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City still wrestling with development plan for prime site on Lady Bird Lake

Shonda Novak
Austin American-Statesman
The site that formerly housed the Austin American-Statesman offices is slated to be transformed into a large mixed-use project by the Cox family and Endeavor Real Estate Group. [SOM (Skidmore, Owings & Merrill)]

After little movement during the pandemic, the zoning case destined to transform the former home of the American-Statesman's offices is winding its way through the review process again, with its next scheduled stop Jan. 25 before the city's Planning Commission.

Known as the Statesman PUD (for planned unit development), Richard Suttle Jr., the attorney for the developers, recently made a procedural move at City Hall that jump-started getting the zoning case onto the Planning Commission docket.

The zoning application for the nearly 19-acre prime waterfront site seeks to allow up to 3.5 million square feet of new development on the site, potentially in six or seven high-rise buildings (3.5 million square feet of space could fill about seven Frost Bank Towers).

Located at 305 S. Congress Ave., the property long has been one of the city's most coveted redevelopment sites. The property sits at the foot of the Ann W. Richards Congress Avenue Bridge and backs up to Lady Bird Lake and the Ann and Roy Butler Hike and Bike Trail.

The Atlanta-based Cox family — former owner of the American-Statesman — owns the property and is working to redevelop the site in partnership with Austin-based Endeavor Real Estate Group. The Statesman's offices were on the site since 1980, before moving recently to a location in Southeast Austin near the airport. The existing building on the property will be demolished.

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'A complex and important case'

Under the developer's zoning request, about one-third of the property would be dedicated to parkland and Barton Springs Road would be extended across Congress Avenue through the site.

In addition, 95% of the parking would be underground, which would be a "very huge get" for the city, Jerry Rusthoven, the city's chief zoning officer, told the Planning Commission at a recent meeting.

"Walking down the hike and bike trail, no one wants to have the lake on one side of them and the wall of a parking garage on the other," Rusthoven said.

In a presentation at the same meeting, Suttle showed a video highlighting the attributes of the proposed development. The video touted the project as "a new destination for the entire city," with places to work, shop and dine. There also will be more than seven acres of public parkland, and improvements and expansions to existing paths and trails.

"This is a complex and important case, but it's an easy case because we have so much to work with," Suttle told the Planning Commission. "There are so many community and public benefits we can get out of this case."

 Rusthoven, with the city's Housing and Planning Department, said that given the prominent location of the Statesman site at South Congress Avenue and Lady Bird Lake, "this must be one of the most important projects I have worked on in my time as a city planner here in Austin."

"If the development is approved over a third of the property would become dedicated parkland along the waterfront at no cost to the city," Rusthoven said. "Additionally land for the extension of Barton Springs Road and to facilitate a Project Connect rail station are being provided by the developer."

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Enhanced bicycle and pedestrian facilities, affordable housing, and an improved area for bat watching also are included in the proposal, Rusthoven said.

"The requirement that 95% of the parking be located underground is a real win from an urban design perspective," Rusthoven said in an email. "The last thing I would want to see as a city planner are parking garages along Lady Bird Lake."

Questions and concerns abound for Lady Bird Lake development

Planning commissioners and others, however, are still wrestling with a number of questions and concerns about the development proposal.

One of the questions is whether the site should have more below-market price housing than is currently proposed. The amount of affordable units now stands at 4% for the rental housing that would be included — a number some Council members and others want to see raised —  and a fee-in-lieu for ownership housing, an option some neighborhood activists oppose, contending developers should be required to build the moderately priced housing on site.

Another question is whether the developer should shoulder a larger share of the cost for community benefits, such as increased parkland and other public improvements, that the city wants to see in the area along the lake's south shore, which is known as the South Central Waterfront.

Several civic and community leaders who have been involved in the waterfront plan say they think the developer of the Statesman site "seeks to take advantage of the benefits of the plan without giving back fully in community benefits or superior design."

"Please hold this applicant to the same lofty standards as the plan asks for on the most important site in the Central Austin area," the leaders, including three former members of the South Central Waterfront Advisory Board and one current member, wrote in a letter to zoning and planning commissioners in October. "As we promote density in this area, Lady Bird Lake, housing for all, usable parkland, safe and shared streets, and consideration of the contribution of citizen volunteer concerns are too important to compromise on."

City officials say basics of the planned project have remained unchanged since the zoning case was initially proposed before the coronavirus pandemic. 

Developers envision a project with 1,378 residential units,1.5 million square feet of office space, 150,000 square feet of commercial/restaurant uses and 275 hotel rooms.

Heights for the proposed towers would range from 200 feet on the east side of the tract and up to 525 feet closest to Congress Avenue.

It's the largest redevelopment project planned to date in the city's new South Central Waterfront district, and consequently the site from which the city hopes to gain the most public benefits under a plan to guide development along the lake's southern shore.

