An announcement last week that the State of Texas is working with the City of Austin to redevelop the long-suffering state office complex known as the Hobby Building, located on a full downtown Austin block at 333 Guadalupe Street, was barely news — the building lost its population of state employees for greener, less rat-infested pastures at the Capitol Complex last year, and once fences went up around the vacant site we went ahead and eulogized the misunderstood structure nine months ago.
Long story short, the Hobby Building was a genuinely forward-thinking piece of architecture that never quite received a fair shake during its 37-year lifespan due to the bad timing of the project’s completion in 1986 with the financial challenges of that era’s Savings and Loan Crisis, and the state’s purchase of the complex out of foreclosure in 1990 resulted in three decades of deferred maintenance transforming the building into the public laughingstock it is today. “Rats!” is what you might say.
But what was interesting about last week’s joint announcement by the Texas General Land Office and Austin Mayor Kirk Watson was the assertion that the Hobby site would be redeveloped as workforce housing, which in Austin is a buzzword typically used to describe residential development priced at rates affordable to households earning between 60 and 100 percent of the metro’s Median Family Income — in 2023, that translates to an individual earning between $49,080 and $85,600 per year; or a household of four earning between $70,080 and $122,300 per year.
We have to wonder about the economics of this concept, since building a market-rate project at such a valuable site would generate more funds that could in turn create considerably more affordable units on less expensive land elsewhere — but the equity issue of including on-site affordable units in downtown projects rather than building them somewhere out in the sprawl is also a concern when we’re talking about affordable income targets that could house teachers, nurses, and service industry workers employed in the central city. Here’s an excerpt from the mildly goofy General Land Office press release, which might raise your eyebrows a couple of times:
Austin — Today, Texas Land Commissioner Dawn Buckingham, M.D. announced the General Land Office’s (GLO) historic undertaking to transform the Hobby Building into substantial workforce housing. Commissioner Buckingham was joined by Austin Mayor Kirk Watson as she presented the GLO’s solicitation for this momentous endeavor. The state office building, located at 333 Guadalupe Street, will hopefully provide additional amenities that downtown residents need such as childcare, parking and retail spaces.
“I have one metric by which we at the General Land Office take action and judge our success: serve the people you are supposed to serve and do it well. That is why I am pleased to present qualified investors and developers with a unique opportunity to collaborate with the GLO on the historic redevelopment of the Hobby Building into workforce housing for Austin families,” said Commissioner Buckingham. “Anytime the state can come together with the City of Austin and work collaboratively for the benefit of its residents, we all win. This project will seek to serve those who provide critical services to the community, including our hardworking teachers, steadfast police officers, valiant firefighters, dedicated government workers and many crucial healthcare providers.”
— State of Texas General Land Office
Mega-brokerage CBRE is offering the Hobby site to investors and developers on behalf of the state, and the firm has cooked up some marketing materials that show the tremendous potential of the property — it’s a full block completely unencumbered by Capitol View Corridors or other constraints, and could support nearly 2 million square feet of mixed-use development according to these concepts, which show off an eye-popping supertall building containing more than 100 floors:
The size and location of the property offer a unique opportunity to develop a mixture of high quality uses on the site. While the owner is interested in all offers from qualified developers, there is a specific interest in providing transformational workforce housing within the overall project. The owner will consider more creative transaction structures, such as a joint venture partnership, to help achieve a higher level of workforce housing within the project.
The presence of a hotel, office space, and retail in the concept seen above could presumably help subsidize its unknown quantity of affordable housing units, although it’s hard to imagine any developer pitching office space in a plan for the site anytime soon. If anything, the new Hobby partnership just offers more questions. How many affordable units could this site support? How can we stop a project here from having 16 floors of above-ground parking? Can we find new homes for all the rats?