Grayco partners of Houston has been assembling a mammoth parcel of land on Riverside drive — just East of I-35 — for a development that was originally planned to encompass 50 acres, as many as 2,150 apartments and condos, and as much as 450,000 square feet of commercial space.
Despite the financial crisis which has depressed development in Austin and across the country, Grayco this week announced it’s intentions to proceed with large scale development of the site. Under the revised plans, Grayco will replace a 30-year-old 1,000-unit apartment complex with as many as 1,380 new Apartments, condominiums and townhomes that will be priced from the low $200s with rents for the apartments starting at $1,100 per month. The new project will encompass 30 acres and will also include as much as 97,000 square feet of retail, commercial, and restaurant space. The project is slated to begin construction in early 2009.
The most notable element of this project is its scale: Grayco’s plan seems to be to create an entire district, a whole new neighborhood to attract residents to this emerging near-downtown market. While the final plans have not been released — and the developers have hinted that the final proposal may be less urban — the scale of the project is certain to remain large.
For those who have been anxiously watching the broad redevelopment of downtown Austin and worrying about the effects of the current crisis, this project reminds us of the strong long-term fundamentals of the downtown market. For developers who take a long-term perspective, the market remains attractive. With strong population growth, limited downtown housing, and a sizable population of people who want to live downtown, long-term demand should be strong for reasonably priced condo and rental units.
Renderings of Grayco’s Riverside Project as Originally Planned
Here is a summary from the Statesman:
The economic downturn hasn’t derailed plans for the biggest redevelopment project proposed along East Riverside Drive.
But talk among city leaders about the possibility of running light-rail service from downtown to the airport has caused the developer to postpone planning for a portion of the project.
Houston-based Grayco Partners is moving forward with most of its proposed 30-acre project between Riverside and South Lakeshore Boulevard, where it plans to replace blocks of aging apartments and retail strip centers with a dense district of townhouses, condominiums and higher-end retail.
But the developer has decided to remove nearly 10 acres along Riverside from its initial rezoning request to the city to see if the proposed rail line championed by Mayor Will Wynn and Council Member Brewster McCracken will become a reality.
City leaders have encouraged dense development around rail stations along the commuter rail line scheduled to open next year.
They think so-called transit-oriented development can accommodate large numbers of people without adding substantially more traffic to the city’s congested streets. They also hope that these mixed-use developments will generate more tax revenue for the city while costing less to service than more spread-out, single-use development.
A rail line along Riverside would be more ambitious than the initial commuter rail line because it wouldn’t run along existing tracks.
ROMA Design Group, a consultant hired by the city to develop a downtown plan that includes transportation, has recommended running a line from the old Mueller airport property through the University of Texas and downtown and then out Riverside Drive to Austin-Bergstrom International Airport.
ROMA estimates the 15.3-mile line would cost $550 million to $614 million to build and $21 million to $23 million a year to operate. . . .
Grayco initially sought approval to build as much as 450,000 square feet of retail. Most of that would be built near and along Riverside Drive. With that property excluded from the current rezoning request, Grayco is seeking to build about 97,000 square feet of commercial, retail and restaurant space, along with up to 1,380 residential units.
Grayco’s attorney Steve Drenner said a rail station near the property wouldn’t necessarily result in greater density near Riverside, but the developer didn’t want to move forward with the costly and time-consuming planning of that portion of the property without knowing what city leaders would want to see built there.
“We don’t know whether the city would want us to be a transit-oriented development or what type of retail mix use they might want to see along there,” Drenner said. “Rather than try to guess at it and convince the city that was the appropriate way to go we thought we’d take that out of the zoning case.”
McCracken said Grayco has discussed two versions of that portion of the project with him, and the developer was leaning toward a more traditional suburban design in the absence of rail service.
Drenner said the slowdown in the real estate market had nothing to do with the decision and shouldn’t affect Grayco’s goal to begin construction in 2009 because the developer planned to build the townhouses and condos along and near Lakeshore Boulevard first.
“We didn’t have to have a decision about the frontage in order to proceed with first phases,” Drenner said.
But Grayco has decided to indefinitely postpone buying 20 additional acres from Cypress Real Estate Advisors. That property, just east of Grayco’s land, will be allowed to have 1,000 attached residential units.