Austin: Day 2

We had four site visits today and a lunch meeting with some ladies from the department of agriculture.

Our first site visit was with Kent Buress and he gave us a tour of the LEED platinum Ronald McDonald House. The RMH provides lodging for families who have children in the Dell Children's Hospital. The building was built for a purpose and the design of the building started in 2003. Construction started in November of 2006 and they moved in the property in December of 2007. It is the first LEED platinum building in Austin and the 3rd in Texas. The property received an energy and innovation credit for going above and beyond what was called for. He told us that the entire building receives at least some natural light except for the bathrooms and closets. Although building LEED can cause a premium of 16-18% on construction costs he said that the money they are saving from being efficient has already recouped the money paid up front.

Next, we went to check out the Mueller Development. This a huge project comprising of 700 acres and lots of single family residential, multi-family, commercial, medical, and parks and green space. We were told that they have a lot of flexibility when it comes to zoning as they can change the use fairly easily depending on what the market dictates. The whole development is a TIF district and the city reimburses Catellus for costs incurred regarding infrastructure. There is a 10-15 year timeframe on the completion of the whole development and 600 homes have already been sold and occupied. A 440 unit apartment complex that has been completed is currently 85% leased. In the development there are 25% affordable homes with condos starting at around $150,000 and single family homes ranging from $218,000 all the way up to around $1 million.

During our lunch today we met with Judy Fort and Sherri Gothart-Barron of the Texas Department of Agriculture. Judy Fort works in the rural economic development Department and she helps get businesses into rural communities. While she tries to get new businesses to relocate to rural communities, she also emphasized that rural governments should focus on their existing businesses and make sure they stay there and have all the opportunities needed to expand. Some businesses can get grant money if they create enough jobs in the community. We then spoke with Sherri about retirement communities. She said they are trying to persuade the wealthy baby boomer generation to retire in Texas by promoting these communities that have nice amenities and country living.

After lunch, we visited the Seaholm Power Plant very briefly. It was built in 1952 and quit generating power in 1992. It was a vacant building that was going through remediation because of various environmental issues. The purchase of the plant and the land surrounding it happened because the buyers were told that they could develop the surrounding land as long as they redeveloped the plant itself. Retail, Office, Restaurant, and Event Center are all ideas being looked at for the redevelopment of the plant. As for the development on the land, it cannot exceed two stories due to the view corridors that were discussed in the day 1 blog.

Our final stop of the day was with Lance Morris at the Hill Country Galleria. This is a huge lifestyle retail center located in Southwest Austin. The development started in 2005 and 2006 by Lincoln Properties and Opus. The city of Bee Caves got the developers build them a new city hall and public library and then the land was deeded over to make their ownership free and clear. Recently the shopping center was foreclosed on and bought for $75 million in cash when the outstanding debt on the property was $160 million. One of the problems with the development is that it was built knowing the surrounding area was about to be developed by A LOT of single family homes. The market then crashed and some of the development came to a halt so then there was this HUGE retail location with not enough people to support it. Mr. Morris suggested that putting in a grocery type anchor that people would visit many times a week would draw more traffic to the center. Another part of the center is that there is second story office space availabe almost throughout the entire complex. Recently, this was 3% occupied but in the past 70 days it has been brought up to 55%. Mr. Morris is optimistic that this will help him lease up more of the retail space. This is important as many of the tenants are wanting rent relief but once the center becomes 70% occupied that relief will be harder to come by.