The one-acre former headquarters of the Texas Municipal Retirement System, a state pension program providing retirement and disability benefits to municipal employees in hundreds of Texas cities, could soon be up for grabs. The program relocated its operations to a new office building at the recently-opened Grove development in Central Austin late last year, leaving the future of its old office space near the corner of East 12th Street and the I-35 Frontage Road in question — though it’s pretty clear the pension isn’t trying to hang on for too long.
A view of the old TMRS headquarters from the I-35 frontage road looking west. The older, delightfully brutalist building at the site is in front, with the newer office and parking structure behind.
Discussion at meetings of the TMRS Board of Trustees late last year indicate that the organization’s executive director is authorized to take all steps necessary to place the property at 1200 North I-35 on the market for sale, with the proceeds to be reinvested in the pension fund at its assumed 6.75 percent rate of return. A report presented to the board states that depreciation expenses on the old building were estimated at $306,000 in 2021 — and with the system’s lease on its new offices at the Grove exceeding its operating budget by $2.3 million, the fund plans to offset the cost of its relocation through investment earnings from the sale of its former headquarters.
In anticipation of a sale, according to a permit filed earlier this week by land use law firm Drenner Group, the system is now seeking a rezoning from the City of Austin, changing the property’s existing general office and neighborhood commercial (GO-LR) classification to a more appropriate central business district (CBD) zoning, which would allow for denser development at the site by a new owner. Unlike many properties in this area, the land is fully unencumbered by Capitol View Corridors.
The old TMRS headquarters includes a 1970s-era office building and surface parking lot on the east half of the tract facing the highway, with a newer office and parking structure built in 2005 on the west side of the property at the corner of East 12th and Sabine Street. Though a prospective new owner could always clear the site for redevelopment, the newer building on the west side might stick around — owing to the size of the property, demolishing the older office building and surface parking closer to I-35 would provide more than half an acre for a new project. Still, we’re not ruling out that the value of this tract could prompt its new owners to demolish a building that’s only 17 years old, even if that sets a new local record.
A new owner could also simply use the property as-is, but its location seems to imply more future value — the offices are directly south of the property previously home to Brackenridge hospital, now being reimagined by a partnership of Central Health and the University of Texas Dell Medical School into a 14.3-acre planned unit development with a variety of uses anchoring downtown Austin’s so-called “Innovation District.”
The Central Health site’s first tower — to be known, by the way, as “Innovation Tower” — is topped out and nearing completion just north of the old TMRS building, with additional neighbors including the former 1.7-acre HealthSouth tract, where developer Aspen Heights Partners is planning a two-tower project containing residential and office uses along with a possible 100 units of affordable housing and retail space. Then there’s the defunct Brick Oven Pizza at 1209 Red River Street, which for years has been expected as the future site of a hotel project known for now only as Waterloo Park Tower — which, as you may have gathered from the name, is directly across the street from the reopened Waterloo Park that anchors this entire emerging district. It’s a lot to follow, and the Central Health project anticipates a buildout that could take up to 15 years, but there’s clearly lots of potential in this area.
There is one catch, however — according to current maps of TxDOT’s planned expansion of I-35, the TMRS property might lose a tiny sliver of its land along the corner of the frontage road and East 12th Street. It doesn’t appear to reduce the size of the tract at all and shouldn’t stop a building from rising here, but it’s the kind of thing a future developer would need to keep in mind. Don’t we love our highways, folks?