After McKalla Place stadium fight, several city-owned properties are poised for new life

After McKalla Place stadium fight, several city-owned properties are poised for new life

Mueller, Seaholm, Colony Park and McKalla Place are vastly different places spread out across Austin.

But they have common roots as public land with a new lease on life through City Hall’s redevelopment efforts.

Mueller and Seaholm were transformed from a municipal airport and a decommissioned power plant, respectively, into mixed-use destinations. Mueller’s master developer, Catellus Development Corp., is poised to develop Colony Park in Northeast Austin into a master-planned community with thousands of homes.

And a pending deal for McKalla Place, a 24-acre tract in North Austin on the edge of The Domain, could soon give rise to a soccer stadium for Austin’s first major-league sports franchise.

So what’s next for the city’s real estate portfolio?

It’s a conversation that will linger long after this summer’s debate over Major League Soccer in North Austin fades into history because there are 13 more sites on the table.

And it’s an increasingly relevant conversation, to developers and taxpayers alike, as the city tries to use all its tools, including the dirt it owns, to address simmering issues like home unaffordability, vanishing creative space and gentrification.

“It is our obligation to make sure that our city-owned lands are used for the highest value,” Mayor Pro Tem Kathie Tovo said.

‘Highest maximum potential’

The city’s redevelopment process tends to focus on repurposing underused or decommissioned land.

"We use real estate to collaborate with the private sector to create development that results in community benefits,” said Christine Maguire, the city’s redevelopment division manager. “It’s about how real estate can leverage community benefits… and City Council strategic goals.”

She said the "North Star" guiding that effort are directives such as the 2012 Imagine Austin Comprehensive Plan.

"There’s also the real needs and aspirations of the community in real time," she said.

At this time, that means city-owned land is looked at for its potential for affordable housing, creative space for artists and health care opportunities "in areas of our city that have been traditionally ignored," Maguire said.

An Aug. 3 memo from city staff identified these four properties as the most ripe to go through the redevelopment process:

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This Austin Energy property at 6909 Ryan Dr. — though they call it the Justin Lane tract because it’s also off that road — has access to commuter rail. It’s near where Airport Boulevard intersects with North Lamar Boulevard.

Arnold Wells / Staff

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This site sits on more than 20 acres formerly used by a Home Depot and car dealership. It’s at 906 E. St Johns Ave. just off I-35 near its intersection with U.S. Highway 183.

Arnold Wells / Staff

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Farther into East Austin, at 4800 Bolm Road, sits this former site of a recycling plant begging to be cycle into a new use itself.

Arnold Wells / Staff

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Here’s another prime site in East Austin. This one, at 2201 Grove Blvd., is near Riverside Drive and just a couple of minutes away from the airport. The land that will be available is only a portion of this photo and includes some of the wooded area.

Arnold Wells / Staff

"We’re going to move [on] the first group that has the highest maximum potential," Maguire said.

Maguire cautioned there’s a lot of due diligence the city needs to perform by analyzing those sites at a "fine-tooth level" over the next several months.

"It is really doing our homework on any physical, regulatory or legal constraints on the property," she said.

‘So much opportunity to have an impact’

But that’s not all.

Local experts with the Urban Land Institute conduct research on topics relevant to affordability in Austin, such as the city’s permitting processes and employer-assisted housing. This spring, they began researching the development of affordable housing on government property.

As the subject of their study, they used five city sites that were highlighted for their development potential in a March report to Council. In addition to Justin Lane, McKalla Place and Home Depot/Chrysler, they looked at the HealthSouth building at 1215 Red River St. and the Winnebago tract at 4711 Winnebago Lane.

Paulette Gibbins, the executive director of ULI’s Austin chapter, said they wanted to analyze sites through their proximity to transportation, job opportunities and food and education options.

"For an affordable project to really be affordable, being able to have the cost of the land taken out of the equation… really makes these affordable projects happen," she said. With "building on government land there’s really so much opportunity to have an impact."

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Paulette Gibbins is executive director of ULI Austin.

Arnold Wells/Staff

HealthSouth, a former physical rehabilitation center near the old Brackenridge hospital, was identified as the site with the highest opportunity due to its location and ability to capitalize on low-income housing tax credits.

"Let’s face it, there’s not many [affordable] places available downtown," Gibbins said.

In its March report, the city identified more long-range options, such as the One Texas Center surface parking lot at 505 Barton Springs Road or 411 Chicon, an East Austin parcel near the Plaza Saltillo MetroRail station where the city’s building services department is located.

City-owned property along RR 2222, FM 812, Johnny Morris Road and East William Cannon Drive were also floated as long-term development opportunities.

But don’t hold your breath.

"It may be a decision by the city to never let go" of those properties, Maguire said.

‘Recognize how capital looks at Austin’

The desires of area residents will play a role in the city’s deliberations.

Maguire said they want to continue community engagement work already started by some on City Council, such as Leslie Pool with the Justin Lane property and Greg Casar with Home Depot/Chrysler.

"We want to build upon that… and not supplant that great work," she said.

The site’s constraints and community feedback would be packaged into a competitive solicitation process like a request for proposals, Maguire said.

There’s a sense of urgency among city officials to redevelop city land to address affordability issues while Austin’s economy remains healthy.

Maguire said the city needs to take advantage of Austin’s "smoking hot market." Put simply, it’s relatively easy now to attract real estate interest from across the country and overseas.

Consider this: Earlier this year, for the first time, the Texas capital broke into the top 10 cities to invest in the Americas in an annual survey from CBRE Group Inc.

The report said investors are “racing to find the next Seattle by increasing their focus on the higher-yield potential of high-growth secondary markets” — and Austin is one of them. Austin tied with Toronto, Canada, as the 10th-most desirable place to invest this year.

"It’s an international city and we need to be able to recognize how capital looks at Austin," Maguire said. "We’re in a very strong position and we need maximize that strong position… particularly in places that haven’t seen that investment before."

While professional sports may not be on the horizon with other city properties, Maguire hopes community feedback and passion from the McKalla Place debate will stick around moving forward.

"I really hope that continues for every… opportunity that the city has," she said. "It’s really a challenge if nobody cares."

After the four sites outlined above, city officials have ID’d these tracts as being next in line for a revamp.

• 1215 Red River St.

• 4711 Winnebago Lane

• 411 Chicon St.

• 10900 RR 2222

• 5101 Johnny Morris Road

• The One Texas Center surface lot at 505 Barton Springs Road

• 5400 E. William Cannon Dr.

• 10108 FM 812

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