Demolition Pending For El Mercado Building at 17th and Lavaca Downtown

Image: City of Austin

A permit filed with the city this week indicates the pending demolition of the buildings located at West 17th and Lavaca Streets in downtown’s growing northwest corner — most notably including the former home of the longtime El Mercado Uptown restaurant at 1702 Lavaca Street, which shuttered last year after nearly 30 years of business. Although the buildings at the corner date back as far as 1883, the Historic Landmark Commission determined last year that their extensive modification over a lifetime of more than a century rendered the structures ineligible for historic status.

It’s another classic case of “not historic, just old,” but the El Mercado building is still a bittersweet reminder of a previous life on this street. Alongside the similarly-aged retail strip centered around the iconic boot sign of the former Capitol Saddlery building one block south from here, the structures on this stretch from around the turn of the 20th century are some of the only evidence remaining that this part of downtown once supported a thriving commercial district, enabled by the streetcar line that ran along Lavaca Street from 1875 to 1940.

The structure formerly home to El Mercado opened in the early 1900s as Haenel’s One Price Cash Store, run by German immigrants Emil and Mary Haenel, selling groceries and farm tools. Image: Austin History Center

Since we tore out the tracks in favor of more space for cars and largely replaced this area’s retail space and housing with state office buildings and parking garages during the roughly 80 years since, it’s easy to forget that roughly a century ago, this used to be a place — back then, Austinites weren’t so obsessed with naming their neighborhoods, but this region was still occasionally described as “Uptown,” a name that survived the end of the streetcar era with businesses like Jorge’s Uptown Enchilada Bar, which operated out of the El Mercado space from 1978 to 1996. El Mercado itself kept the Uptown label to distinguish the Tex-Mex joint from its other locations, but these days the term is rarely used — although we’ve seen it increasingly used to describe the area around the Domain, which feels a little weird. 

A map of Austin’s electric streetcar lines in 1925. Image: Not Even Past

While we’ve heard from our super-secret industry sources that the demolition of buildings on this corner is definitely expected in the near future, what’s less clear is the development planned here. Alongside the El Mercado corner, the two adjacent buildings to the north at 1710 and 1712 Lavaca Street were also purchased in 2022 by entities associated with Corpus Christi-based developers Raju Bhagat and Ajit David of RGB Hospitality, which has built a number of hotels in South Texas occupied by mid-range brands like Aloft, Home2 Suites, and Tru by Hilton.

Image: City of Austin

It’s notable that the site’s new owners could be building a hotel directly north of the relatively recent Hilton Garden Inn hotel tower at 301 West 17th Street, and directly west of the Hampton Inn & Suites at 1701 Lavaca Street. Will we see three hotels at essentially the same corner? Developer Ajit David was coy with the Statesman about this last year, indicating that a combination hotel and condo project was possible — we’ve got nothing against hotels, but the housing part interests us a little more. What’s really important is that all of these projects include some sort of ground-level retail use that’s appealing to the public, so we can slowly claw back the interesting street life of the former Uptown neighborhood from its current sleepy situation.