The City Council is expected to consider once again a proposal to move the city’s Neighborhood Housing and Community Development Office from its close quarters in One Texas Center to an airier space in Eleven East, a 100,000-square-foot project on East 11th being developed by Riata Partners. The $8 million deal involves a 10-year lease between the city and private nonprofit Austin Revitalization Authority, the landlord of the property. The city would lease 22,000 square feet at the tune of $36 per square foot.
Last week, the Austin American-Statesman characterized the $36 rate as “more than twice what the city pays now for housing office space.” Calling that an “unfair” analysis, Community Development Officer Paul Hilgers said the Statesman “[made] it look like we’re paying an exorbitant amount,” and did not factor in costs for maintenance, utilities, and other services. A Feb. 4 terms sheet lists first year’s base rent as $16.50 “per rentable square foot,” with small increments until the fourth year, when the rent will increase by 3.5% yearly. “We’re getting a lot more office space so we can provide more services to everybody in Austin,” he said. Last Friday, Hilgers met with Council Member Will Wynn to discuss terms of the lease.
In the early years of its founding in 1996, the ARA experienced several major setbacks in its quest to restore the East 11th Street corridor to its former bustling glory. Development-wise, its major accomplishment to date is refurbishment of the historic Haehnel Building (the former site of Shorty’s Bar), now occupied by Balcones Recycling. Skeptics still complain that it took almost $700,000 to renovate a 4,200-square-foot space, but Hilgers gives credit to the ARA for building neighborhood consensus, developing a master plan, expediting wastewater, water, and stormwater projects, and securing federal dollars. Under the agency’s aegis, Hilgers said, the corridor “is going to be an exciting place to be.”
ARA President and CEO Byron Marshall says the agency is finishing construction drawings and land assemblage for the first phase of Eleven East construction. Council’s approval of the lease would help the ARA reach 65% leasing capacity and obtain construction loans to do site preparation, which Marshall expects would begin on June 1. “We expect to close all the leases by the end of March,” Marshall said, adding that a combination of seven businesses (both local and national) have signed letters of interest in leasing space at the new site — including a “small convenience store/grocer,” dry cleaners, a “mailboxes-type store,” laundromat, “little” restaurant, bank, and public interest group that deals with children’s issues. The city would be the largest tenant.
This article appears in February 8 • 2002.