Image: Texas Growth Fund / Aspen Heights Partners
The 1.73-acre city-owned downtown property at 1215 Red River Street, formerly home to the HealthSouth Rehabilitation Hospital, is the lesser-known cousin of the significantly larger Central Health redevelopment next door — the latter project’s bringing a roughly 14-acre planned unit development with commercial and residential uses under the auspices of the University of Texas and Dell Medical School’s “Innovation District” branding to the former home of Brackenridge Hospital over 10 to 15 years.
But despite its lesser size, the HealthSouth project’s current planning phases have caught more headlines lately due to efforts by some members of Austin City Council to extract more affordable housing from developers Aspen Heights Partners, who won the contract for the site’s mixed-use redevelopment last year. Negotiations are reportedly still ongoing, with Council voting earlier this summer to kick the can down the road until its upcoming September 29 meeting, but it’s clear that the developer’s vision of the project has already changed significantly. After purchasing a quarter-acre property at 614 East 12th Street directly adjacent to the HealthSouth tract, Aspen Heights is now reportedly able to fit two residential towers at the assembly rather than one office and one residential tower as previously planned. We’ve got a new look at the design for the site from Aspen Heights’ equity partners Texas Growth Fund, and sources connected to the project have confirmed these renderings:
Image: Texas Growth Fund / Aspen Heights Partners
Texas Growth Fund’s fourth downtown Austin, Texas project is currently planned to include:
- Two 37-story residential apartment towers with 921 units and over 772,000 square feet of living space.
- 28,000 square feet of retail space including a gourmet food hall and indoor live music venue.
- 30,000 square feet of elevated outdoor plaza that provides an amenity and connects the two residential structures, optimized to both contribute to and enjoy the 12th Street Capital View Corridor.
The site is expected to complement and benefit from the multiple sources of demand that immediately surround it. The mixed-use project site is directly across the street from Austin’s newly-developed 11-acre central park. The $94 million Waterloo Park and its 5,000-seat outdoor Moody Amphitheater are at the center of the city that is widely known as the “Live Music Capital of the World.”
The latest design for the project seen here under the name Waterloo Park Plaza would raise two adjacent 37-floor towers containing a combined 921 rental residences. With some adjustment of the project’s funding agreement that would reinvest a portion of the developer’s lease payments to the city back into the project’s affordable housing component, the number of income-restricted units in the two buildings could double from 116 to 232, according to the final term sheet of the project’s master development agreement included in the backup documents for Council’s September 29 discussion.
But to some members of Council, those 232 units — or even the possibility of 428 total affordable units assuming the city elects to reinvest Aspen Heights’ entire lease payment, rather than pocketing a portion of the funds — simply isn’t enough:
With Council Member Vanessa Fuentes absent, Council Members Alison Alter, Kathie Tovo, Anne Kitchen and Leslie Pool voted against the extension.
“I really believe that we can achieve a higher percentage of affordable housing,” said Tovo, who represents District 9. “When we have city-owned land, which our community has been asking us and urging us for decades, we should be using it to create as much affordable housing as possible.”
She recommended Council let the deal expire and then restart negotiations with a clean slate.
“We want this tract to be used for affordable housing, supplemented using rent from market-rate and other commercial uses on that property,” Tovo said.
With the benefit of history on your side, it’s pretty easy to look at the actions of those four council members voting against the extension as part of the larger rhetorical playbook that’s kept Austin’s housing scarce and expensive for years — by arguing for more affordable housing, you can actually slow down or outright prevent the construction of any housing, while still appearing compassionate to the cause of housing affordability to a casual observer. This strategy effectively forces your opponents to argue against affordable housing — the heartless ghouls! — by taking the position that a percentage of affordable units alongside market-rate units in a project is better than a 100 percent affordable development.
A frustratingly low-resolution rendering of the two-tower project from Waterloo Park — hey, is that the pedestrianized Red River we’re looking at? Image: Texas Growth Fund / Aspen Heights Partners
The actual argument is that it’s much more likely a mixed-income development here actually gets built, whereas the hypothetical fully-affordable option, if it happened at all, would likely delay construction here by several years due to the need for a new round of negotiations with the developer and result in a significantly downscaled final product. Let’s put it this way — would you rather build a 928-unit project that’s 25 percent affordable, or a 232-unit project that’s 100 percent affordable and takes five more years to open? How you respond to that question is a sort of Rorschach test for your general thoughts on growth and change in Austin, but if you think additional market-rate housing is better than no housing at all, the answer is pretty clear.
Leave a Reply