Council moves toward halting some home demolitions

Miller2015-10-15-Austin-City-CouncilFrom today’s Austin Business Journal:

Council moves toward halting some home demolitions under small-lot development rules.

In a year in which Mayor Steve Adler has said he wants to tackle housing affordability, Austin City Council has given preliminary approval to a measure that city staff said would make it harder to build affordable homes.

The measure amends the city’s rules regarding small-lot amnesty, which permits development on property that is less than the minimum lot size requirement of 5,750 square feet. The small-lot amnesty program is only available in areas with a neighborhood plan that allows it.

Under the amendment, narrowly approved on first and second reading at the Feb. 11 Council meeting by a 6-5 vote, developers would be prohibited from demolishing one home that straddles two small lots and then breaking up the lots in order to build homes on each lot. They measure is still subject to a third reading and vote by Council before being passed into law.

Greg Guernsey, director of Austin’s Neighborhood Planning and Zoning Department, said the amendment goes against the city’s broader affordability goals.

“It would negatively impact the implementation of some of the imagine Austin visions goals and priorities related to household affordability,” Guernsey told Council members at the meeting. “ It would also negatively impact land-use zoning opportunities for affordable housing development and impact the cost of development negatively and negatively impact the production of affordable housing.”

Still, Guernsey said staff were in support of the amendment because they never anticipated that it would result in the demolition of homes that straddle lots to make way for a new home on each separate lot. Rather, they envisioned it as a step to allow development on lots where no demolition was required.

“Staff felt very strongly about this because this is something that we went to the neighborhoods and told the neighborhoods how this tool would be used,” said Guernsey. “There’s a trust factor here.”

Critics of how the small lot amnesty program’s use has evolved gave voice to the notion that trust could be breached at the Council meeting, highlighting examples of top-dollar homes built where a single, larger home once stood.

“My neighborhood, Northfield, feels like we have been duped. In good faith we opted into small lot amnesty just as we have been proactive for over 15 years in welcoming density to the neighborhood. And now we are staring down the barrel of this SLA loophole,” said Clay Crenshaw during his comments to Council. “Now some developers are pointing to 100-year-old land plans and claiming technically all of the houses in certain neighborhood areas are built on two lots and, therefore, have been legally separated.”

Those against modifying the small lot amnesty program tried to appeal to macroeconomics to back their case, noting that more supply equals lower cost.

“I built homes in the North Loop area on small lots, and the simple truth is homes on smaller lots cost less at market rate,” said David Whitworth, a housing developer. “If you remove this option, all you’re leaving on the table tonight is the $800,000 options that is incentivized by our zoning. The banks love it.”

Councilman Greg Casar (District 4), who voted against the amendment along with Council members Delia Garza (District 2), Don Zimmerman (District 6), Sheri Gallo (District 10) and Ellen Troxclair (District 8), said that the unintended application of the small lot amnesty rules had long-term benefits that were worth keeping around.

“Long-term, if we’re requiring homeowners or renters to pay for 6,000 square feet of dirt, which is what is actually expensive, then it’s going to be unaffordable,” said Casar. “We need to be able to give people the opportunity, the choice and the option to live on less than 6,000 square feet of dirt. Because otherwise what will end up happening is only those that can pay for 6,000 square feet of dirt will be able to live in Central Austin, and we already see that occurring”

Adler, who voted for the measure along with Mayor Pro Tem Kathi Tovo and Council members Ora Houston (District 1), Ann Kitchen (District 5), Pio Renteria (District 3) and Leslie Pool (District 7), said that the original intent of the tool needed to be clarified but said he was open to further modifying it.

“I just think that when the city went through the process and adopted this tool, the analysis that was done was done for a very different purpose,” said Adler. “The way that it’s being used is something that should be discussed and go through our process.” Additional information>>>

Redevelopers wanted for high-profile downtown site

Miller statesmanFrom today’s Austin Business Journal: The first steps to redeveloping the the Austin American-Statesman’s prime downtown waterfront property are underway.

Today, the owners of the property announced they were soliciting mixed-use redevelopment proposals from qualified developers for the 18.9-acre South Congress Avenue site on the southern shore of Lady Bird Lake, the Statesman reports. The request for qualifications was sent Monday by Austin law firm Armbrust & Brown LLP.
The land represents one of the highest-profile redevelopment possibilities in town. The Travis Central Appraisal District values the property at $39.8 million.

