A Complex Question?

by Amy Smith

The more people talk about the compact city concept, the more confusing it gets. What is a compact city, exactly? That's a matter of opinion, it turns out. A philosophical debate on the subject is being played out in the pre-development stages of an upscale apartment project on state-owned land in the heart of Central Austin.

The argument centers on whether Gables Central Park, a multi-family housing project of 273 units, will fit into the urban "city-within-a-city" motif that makes this north-central corridor one of the most desirable places to live and do business. The site in question spans 6.8 acres on the north side of West 38th Street, between North Lamar and Guadalupe. It's next door to the place where, this time four years ago, neighbors raised a furor over H.E.B.'s plans to lease state land - part of the Austin State Hospital grounds - and build the Central Market specialty food store and adjoining retail center. But good food has a way of winning people over, and Central Market has since come to be regarded as a valuable asset in an area of town seeing renewed energy in retail activity.

Gables Residential Trust, a publicly traded real estate investment trust out of Houston, wants to capitalize on this inner-city vitality with a $10 million-plus multi-family project. If all goes according to plan, Gables will be the second major development to go in at Central Park, a 38.5-acre, L-shaped tract on the south end of the grounds. The property, owned by the Texas Department of Mental Health and Mental Retardation (MHMR), is the state's first and largest effort to turn a profit on its land holdings by leasing surplus property to private developers. The legislature made such agreements possible in the late 1980s, when Texas hit bottom and decided to cash in on its surplus land holdings.

After a Texas General Land Office committee went through some unsuccessful starts in its search for someone to market the property, developer Pat Oles of C.P. Oles Company walked in with a winning proposal and backing from San Antonio businessman Sam Barshop, the founder of La Quinta Motor Inn. Oles may best be remembered in some circles as the man who helped draft the infamous parkland-for-development trade agreement on the FM Properties conflict, but his legacy is likely to be as a big wheel in real estate. In a world where success is measured by the foot, the C.P. Oles Company can tally up nearly two million square feet of retail space from here to San Antonio. Oles has found his niche buying or managing small neighborhood shopping centers like 26 Doors on West 35th Street, the Arboretum Market in Northwest Austin, Pecan Square on West Sixth Street, and Willow Court, a funky little strip mall on East Oltorf.

With the General Land Office driving the 75-year ground lease project for this, Oles' latest and biggest real estate deal, he and his partners are marketing the property to developers in return for a 15% share of net profits, plus a management fee.

The public-private partnership is expected to flesh out MHMR's historically strapped coffers with more than $270 million over the next 75 years. But what's got neighborhood leaders chapped is that development isn't proceeding according to the architectural design guidelines laid out in conjunction with the Central Park Planned Unit Development (PUD) the neighborhood associations and the Austin City Council approved in 1990. The Gables project, they say, is designed to satisfy a short-term, transient market condition that benefits the developer instead of the community. In crafting the original guidelines, architect Sinclair Black and former city planning director Dick Lillie called for an urban development of mid-rise buildings nestled in an idyllic, parklike, pedestrian- and transit-friendly setting. The plan also includes a set of narrowly tailored guidelines for buildings - everything from suggested building materials, design, height, and color, to window measurements - all the stuff that makes developers wince; they don't cotton to other people telling them how to build their projects.

Some area residents now believe the guidelines, with their "Our Town" kind of feel to them, were little more than a lofty sales tool used to get the neighborhood associations to sign off on the PUD. This feeling of betrayal is a hard thing for some residents to overcome. It's a powerful emotion that could jeopardize the state's efforts to gain community support on future projects. "The state was trying to set a good example of inner-city goals," Hyde Park resident Alan Marburger recalls of early efforts to promote the Central Park PUD. "They sold the idea to the neighborhoods, but when they tried to go out and market it, we were told that developers couldn't match the guidelines."

Indeed, development at Central Park is driven not by the neighbors or the guidelines, but by financial backers - an economic reality that leaves the compact city concept open to market definition. Nevertheless, residents who make up the Hyde Park, Rosedale, Heritage, and North University neighborhoods are no slouches when it comes to organized opposition. H.E.B. made concessions during its development process four years ago, and Gables similarly has agreed to go along with neighbors on several fronts, the prickliest of which concerned a fence that ringed the proposed complex, effectively shutting out the rest of the neighborhood. Gables officials say that liability factors dictate there be a security fence at the project, but they've agreed to make the structure less noticeable by placing it between buildings, thus opening the front doors of some of the apartment units directly onto 38th Street.

"Had it not been for the neighborhood associations, Central Market might not have been the project it turned out to be," Marburger says. "We've always been pro-development of that property as long as it fits in with the neighborhood. But the [economic] market has pushed our original guidelines on the property all over the place. So the question now is, `How much of the guidelines can we salvage?'" Again, that depends on the market.

On September 15, the guidelines were whittled down a little further when the MHMR board approved Gables' request to waive some technical portions of the design guidelines that apply to mid-rise buildings mentioned in the plan, not multi-family projects. The plan goes next to a review committee made up of state, business, and neighborhood representatives, and to the city planning department for routine administrative approval.

