Austin-based World Class Capital Group has made another downtown land purchase, buying the remainder of the block surrounding the 56-story Austonian skyscraper, Austin’s tallest building.
The site that was purchased — about 1.3 acres — is bounded by Congress Avenue and Second, Third and Colorado streets. It includes a surface parking lot along with the land and building that house the Austin Children’s Museum, which will be relocating to the Mueller development in Northeast Austin, and Compass Learning.
World Class Capital Group, an investment and asset management firm, bought the tract as a long-term investment and “has no immediate plans for development of the site,” Nate Paul, its president and CEO, told the American-Statesman via e-mail. The site is 59,000 square feet, about double the size of the site that the Austonian was built on.
“The site presented an opportunity to acquire an irreplaceable piece of real estate in downtown Austin,” Paul said. “We are long-term investors in downtown Austin and feel this site provides the opportunity to play an integral part in shaping the development of one of the most rapidly growing and exciting cities in the nation.”
If developed to the density the Austonian was approved for, the site “could exceed 1.4 million square feet of development, making it one of the largest and most dense development sites in downtown Austin,” Paul said.
The sale closed Dec. 31, according to Travis County deed records. The purchase price was confidential, the buyer and seller said. The land is appraised for just over $9 million by the Travis Central Appraisal District.
Dani Tristan, a commercial real estate agent with McAllister & Associates, said that a large development “would be appropriate” for the site, and noted that the additional property taxes would be a boon for the city of Austin and the Austin school district. Tristan estimated the site’s worth at anywhere from $35 million to $42 million. Rules protecting views of the state Capitol could limit height along a small portion along Congress Avenue.
“Having a property of this size is a rare commodity in downtown Austin,” Tristan said. “With all the state-, city- and county-owned property downtown, it’s going to be hard to fill a large user’s demand. There aren’t many opportunities like this.”
The purchase follows numerous other downtown acquisitions by World Class Capital Group. The company owns the buildings that formerly housed Spaghetti Warehouse, Katz’s Deli, Momo’s nightclub, La Zona Rosa, the Melting Pot and the Hard Rock Cafe. The company last year also purchased a prime parcel of property fronting Lady Bird Lake, just east of downtown’s Four Seasons Hotel.
The Spaghetti Warehouse, Katz’s Deli, Melting Pot and Hard Rock Cafe buildings are all fully pre-leased and under redevelopment, Paul said.
A potential development at the site next to the Four Seasons is in the works, but specific plans have not yet been released, Paul said.
The seller of the tract next to the Austonian was Nalle Plastics Family Limited Partnership. Alan Nalle Sr., manager of the partnership, said his father and grandfather started a plastics injection molding business on part of the site in the late 1940s.
Alan Nalle Sr. said he worked in the family business from the late 1960s to the early 1980s. The company was sold in the mid-1980s, and after subsequent ownership changes, it operates today as DelStar Technologies Inc. on St. Elmo Road in South Austin, Nalle said.
Nalle said Paul approached him late last year about buying the property, and the process moved quickly.
Nalle said he was impressed with Paul.
“I think he is a man of some considerable honor and integrity, and he’s a pleasure to do business with,” Nalle said. “Nate did everything he said he was going to down the line.”
At the new site, any eventual project could present similar issues for the Austonian condominium residents as those faced by residents in the Plaza Lofts downtown, when they learned a tower with apartments and a hotel was proposed next door. Some Plaza residents say the project will be too closeto their balconies.
However, Mindy Ellmer, a lobbyist who lives on the 11th floor of the Austonian and has views to the west and north, said that when buying a downtown residence, “there are no guarantees.”
“If I wanted to guarantee my view, I would have bought much higher in the building than I did,” Ellmer said. “I’d hate to lose my sunset, but that’s part of the risk you take when you buy downtown.”
As long as developers follow the rules, she said she’s a proponent of more downtown development, “and if it happens to obstruct my view, so be it.”