After 2-year delay, work starts on Hotel ZaZa in downtown Austin

4:49 p.m Wednesday, Aug. 17, 2016 Business

After a delay that lasted nearly two years, developers said this week that work has started on a 24-story downtown Austin tower that will house a 160-room high-end hotel and about 200 apartments.

Hotel ZaZa and Gables Residential first announced the project at West Fourth and Guadalupe streets in 2012, with plans to start construction in 2014 and open in 2016.

Instead, the lot – formerly the site of The Ginger Man, a bar – has sat largely untouched.

The project’s new completion date is late 2018, Hotel ZaZa president Benji Homsey said.

Aside from the pushed-back opening date, little about the project has changed, Homsey and Gables Residential development director Jennifer Wiebrand said. The same lenders are on board, the number of hotel rooms and apartment units remains the same and the building’s look is unaltered.

One of the key design features, inside and outside, involves reusing bricks and other materials saved when The Ginger Man was demolished, Homsey said.

The delay, which Wiebrand said wasn’t caused by any one thing, gave both Gables and ZaZa time to “proofread” their plans to ensure they were “delivering the right product to the market.”

“Everything about this project still feels really great,” Homsey said. “It’s been a slow process, but things have held together. We’re glad to be officially under way.”

Austin attorney Richard Suttle Jr., who handled Gables Residential’s zoning case, said it’s not unusual for major projects to get delayed for a variety of reasons.

“Downtown sites can be complicated,” he said. “I’m glad this important project has cleared all the hurdles unique to downtown development.”

Construction workers have been busy in recent days pumping groundwater from the site – something Homsey and Wiebrand said was expected because it’s commonly found in downtown Austin.

“We knew it was there and we planned for it,” Wiebrand said. “It would have been easier to build an above-ground parking garage to avoid it rather than building an underground garage, but that wouldn’t have been the right answer for our neighbors or for Republic Square Park across the street.”

The delay means Hotel ZaZa’s projected opening will be near the end of Austin’s current hotel building boom – a boom that’s adding thousands of new rooms in the downtown area.

Still, an industry analyst said he expects the hotel will be a success, just like ZaZa’s other properties in the Dallas and Houston areas.

“Hotel ZaZa is a concept that really fits in the Austin market,” said Randy McCaslin, managing director for CBRE Hotels Consulting, formerly known as PKF Consulting. “It caters to young, creative professionals and weekend leisure visitors, of which there is an endless supply in Austin. With its excellent location between Guadalupe and Lavaca in the heart of the Warehouse District, I would expect the ZaZa to do extremely well.”

Homsey said he expects Hotel ZaZa and Gables Residential will benefit from the large number of offices going up nearby, including new towers being built at the former Green Water Treatment Plant site. Google is among the tenants who’ve leased space in the area.

“We’re not worried at all,” he said. “Office feeds both apartments and hotels. It’s a really good situation for us. Austin has really proven itself in these past few years.”

The revitalization project underway across the street at Republic Square Park makes the area appealing for both apartment renters and tourists, as well, Wiebrand said.

Gables Residential, which owns 1,791 apartment units in Austin and manages an additional 769, expects to begin leasing in summer 2018.

“This is a great project unlike anything in this market,” Wiebrand said. “We’re as committed as ever.”