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Jude Galligan

Shoal Creek Walk Concept

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Schlosser Development is proposing a new mixed-use complex in the parking lot to the east of the downtown Austin Whole Foods.  The following renderings and description were recently submitted to the City of Austin Design Commission and will be presented on Monday, December 14th.  The status is currently conceptual.

The Shoal Creek Walk, a proposed development project from Schlosser Development, will be a true mixed-use building complex located at the corner of West Sixth and Bowie Streets in downtown Austin, Texas. The project will closely conform to the constraints of the site which include a capital view corridor over approximately one half of the property and the Shoal Creek floodplain elevation.

These site limitations create a specific and very limited area where building improvements can be made on the site, by restricting both the building height and the overall footprint of any buildings on the site. Within those limitations, two buildings will be situated along Bowie Street, as the eastern portion of the site is within the floodplain. The high-rise building, at 350′ tall, will be located on the north portion of the property with a total of approximately 490,000 sq. ft. of office, retail and residential uses. The low-rise building will be situated at the corner of West Fifth and Bowie Streets, with primarily offices above the first level retail component for a total of about 100,000 sq. ft.

The two buildings together will provide more than 450,000 sq. ft. of office space, which is of a size able to attract a major employer and will likely be built in phases, to allow accommodation of a variety of tenant sizes. This flexibility will greatly enhance the feasibility of the project moving forward. The larger building will also have a residential component of about 90 units located above the office in what will be a narrower, residential footprint. The residential component adds to the feasibility of the larger building and is consistent with the downtown plan preference for vertically integrated structures.

The parking will be entirely within structured parking garages, both above and below grade, possibly with several surface ADA and drop-off parking adjacent to the building. Materials for the building will be of durable quality and wi ll be consistent with the architecture represented in the Market District.

A Simplified Argument In Favor Of The Density Bonus

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The debate surrounding downtown Austin density is postured as affordable housing vs. height. Height being a proxy for density, and if you want more of it you’ll have to pay for it.  If you believe in pro-density new-urbanist principles (like I do), then you might see the underlying debate as affordable housing vs. the environment.

If you are shifting your society away from sprawl, then you increasingly need to house people vertically.  As long there is available virgin hill country to pave over, that land will be cheaper than downtown Austin land, and there will be economics favoring construction of affordable housing on that land outside of downtown.  Until the region can coordinate an urban growth boundary, integration of socio-economic classes will not happen naturally without regulation.  The density bonus seems to be that regulation.

Many intelligent people believe that the the bonus is really a tax.  “Why should we tax density?” or “This makes development downtown more expensive” are reasonable concerns to anyone that wants to see more vertical development.   Sprawl occurs when it is convincingly more affordable to live outside urban core.  But, for every person that lives in the urban core, less pavement is needed outside of it.   Every person counts.  It’s far from a comprehensive solution, but I’m considering a new perspective that the density bonus is a positive for curbing sprawl.

Is it worth allocating affordable housing funds to 1 person in downtown, for the same cost to house 3 people in east Austin, or 7 people south of Ben White?  The answer might be yes.

Waller Creek Meeting Notes

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Waller Creek District Master Plan - Land Use

At last night’s WCCAC meeting:

Downtown Austin’s Waller Creek District and tunnel project continues to get more interesting.  At last night’s meeting of the Waller Creek Citizens Advisory Committee we covered a lot of ground.

1) 21c developer, Poe Companies, updated us on the status of the project.  They’re actively pursuing stakeholder input, so I’m comfortable saying that this the only new residential project in downtown Austin that still has legs.  The site plan calls for three structures: 1) apartments 2) hotel 3) future site tbd.  The condos are out, for now, but could be built on the future site.  The current focus is a 31 story, 350 unit apartment tower at the southwest corner of Red River and Cesar Chavez.  The tower would provide 400,000 inhabitable square feet with target lease rates from $1.50-2.50 per foot.  Steve Poe anticipated a unit mix of 70% 1bd/1ba.  They are volunteering 10% of the units to meet affordable housing standards (80% MFI), although they are not required to provide any.  There will also be ~10 artist studios facing the creek.  It’s unknown how these units will be priced.  When asked about quality of construction, we were guided to look at AMLI on 2nd as a comparison.  This proposed downtown Austin apartment tower is fully entitled (needs no variances), and the only hurdle is locking in the funding, which they are seeking a substantial portion of through the HUD 211(s)(4) loan program for multi-family development.

The hotel concept would be located closer to the corner of Davis St and Red River.  It would have have 200-250 keys spread across 12 stories and 225,000 inhabitable feet.  In the near term, the hotel is less certain to be built than the apartment tower, as it is more challenging to find financing for a hotel – I find this ironic given that Austin has a shortage of hotels and [some would argue] a surplus of apartments.  Such is the state of the financial markets.