To state officials and project developers, the Gables project meets the compact city concept of 24-hour accessibility and lots of foot traffic. Additionally, it is situated in an area where Capital Metro buses are plentiful and ridership is high. "This is not a horrible, horrible project," concedes Cecil Pennington, who co-chairs the Hyde Park Neighborhood Association with Marburger. "It's not like they're putting in a prison or a used car lot. The problem I have with it is that it just looks like a suburban project. It doesn't look urban at all. I felt that the MHMR board listened to our concerns," he says of the Sept. 15 meeting, "but, of course, they're trying to get as much money as they can from this in anticipation of cutbacks from the state."

Pennington says he's resigned himself to Gables moving into the neighborhood, but he's still put out over developers' inability to deliver urban projects in Central Park, when they're able to do so in other cities. He points to the Uptown project in Dallas as an example of an inner-city development that meets the traditional concepts of the compact city, with retail and office space occupying the first floors of apartment buildings in a revitalized section of downtown. "The Uptown project," says Rick Craig, a regional vice president of Gables, "looks very nice... it has - quote - an `urban look'. But once you've gone in behind the front entrance, there's nothing but concrete. I think our project does a good job of fitting into the compact city concept. If someone believes it doesn't look urban enough, that's their opinion. We think we've come a long way on the project by giving [the neighborhood associations] a lot of input on the design. But we'll never be able to satisfy those people who had their minds set on a high-rise."

So how did a multi-family developer end up on a site that wasn't originally intended for multi-family? Craig credits local broker Doug Duwe with coming up with the idea more than two years ago. Duwe pitched the suggestion to Craig, whose company - made up of ex-Trammel Crow Residential executives - is a relative newcomer to the local apartment scene with two high-end projects to its name, one north of the Arboretum and another on Lake Austin Boulevard, on land Gables leases from the University of Texas System. Outside of Austin, Gables owns more than 30 upscale apartment developments in Dallas, Houston, San Antonio, Nashville, Memphis, and Atlanta.

The Oles group, the "master leaseholder" of the Central Park tract, didn't readily accept Craig's proposal to turn nearly seven acres of the Central Park property into a multi-family site. "We weren't sure if it was a good fit," says Milo Burdette, a limited partner in the Oles group. "But as the multi-family market got stronger and stronger, we started favoring the idea more and more. We contacted some other multi-family developers and narrowed it down to a few." Burdette says attempts to secure a mid-rise residential project for the site were met with strong arguments that such an endeavor would cost too much money, resulting in out-of-reach rent rates and little return on investment.

Given those facts, the Oles group settled on Gables and a high-density multi-family complex. The 13 three-story buildings will house one and two-bedroom units carrying a price tag of $700 to $1,200 a month. A clubhouse and two covered parking garages will be among the amenities. To be sure, the project will draw a new kind of resident to Central Austin - the "renter-by-choice" who wants to live in Central Austin but doesn't fancy spending weekends repairing an old cottage that cost a fortune. It's too early to predict how the newcomers' politics will influence this area's strong liberal block vote, but chances are the apartment dwellers will be like most homeowners in the neighborhood: white and educated, gay and straight, and financially secure.

And there'll be more construc- tion after Gables. There's space on the Central Park property for maybe two seven- or-eight-story buildings. Burdette, of the Oles group, says there have been inquiries from the apartment and hotel sectors, but a more likely suitor would be a retail-office developer. Three taxpayer-paid water retention and filtration ponds are also under construction at the site, courtesy of the city of Austin's drainage utility fund, which kicked in $450,000 to cover the city's first water quality retrofit project. Also in the works is a barrier-free playground called Promise Park, spearheaded by a group called Accessible Parks, Inc.

With traffic tie-ups already occurring on roads leading to Central Park, some infrastructure changes will be in order. Burdette says he's already suggested a traffic light at 38th Street and West, near the entrance of the Gables project, but city traffic engineers will have the final say. Still on the table is the possibility of the city adding a center turn lane on 38th Street, although residents fear the lane might wreak even more havoc with increased speeding and fewer opportunities for them to steer their cars out of their driveways.

Like it or not, Central Austin is in a high-growth mode that - despite being driven by the dollar - holds enormous potential for becoming a model for a mixed-use community that's bullish on mass transit. With all signs pointing to Gables breaking ground early next year, neighborhood leaders have vowed to monitor the project closely as the limestone and stucco buildings spring to life.

There exists a flicker of hope that Gables might follow Central Market's lead in turning out a widely accepted product. "The success of Central Market probably has had a reassuring effect on the surrounding community in regards to the quality of the development on this site," says Chris Price, the general land office's deputy commissioner for asset management. But Central Market's success notwithstanding, there's a nagging fear among residents that the neighborhood will come to resemble the suburb from which many of them fled. "We have to watch these plans very carefully," says Joyce Brown, former president of the Rosedale Neighborhood Association. "The state has sovereign power over the property, so of course that makes us want to move cautiously before we approve anything."

And there are yet more challenges ahead for the neighborhood associations. The state is firming up plans to solicit bids for private development on the "triangle" property, an open tract north of the State Hospital, where Lamar and Guadalupe come together. Maybe folks will be able to settle the compact city concept next time around. n