise hell. Although, he must have asked himself several times over the past few years: What would that lot have been worth today if the city hadn’t tied it up in litigation 10 years ago?

Maybe now, they will put all of that vacant retail space, which wraps the ground level of the garage, to good use.

ABJ has more

Royal Blue Grocery Announces Next Location @ The Whitley

Royal Blue Grocery Announces Next Location @ The Whitley

Big news for those living and working on the east side of Congress Ave.  Royal Blue proprietor, George Scariano, confirms with DAB that the lease is officially signed with The Whitley!

This will be the locally loved grocer’s fourth location.  The 2300 ft store will anchor the Railyard District, and we can expect an opening in July.

The store will be a full blown coffee shop, offering beer & wine, with an on-site kitchen serving baja-style seafood tacos, tacos al pastor, and flattop burgers.

We can’t wait!

Why Are Prices Surging At The Railyard Condos?

Why Are Prices Surging At The Railyard Condos?

The Railyard condos are unique.  The two low-rise buildings sit on two of the best sites in downtown Austin, and have usually been more affordable than the newer, sexier high-rises.  Part of the appeal is location: situated across from the Austin Convention Center, 100 feet from the MetroRail, one block from Congress Avenue, three blocks from competing luxury towers, the Austonian and Four Seasons.  The Railyard has enviable proximity to most anything in downtown Austin.

Remember last year’s NIMBY fury over Austin’s Short Term Rental ordinance (pdf)?

You would be in good company if you assumed that all of downtown Austin’s condos and apartments were making money on STRs.

You would be wrong, though.  

Downtown condos have home owners associations (HOAs).  HOAs have rules, and in downtown Austin those rules are usually antagonistic to short term rentals.  Breaking those rules could result in a $1000 per day fine by the HOAs.  Despite the fact that the STR ordinance does not regulate apartments and condominiums, last year’s fight with the City of Austin to regulate STRs wasn’t going to impact most of us living in downtown because of these HOA rules. [UPDATE: rules have been revised to cap STR permits in CBD multi-family buildings at 25%]

The Railyard condos are very, very unique.

This past November, just a month after Austin’s new Short Term Rental ordinance took effect, an enterprising Railyard owner recognized the Railyard’s bylaws did not forbid short term rentals and put together a fund to purchase several units.

The investment rationale is simple: opening up your condo as a vacation-rental-by-owner (aka. VRBO) during SXSW, ACL, F1 (just to name just the big opportunities, not to mention conventions) can yield more rent during those events than the total rent from a typical 12 month lease!  Same for Railyard owner-occupants who can lease their place out for a few nights, take a vacation, and make a couple thousand bucks.

The economics of Railyard ownership shifted overnight. Word quickly spread to the owners and a handful of Austin Realtors.  In the previous year (Nov 2011 – Nov 2012), 1bd/1ba units at the Railyard condos were trading at an average of $285/foot, and units with at least 2bd/2ba units were trading at an average of $275/foot. [UPDATE: one year after posting this article, the last recorded MLS sale at Railyard was a building record $415/foot]

Going forward, expect sale prices at the Railyard condos to be 20-25% more than last year, reflecting the new economics of embracing downtown short term rentals.  Owner-occupants are getting in on the action, too.

Offering the flexibility to lease your condo on a short term basis is a privilege that makes the Railyard unique among downtown condos.   This privilege has significant value.

STRs can be a win-win for owners and associations.  The key is balance and monitoring the impact on residents.

The Railyard HOA is smart to approach STRs with reasonableness and attach fees to the process.  These extra fees will help fund their operations, building improvements, and keep HOA dues low for homeowners.  Homeowners, who are also able to capitalize on their property.

I’ll stop short of advocating that all downtown buildings should permit STRs – I don’t agree with that.  However, there are several buildings that should be paying attention to what the Railyard is doing.  It seems reasonable for more HOAs to experiment with loosening their STR rules, monitor the process, use the money for building improvements, and course correct as needed.

-Jude

[updated 06/01/2014: It has been discovered that Brazos Place Condos at 8th Street & Brazos Street is doing something similar by permitting one-month minimum lease terms.]

What’s Missing? Clues To Downtown Austin’s Next Apartment Tower

What’s Missing? Clues To Downtown Austin’s Next Apartment Tower

What’s missing is a clue to what might become downtown Austin’s next apartment high-rise.

Back in August we discovered the old warehouse on the corner of Trinity and Cesar Chavez had been acquired by World Class Capital Group, and quickly conceptualized into an apartment tower, with the working name of Trinity Place.

For decades, two small billboards stood at the eastern edge of the lot.  If you were heading east or west on Cesar Chavez you wouldn’t have missed them.  As of this week, those billboards have been taken down!

Now, WCCG would not decide to forfeit that steady billboard lease without a good reason.  I speculate this is a signal that development efforts are progressing.

Trinity Place conceptual footprint – Cesar Chavez @ Trinty (pdf)