For the time being, the Cox Enterprises Inc.-owned newspaper will remain at the location. The paper previously shifted its printing operations offsite. Then in December, Cox Enterprises sold the property to members of the Cox family.

In an email to newspaper employees, the paper reported Statesman publisher Susie Gray said the latest move was an effort by the Cox family to seriously consider potential future uses for the property.

“As you’ll recall, members of the Cox family purchased the land that houses our facilities,” the email said. “You may have heard that a Request for Interest and Qualifications was recently distributed. The RFIQ does not mean there will be any immediate changes to the property. It does, however, signal the owners’ long-term investment in the property, and their desire to seek the best strategy for determining the future of the site.” Additional information>>>

How an Austin developer overcame racist deed restrictions to create a thriving retail space

DaiDueShop1From today’s Austin Business Journal:

Renovating an ugly commercial building takes guts. Shalou Barth believes she’s proved her mettle by turning an aging, ugly strip center into a cool East Austin retail project at 2406 Manor Road.

“It was a dump. It had been on the market for over a year. It had temporarily been Obama’s [campaign] headquarters,” Barth said. “I had a vision of totally re-imaging this place.”

Three years after Barth put a contract on the property, which reportedly had been a grocery store and rehab facility in a previous life, it’s now a thriving, fully-leased gold mine of a retail center boasting the likes of Dai Due restaurant and butcher shop and Raven + Lily boutique.

When Barth put in the contract In December 2012, however, the daughter of Indian immigrants couldn’t believe what she discovered in the antiquated deed restrictions: Only caucasians could own the property and only certain types of alcohol could be served.

She also discovered that the property next door — leased by restaurant and bar Haymaker — was also under the same restrictions. But changing deeds isn’t an easy fix.

Barth, 37, met with about 10 stakeholders, including her broker Jon Switzer, to come up with a solution. She was undaunted by the all-male phalanx involved considering that, for several years, Barth worked for General Motors, gamely assisting dealership owners about how to improve their sales.

“I had the responsibility of telling 50- and 60-year-old men how to run their business,” Barth said. “It actually taught me a lot about different ways of thinking.”

The legal requirement to change the deed mandated that all 15 owners of 21 surrounding land parcels approve those changes.

“Who can get 100 percent of anything, especially since many of them are rental properties?” Barth said. “It was all pretty discouraging.”

Doors were slammed on her. Phone calls disconnected. Barth was disconsolate, until she woke up one morning and started researching information about deed restriction legislation.

It became apparent that she wouldn’t need 100 percent buy-in, but she would need one more person to sign off on the changes. She was at day 28 of a 30-day extention she received to meet the deed deadline.

“My only hope was this one last property owner — and I got it done,” Barth said.

The fun part was yet to come: Finding cool tenants and designing the space. It helped that Barth’s husband, Eric Barth, is co-principal of A Parallel Architecture, the firm that designed Paul Qui’s signature restaurant and a host of contemporary Austin homes.

Pretty quickly, Dai Due, Sugar Mama’s Bakeshop and Raven + Lily all came on board.

“I had a target list of who I’d like to see and what would succeed here,” Barth said.

She couldn’t believe how intense the interest was and how many other people insisted that they had tried to buy the property.

“It was funny because I know it sat on the market for at least a year,” Barth said.

The fortunes of Barth and her husband turned again when another retailer signed a letter of intent for the remaining space in the 6,500-square-foot building but it fell through.

The Barths considered the possibilities over a bottle of wine and pizza.

“We penciled out some ideas on a napkin,” Barth said.

They decided they would open Unit D Pizzeria, a wood-fired Neopolitan style pizza joint and wine bar, in the remaining 1,600 square feet.

Finding the right oven was crucial — and expensive. So how would she pay for a $10,500 piece of equipment? By being a contestant on “The Price Is Right.”

It wasn’t part of the business plan, but the trip to California and appearance on the TV game show just happened when family members took one of their own on a vacation — to forget about the pain of a relative’s bout with cancer and just to enjoy each other’s company.

Barth was the last contestant of the day and won.

“It was hilarious. Drew Carey was so funny. And my husband was crying,” Barth said.

The episode ran on April 10, 2015. Unit D Pizzeria opened July 23.