After several years of tunnel planning work, this is the first project to come before the WCCAC.  The development team seems to be very progressive and in tune with the Waller Creek District Master Plan.  They understand the importance of public space and improving public connections from Red River into Waller Creek trails.  The earliest the project could begin is mid-2010, and I’m optimistic they will obtain their funding.

One of the most important questions you’ll see asked of every project that comes before the WCCAC is the estimated contribution to the TIF.  The $120MM bond that pays for the tunnel improvements is paid back through the incremental increase in ad-valorem taxes along the creek.  21c estimated that it would generate $1MM per year ($20MM over twenty years), to repayment of the bond.

2) A summary of the Waller Creek District Draft Development Standards were presented by city staff.  This is a set of guidelines to reinforce the vision for Waller Creek as identified in the master plan.  Sub-districts are defined which spell out appropriate design for each sub-district.  These rules could be codified into law within the next 6-9 months.  It’s good that we’re establishing these guidelines now.  City council could potentially allow development to begin along the creek on a case-by-case basis by providing variances from building in the floodplain prior to completion of the tunnel.  Depending on the timing of adopting these development standards, the 21c project may/may not be subject to them.

3) The WCCAC has been trying to find a way to assure world-class design standards along the creek while working within the legal constraints of the city’s procurement processes. Currently, the city will hire a firm capable of delivering a product.  THEN they seek input to design the product.  The city hires the firm before knowing what the final design looks like.  This process precludes “design competitions”, but the WCCAC has a much better understanding of how and to deliver aesthetic design input.  With enough lead time, a private sector “design competition” could occur such that the winner’s concept is delivered to the firm hired by the City, via the WCCAC.

-Jude

21c Museum/hotel
Waller Creek District

Kanye West Purchasing Austin Loft? Perhaps, But Not The Austonian Penthouse

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The Austonian

I love to see effective guerrilla marketing in action.

Earlier this month it seemed as if every Austinite on twitter was sharing rumors that hip-hop fashionista Kanye West purchased the top floor of the Austonian. Skeptical, as is my nature, I was doubtful – I had just toured the top floors. The Austonian is the furthest you’ll get from a proper “Austin loft“. The rumor propagated with Kanye’s lyric “New crib-LOFT IN- where its at-AUSTIN-where is that-Texas!!!”

I was scratching my head, and thinking “really?”. Pushing down my gullible pride, I bashfully confirmed with the Austonian. The rumor, of course, is 100% false, but it resulted in discussion and intrigue. This was cunning guerrilla marketing. 🙂

Think about it. Eventually, perhaps this year, a buyer will emerge for the Austonian penthouse. There are a handful of buyers that have their eye on this space, but are biding their time, waiting to see if the fierce competition among the luxury towers will further soften prices across the board. These towers are already negotiating, very discretely, behind closed doors. But, for the buyer that has their eye on a product with no substitutes, one day soon, they could wake up to real news that what they desire is no longer available.

Below, I’m reposting a comment I shared in another thread

Jude Galligan wrote:

The current market for these buildings [Spring, W, Four Seasons, Austonian] works like this: There are buyers right now paying for a specific view, or floorplan, or the flexibility of combining units. We’re negotiating hard, and seeing deals with 10-15% discounts from asking. More or less depending on the specific space and the buyer’s desire for customizations. At this level, buyers often just want a shell space and the ability to bring their architect into the discussion. There are other buyers waiting patiently for better negotiating posture in a softer market – they are less concerned about having a specific space.

Until each building receives a certificate of occupancy, and we can observe the velocity of closings on the existing contracts, it’s challenging to gauge a market for a product that Austin is unfamiliar with (i.e. luxury urban condos).

I don’t expect they will sell out before they open, unless they soften their prices in a blanket fashion come springtime. However, I don’t expect you will see auctions (with the possible exception of the attainably priced Sabine) as the financing for the Austonian, W, and Spring give them a couple of years from construction completion before they need to repay the debt.

Grapevine stories:
http://austinist.com/2009/11/04/kanye_probably_wont_be_at_the_runwa.php
http://modernmanmusic.wordpress.com/2009/04/13/gotta-loft-inaustin

Reltated posts about penthouse living:
https://downtownaustinblog.org/2009/10/09/pros-and-cons-of-living-on-the-top-floor/
https://downtownaustinblog.org/2009/06/12/the-downtown-austin-penthouse-part-one-economics/

Starr Building SOLD!

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The Statesman is reporting that last summer’s sale of the Starr building, located at 6th and Colorado, has finally closed.  Earlier this year we did a little bit of research to discover what used to occupy this space… check it out.