Texas' capital city is poised to convert a 19th century residential neighborhood into a 30-acre addition to its Central Business District, and two high-rise projects are leading the way.
In October, High Street Residential Inc. announced plans to construct The Shore on Town Lake, a 22-story residential condominium overlooking a section of the Colorado River that marks the southern edge of downtown Austin. High Street is a wholly owned subsidiary of Dallas-based Trammell Crow Co. Nearby, Grand Prairie, Texas-based Fairfield Residential is midway throughof the 13-story Milago Condominiums, set to deliver its 240 residential units next summer.
While Fairfield's site came with downtown mixed-use zoning acquired by a previous owner, the High Street Residential project would not have been possible before a district-wide rezoning that took effect in April. That action extended Central Business District zoning — the highest density available — to 30 acres long known as the Rainey Street Neighborhood. Dubbed the Waterfront District in the rezoning, the triangular area is bordered by the river, Interstate 35 and Cesar Chavez Street.
“The Waterfront District is unique because the applicant in this rezoning was the City of Austin,” says Jamil Alam, a principal in Trammell Crow's Austin office. “This was the city recognizing that this area had been ignored for 20 years.”
Before the rezoning, most owners were reluctant to reinvest in their residential properties but were unable to sell those lots for more lucrative commercial uses. “Uncertainty was really killing the place,” says Craig Nasso, an architect who lives on Rainey Street. “The area has been stagnating for a long time and a decision needed to be made.”
Nasso had hoped to see more planning for his neighborhood by the city, with a greater emphasis on preserving some of the finer homes. On the other hand, Nasso says, the rezoning includes some planning elements that will guide development.
To qualify for building heights above 40 feet, for example, developers must include a collection of pedestrian-orientedelements to encourage foot traffic in a live-work-play environment. Greater density also is allowed if developers make some residential units affordable to those with incomes below 80% of the local median — $39,800 a year.
“The market is going to create something that's fairly close to what a master plan would have created,” says Kevin Burns, principal at Urban Space Realtors, which markets Milago Condominiums' units. “Anything that's developed, just because of the price of the land, is going to have to go vertical.”
Urban Space has sold 226 of the Milago's 240 available units, which range in price from $156,000 to $800,000 and vary in size from 750 sq. ft. to 2,418 sq. ft. The waiting list exceeds 400. “We could have sold this building three times over,” Burns says.
Austin City Manager Toby Futrell says the rezoning effectively expanded the Central Business District with new land for ground-up, mixed-use and residential development. “You don't get many opportunities for this level of development, in a premiere city, near a burgeoning downtown.”
What the Waterfront lacks is one or more developers to pilot redevelopment efforts, says Robert Knight, president of Knight Real Estate. Knight and Perry Lorenz, an Austin investor, own about 40% of the Waterfront District, and Knight has listings to sell another 40% of the private lots. The partners championed rezoning for more than a decade, but are not experienced in large-scale development.
Knight is optimistic that other developers will recognize opportunities in the Waterfront District, thanks to the long-awaited rezoning. “Who says they're not making any more dirt? We just did.”