Barth didn’t disclose the amount of her investment in the property but it appears to have been a wise acquisition. When she purchased the property, it was valued at $451,002, according to the Travis Central Appraisal District. Last year, the appraisal had jumped to more than $1.9 million, county records show.

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Here’s how much UT will pay for its Houston land

miller The-University-of-Texas-Health-Science-Center-at-1DE07852From today’s Houston Business Journal:

The price tag has been revealed for the University of Texas System’s previously announced 300 acres in southwest Houston.

UT will pay $450 million over the next 30 years for the property, situated 3.5 miles away from the Texas Medical Center, the Houston Chronicle reports. The purchase price was just over $200 million, and the $450 million figure includes debt service.

The final price dramatically exceeds some experts’ predictions that the land would cost UT somewhere between $39 million to $65 million for the full 300 acres.

Chancellor William McRaven plans to make the campus an intellectual hub, one of the eight “quantum leaps” he announced in November. However, his plan has faced a great deal of backlash from University of Houston alumni and supporters who see the move as illegal or unfair competition.

Welcome Wilson Sr., former chairman of the UH board of regents and chairman of the UH Political Action Committee, recently issued this statement in an op-ed piece submitted to the Houston Businesses Journal:

“Competition is good in business. Competition is bad among Texas state agencies. A university is an agency of Texas. It creates unnecessary duplication and it wastes taxpayers’ money. The Texas Legislature created the Texas Higher Education Coordinating Board for the specific purpose of preventing such action. Will Texas universities continue to be coordinated, or will it be dog eat dog?”

UH Chairman and Houston billionaire Tilman Fertitta reportedly went as far as calling the plan the “most asinine thing I’ve ever seen,” and some UH law professors argued that UT’s plan violates state law. A UT spokesperson disputed that claim.

Despite the concerns, the system closed on its first 100-acre plot of land at the site earlier this week. McRaven has tasked a group to begin the planning phases for the new campus and will present his plan to the state’s higher education coordinating board on Jan. 21.

McRaven previously said that the task force will look to avoid duplicating programs and initiatives that other Houston schools and institutions are providing. Additional information>>>

Higher rents in store: Retail real estate development drops as Austin population soars

Miller austinskylineatnight 750xx2113-1192-0-114From today’s Austin Business Journal:

Austin keeps growing but the retail market doesn’t appear to be keeping pace. Less than 1 million square feet of new retail space was delivered in the Austin area in 2015 — a decline of 300,000 square feet from 2014.

The Weitzman Group released its annual retail overview report Tuesday and the market dynamics lead to one conclusion: retail space is going to keep getting more expensive.

Occupancy keeps inching upward and is now at 96 percent citywide, one of the tightest years on record.

“The 2015 construction remains notably low, especially for a market with such high occupancy,” the report states. The new deliveries are largely due to redevelopment, rather than ground-up retail projects.

The Oaks at Lakeway, a 175,000-square-foot neighborhood center on the west side anchored by an HEB Grocery Co. store, was an exception. The upscale market off RR 620 in Lakeway opened last fall with many smaller tenants currently moving as the project wraps up this year.

On the south side, Lamar Union on South Lamar Union also opened last year and continues to deliver final phases. North of the river, Lamar Central at 3800 N. Lamar Blvd. is an office and retail project, which is currently moving in new tenants — including Kendra Scott jewelry and Snooze, a breakfast eatery.

Next on tap in North Austin is Rock Rose at The Domain — about 100,000 square feet of new retail with strong local flavor. I wrote about The Dogwood opening there soon, along with many other familiar brands. A 123,000-square-foot Nordstrom department store is also under construction nearby.

Here’s a look at other highlights of the report:

Saks Fifth Avenue Off 5th will open this spring in 50,000 square feet at Gateway Shopping Center, 9607 Research Blvd.
Crystal Falls Town Center, a 94,000-square-foot Randalls grocery-anchored shopping center, is under construction in Leander. It’s scheduled to open in fall 2016.
Belterra Village, a retail project on 90 acres near U.S. 290 and Nutty Brown Road on the way to Dripping Springs, is slated to begin delivering retail this year. It could encompass nearly 300,000 square feet of commercial space.
Phase III of Round Rock Crossing at I-35 and State Highway 45 in Round Rock is scheduled to start this year, adding 90,000 square feet.
The highest lease rates currently are for tenants in new construction developments, commanding rents of between $35 and $40 per square foot.