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Under the city's master plan for the south waterfront area, developers would have to make contributions to the "public realm" — parks, streets, trails and housing units offered at below market prices — to gain additional height and density allowances for their projects.

The city has approved a special financing tool known as a tax increment reinvestment zone that, if funded, would help pay for the cost of some of the hoped-for community benefits, although details remain to be worked out.

The Austin City Council will have the final say in the zoning case. A date for a hearing before the council has yet to be scheduled.

The site that formerly housed the Austin American-Statesman offices is slated to be transformed into a large mixed-use project by the Cox family and Endeavor Real Estate Group. As part of the redevelopment, developers envision an enhanced area for viewing the Mexican free-tailed bats that fly out from under the Ann W. Richards Congress Avenue Bridge.

Housing and affordability

In a December meeting, City Council Member Kathie Tovo said she is committed to seeing that the city seize the opportunity to ensure that lower-cost housing units are included as part of the overall plan for the South Central Waterfront area.

"We need to make sure it develops correctly, and in a way that all of Austin can benefit," Tovo said at the meeting. "One of the key components is to make sure we have affordable housing built in this area."

Tovo told the Statesman she thinks the affordable housing contribution on the Statesman site should be higher.

"The South Central Vision Plan calls for 20% of all housing in this area to be affordable, so setting the percentage at 4% for one of the larger pieces of property in this area doesn’t advance us far enough toward that goal," Tovo said.

Tovo said she supported creating tax increment refinancing zone because of its ability to provide "community benefits that we need and wouldn't get otherwise."

As for the Statesman PUD itself, Tovo said it's not clear if it meets the requirement for PUDs, that any development that is planned must be "superior" to what could be built under existing zoning. "Right now, it’s hard to tell whether the Statesman PUD meets that standard — and whether the proposed community benefits are sufficient given the request to really substantially increase entitlements on the site," Tovo said.

In addition, Tovo said she's "also looking closely at what the Statesman redevelopment proposes to do along the shoreline because the developers are requesting to remove trees and to increase the concessions and uses allowed in that sensitive space."

 Tovo said she sees areas for improvement as the plan moves forward.

"Lady Bird Lake belongs to the whole community," Tovo said, "so I think it’s important to continue to have pedestrian and bike access from Congress Avenue so people can get to the hike and bike trail easily."

So far, the developer "is resisting maintaining public access to the parkland from the Congress bridge as recommended by all the boards and commissions reviewing this case to date," Planning Commiss chairman Todd Shaw said).

At a recent City Council meeting, Council Member Ann Kitchen agreed that "the area needs to deveop in a way that's for the whole city."

"We've seen too much development occuring in our city that doesn't benefit everyone," Kitchen said.

The Planning Commission has formed a working group to review the case and recommendations from other boards and commissions that have been briefed on the rezoning.

Last month, Shaw said he would like to see the zoning proposal include more below-market housing, as well as additional contributions to parkland, park amenities and long-term maintenance. Shaw said the actual credited parkland contribution for the site is 4.4 acres, which he said is "much less than the 9.6 called for in the South Central Waterfront Vision Framework Plan."

"Although never expected that they would have to pay for all of the parkland improvements, the applicant could do so much more to enable the city to realize the public’s vision for this area, so unique and special to Austinites," Shaw said.  

Shaw said that if the developer "is granted the large increases in building square footage and height, they should surely be expected to increase the (percentage) of affordable units and with deeper levels of affordability."  

The Austin American-Statesman's offices were on the property at 305 S. Congress Ave. from 1980 until late last year, when the newspaper relocated to a site in South Austin.

Austin faces a balancing act with development plan

Jennifer Mushtaler, another Planning Commission member, said a number of the public benefits being proposed as part of the rezoning "present a very exciting and rare opportunity for an important piece of Austin property."

But she said a balancing act is involved.

"It is also a complex situation in which we need to balance desired public green space, water resources and species conservation with the property owner's existing rights versus requested entitlements," Mushtaler said.

For several years, the city has been working on an overarching plan to guide new development south of the lake directly across from downtown.

In 2019, Mayor Steve Adler told the Statesman: “I’m generally supportive of density and height in the South Central Waterfront Plan area, similar to what we have downtown across the river, especially if it drives permanent residential affordability, significant park areas and other community benefits."

At a Planning Commission meeting last month, Paula Kothmann, a board member of the South River City Citizens’ Neighborhood Association, said the group — which represents about 5,000 households — agrees that Austin needs more affordable housing, "especially close to large employers to help cut our traffic congestion."

"People earning 50% to 60% of median family income flee our city because of lack of affordability,"  Kothmann said.  She said the group's possition is that 20% of the units in the project should fit into the affordable housing category, and that "other developments such as boardwalks and climbing walls should not be considered an alternative to building on-site affordable housing."

"I’m excited by much of this project, but I don’t think that the benefits offered are commensurate," Kothmann said. "Warning: if the city does not negotiate well on this tract, all the other tracts in this district will demand similar extra capacity."