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Farewell, Intel Shell

Gigantic Downtown symbol of bust-and-boom economy comes down

By Katherine Gregor, Fri., Feb. 23, 2007

Farewell, Intel Shell
Photo By John Anderson

The strange saga of the Intel shell compresses in haikulike fashion the meteoric arc of Austin's bust-and-boom economy over the past seven years. (That's about the average length of a development cycle, by the way.) And, to mix a metaphor, the project offers a fascinating barometer of the changing winds that have blown Downtown since 2000.

When Intel selected Austin as the site for a new 10-story, $124 million chip-design center, we gloated that our town was hotter-than-hot. Winning the new Intel project symbolized all that was robust about Austin's economy and the revitalization of Downtown, in those high tech glory days. But as the economy slowed, in March 2001 Intel abruptly stopped construction – a harbinger, as it turned out, of the deeper economic downturn to come after 9/11 later that year. As the ugly Intel shell sat forlorn and abandoned from 2001 to 2004, it came to painfully symbolize all of Austin's broken economic development dreams. (And to some, the folly of the rich $15 million incentive package the city had provided Intel to build it.)

In 2004, the U.S. government finally closed a long-simmering deal to buy the site for a new federal courthouse. City leaders expressed relief and gratitude that at last the prime site fronting Republic Square at Fifth and San Antonio would gain a respectable new structure. But the timeline has dragged out; the U.S. General Services Administration now talks of construction starting in 2009, with the courthouse opening in 2012. Under local pressure to at least clear the site, the GSA this month announced an "implosion event" to take down the long-derided skeleton – with the pyrotechnics scheduled for this coming Sunday morning, Feb. 25, at 7am. (What fun!)

But did this announcement that the despised Intel shell would at last disappear like a bad dream make Downtown boosters happy? No! Suddenly, they wanted to save it! Just in the past few months, civic visionary Sinclair Black had rallied supporters – including the mayor, the Downtown Austin Neighborhood Association, and the Downtown Austin Alliance – around a whole new idea for the Intel shell: Trade up, use the existing frame for a more vibrant condo project with ground-floor retail (or even the Austin Museum of Art), and build the same courthouse design somewhere else. To prove up the market viability of the idea, local developer Andrews Urban offered the GSA $13 million for the site (said to represent a $5 million profit, plus a savings of the $1.3 million demolition cost). Even more impressive, the developer had a lender in hand willing to immediately finance a privately constructed courthouse – to be built far sooner on another site, with a lease-purchase option for the feds.

The idea was creative, entrepreneurial, forward-thinking – and far too weird for the federal bureaucracy. Saying it was simply too late in the game to change its course, the GSA and the federal judges turned the proposal down cold. Yet, the site still will sit empty for at least two more years.

Perhaps the most compelling case made by Black is this: A standing presidential order directs that the funding of federal projects be used to promote economic development in areas that have suffered from disinvestment. When Rep. Lloyd Doggett first started wooing the feds to the site in 2002, perhaps it qualified. But in million-dollar-condo-crazed 2007, the idea that Downtown Austin needs a federal investment to rebound seems pleasantly ridiculous. So why isn't the Eastside getting the courthouse?

Then again, development cycles being what they are, Downtowners just might be grateful for that courthouse when it finally starts in 2009 or in 2012.

Special note: If you live in or near Downtown, prepare this thought for that 7am moment when the big boom of implosion wakes you from a dead sleep: No, it's not a terrorist attack.

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