Austin architects gain international acclaim with Gardner project

Miller gardner From today’s Austin Business Journal:

It’s been a particularly blissful holiday season for Austin-based Baldridge Architects, now that the firm’s work on Gardner, a new restaurant in an East Austin adaptive re-use development, was cited as one of the best interiors in the world by Architectural Record magazine.

The Gardner project was lauded right alongside much larger projects in New York, San Francisco, Washington, Milan, Italy and Essen, Germany.

“I did not expect this,” said R. Burton Baldridge, the Austin firm’s principal, who said it’s a little too soon to tell whether the international publicity will boost his firm’s prominence.

Gardner is Baldridge Architects’ first restaurant, though the firm has completed hospitality projects before — Kimber Modern hotel, for example. Earning the design assignment from restaurateurs Ben Edgerton and Andrew Wiseheart of Contigo fame was like a shot out of the dark, Baldridge said.

“We were not on their radar at all,” he recalled.

Keith Kreeger, a noted Austin-based ceramicist who knew all the parties involved, saw a fit and made the introductions.

Baldridge still isn’t sure why his firm procured the commission at the 11th hour, but an attitude of restraint and authenticity probably won the day.

“I told them we needed to find a way to be honest to the post office,” Baldridge said, being compelled to keep the basics such as the bricks and glass intact.

The design process was orderly and slow and the results are stellar in an understated way.

Baldridge came to the architectural profession in an offbeat sort of way. He attended the University of Texas and went to law school.

“It was a colossal mistake,” Baldridge said.

He decided to save enough money so he could return to college and become an architect. In due time, Baldridge was living in New York, so he landed at Columbia University.

Additional information>>>

Hundreds of affordable houses, new commercial projects set for Southeast Austin

mapFrom the Austin Business Journal:

Hundreds of new affordable housing options and more space for commercial projects are on the drawing board for Austin now that City Council has taken the final step to approve a new zoning designation for an undeveloped area of Southeast Austin.

The developer, Brookfield Residential, received final approval of its Planned Unit Development zoning at the Dec. 17 City Council meeting (the one where ride-hailing was debated into the early morning.) The new zoning allows the site to be developed with as many as 14,300 dwelling units and up to 4.6 million square feet of civic or commercial space, as well as 400 acres for parks and open space. Additionally, 200 acres are set aside to develop a mixed-use town center area.

The developer has committed to setting aside 10 percent of the owner-occupied homes to be affordable for a family making 80 percent of the median family income and set aside another 10 percent of the owner-occupied rental units over the next 40 years to be affordable for a family making 60 percent of the median family income.

The city has been working to get Pilot Knob developed for years now. Back in 2011, Austin City Council created the Municipal Utility District for the area to help raise funds for utility connections to the site.

Additional information>>>

On the market: Windy Point Park and a whole lot of memories

Windy pointFrom today’s Austin Business Journal:

A prime piece of Austin real estate is on the market — complete with colorful history, azure blue views and some of the best scuba diving access in these parts.

Windy Point Park is almost 12 acres on the shores of Lake Travis near Hippie Hollow — the nudists’ beach — and upwind from the Oasis development, where sipping cocktails on the terrace at sunset is a not-to-be-missed experience. Windy Point Park isn’t to be confused with the county’s beach-like Bob Wentz Park at Windy Point, though they are next to each other.

Additional information>>>

Urban Land Institute reveals finalists for development awards

Miller ULIFrom today’s Austin Business Journal:

The Urban Land Institute’s Austin District Council is gearing up for its annual awards program with a list of contenders for three development awards and the announcement that the second Vision Award will be given to Alan Graham, founder of Mobile Loaves & Fishes nonprofit and the developer of the unconventional Community First mixed-use project aimed specifically for the homeless.

This year’s ULI awards program is Jan. 13 at the new Hotel Van Zandt, 605 Davis St. Click on the photo with this article to see a slideshow of the finalists for the Innovation, Influence and Public Places awards.

The Innovation Award honors a project for innovative land use or community planning. The finalists are the 816 Congress Terrace, a rooftop garden and public space; 2400 Nueces, a student housing project in the West Campus area of the University of Texas; Denizen condominiums in South Austin; and Lamar Union, the mixed-use redevelopment of a premium site southwest of Downtown Austin.

