Downtown Austin’s Least-Loved State Offices Could Be Bound for Auction

A 2010 photo of the Hobby Building at 333 Guadalupe Street — the skyline behind it has changed quite a bit since then, but this particular building certainly hasn’t. Image: Wikimedia Commons

The Texas Facilities Commission is sailing clear through the Texas Legislature with its plans to sell the Hobby Building state office complex at 333 Guadalupe Street. On Wednesday, the Texas Senate placed the acting legislation regarding the building’s sale, SB 1394, on its uncontested calendar. When the bill was first heard in committee on April 2, no one spoke in opposition.

The bill sponsor, Austin Democrat Kirk Watson, had nothing but disparaging comments about the 35-year-old complex.

“The Hobby Building complex in downtown Austin is–to use well-chosen words–an embarrassment. It’s expensive to maintain. It has many unresolved ADA and health safety violations . . . the Facilities Commission estimates immediate deferred maintenance needs could cost $49.6 million to address and has requested $19 million for the coming biennium to tackle the most urgent of needs, while maintaining building operations,” Watson told the Business & Commerce Committee.

According to Watson, a condition of the future sale is that the proceeds will be spent within two years, in order to be eligible for tax exempt status. This comports with a rider the Senate Finance Committee adopted in late March, which directs the building’s sales proceeds to be used for the construction of the new Capitol Complex.

In its bill analysis, the Senate Research Center mentioned the Hobby building was constructed in the early 1980s, when building technologies and standards were “significantly less demanding than today.” But despite the knocks against it, the complex sits on prime real estate. The companion House bill requires that a local government entity shall have the first option to purchase, and states “the School Land Board shall have the second option to purchase.” If there are no public entity buyers, it will be auctioned.

A map of the Hobby complex in downtown Austin. Image: Travis County Appraisal District

The Hobby Building occupies a full city block of almost 1.75 acres, and actually contains three office buildings, with a combined total area of 395,472 square feet. At its highest point, it rises 14 stories.

This is no discount surplus sale, either — the Facilities Commission wants a fair market value price. The complex has an assessed value with the Travis County Appraisal District of $80.6 million.

Even with a successful sale, there remains the matter of what to do with the 20 or so state agencies that will have to move out of the complex — according to TFC estimates obtained by Strategic Partnerships Inc., replacing the Hobby could cost about $152 million.

Assuming a bill authorizing the building’s sale or auction gets to the governor’s desk — and the likelihood appears very strong — change is on the way for the Hobby. The real question is, if the aging structure’s going to cost so much to fix, would a private developer prefer demolition? Considering how unified Austinites seem in their dislike of the complex, that may be cause for celebration.