The Influence Award honors a project for having a lasting effect on the built environment. The finalists are Dell Children’s Medical Center of Central Texas South Tower at Mueller; Dell Seton Medical Center at the University of Texas, the teaching hospital built alongside the new Dell Medical School; the redevelopment of the Seaholm Power Plant; and the new JW Marriott hotel downtown.

The Public Places Award honors a project for enhancing space for community use. The finalists are the Austin Independent School District’s Performing Arts Center at Mueller; Auditorium Shores, the public park facility on the south shore of Lady Bird Lake; the pedestrian renovations at The Domain master planned community in North Austin; and The Thinkery, the new children’s museum at Mueller.

The winners of each category will be announced at the January event along with a presentation honoring Graham’s achievements.

Read more and see slideshow>>>

Pedestrian mall, new buildings planned for area north of Capitol

capitol2014 600xx2500-1667-0-1From the Austin American-Statesman:

A long-envisioned pedestrian mall — along with a pair of new office buildings — is being planned for the area immediately north of the Capitol.

Back in the 1940 and 1950s, planners in state government imagined a tree-lined civic space among state office buildings that frame Congress Avenue in the blocks north of the center of state government. Now, officials with the Texas Facilities Commission are incorporating the decades-old vision in a master plan for the Capitol complex that runs generally from Trinity to Lavaca streets and from Martin Luther King Jr. Boulevard to 10th Street.

The first of three phases of the concept is slated to include three blocks of a walkable mall and two new state office buildings — along with nearly 4,500 new and much-needed parking spaces in five subterranean levels — to be completed by 2020 at a cost of $580 million.

State Sen. Kevin Eltife, a retiring Republican from Tyler, has worked on plans for the Capitol complex for the past four legislative sessions. In 2013, then-Gov. Rick Perry vetoed a concept that included two new office buildings because he wanted a full master plan to be created first.

Taking Perry’s cue, Lt. Gov. Dan Patrick dispatched Eltife before this year’s session to make sure the broad vision was put onto paper. And by the session’s end, a master plan was underway, and the Legislature had approved money for the first of three phases that included the pedestrian mall and the two new buildings.

“It’s an expansion of the Capitol complex that is long overdue,” Eltife told the American-Statesman.

One of the proposed buildings would go up on a parking lot across the street from the Bullock Texas State History Museum on the east side of Congress Avenue, and the other would be built closer to the Capitol, between West 15th and West 16th Streets.

The buildings would create about 1 million square feet of new office space in the Capitol complex and would drastically decrease the state’s annual lease payments on about 1.2 million square feet of leased office space in the downtown area. The new buildings will be capable of holding 3,600 employees, and, upon completion in 2020, the state would be able to retire up to 18 leases totaling $19.9 million annually, said Peter Maass, deputy executive director of the facilities commission.

Eltife added that the construction will be financed by non-voter approved bonds, and the money the state saves on rent will be redirected to cover the debt service.

Like home ownership, the state will be creating equity in the buildings and improvements, and it will own the new structures outright without any bond indebtedness after 25 years, Eltife said.

“We want to continue to create and build something that matches the incredible Capitol complex we already have,” he said.

The first phase still needs to be approved by officials with the General Land Office, the Texas Preservation Board and the Texas Facilities Commission.

Molly Alexander, associate director of the Downtown Austin Alliance, said she appreciates the vision for the area north of the Capitol.

Alexander and members of the alliance, a partnership of downtown property owners, individuals and businesses dedicated to maintaining the vitality of downtown, have been encouraged that state planners put so much thought into connecting the Capitol grounds with the rest of the city, including Waller Creek, the University of Texas’ new Dell Medical School and the UT campus.

“I was really impressed. I think it was extremely aspirational,” said Alexander, who added that she knew of no opposition to the Capitol plan. “I believe this is legacy building.”

State Sen. Kirk Watson, D-Austin, said that the state has an opportunity to make the area around the Capitol “as inviting as the statehouse itself.”

Officials expect final approval in March, and they hope to break ground in 2017.

The second phase, which would be several years away, could include two more buildings and even more space on the proposed mall, and the final phase could involve even more office buildings and additional green space.

Decisions on the latter phases will be made later.

“The master plan lays out a vision for transforming state properties in a way that will make all Texans proud while also supporting the functions of state government in a cost-effective manner,” Watson said.

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