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A commemorative groundbreaking for the initial phase has tentatively been scheduled for Sept. 28.

The aim of the state’s project is to consolidate employees in state-owned buildings.

Construction is set to get under way later this month on a decades-in-the-making project to build new state office buildings, parking garages and a pedestrian-friendly green space along Congress Avenue north of the Capitol between 15th Street and Martin Luther King Jr. Boulevard.

A commemorative groundbreaking for the $580 million initial phase of the state complex has tentatively been scheduled for 8:30 a.m. on Sept. 28, according to the Texas Facilities Commission, which is overseeing the work.

The first phase, expected to be completed by late 2021, includes two new state buildings and three blocks of the so-called “Texas Mall” promenade, as well as utilities and above- and below-ground parking.

Charles Heimsath, a local real estate consultant who isn’t involved in the project, said the start of construction “will begin the transformation of the northern end of Congress Avenue,” similar to the evolution of the southern edge of downtown in recent years, where a wave of redevelopment brought new housing, restaurants, stores, office buildings and entertainment venues.

“The long anticipated Capitol complex master plan, of which these buildings are a part, will create an attractive urban environment for government workers that has been so successful for the private sector at the southern end of downtown,” said Heimsath, president of Capitol Market Research, a firm developers hire to conduct market-demand studies.

The aim of the state’s project is to consolidate employees in state-owned buildings and eventually save an estimated $22.6 million a year that state taxpayers currently spend to lease over 1.1 million square feet of private office space in the Austin area. Once complete, the first phase will save about $15.1 million annually in leasing expenses, according to commission documents.

A second phase would include two more buildings and completion of the four-block promenade, although it hasn’t been funded by the state Legislature. A final, unfunded phase also is on the drawing board, calling for additional buildings and green space.

Groundbreaking for the first phase will take place at 1801 Congress Ave., a parking lot across Congress Avenue from the Bullock Texas State History Museum. A 603,000-square-foot, 14-story office building is set to replace the parking lot.

The building — with a price tag of $170.35 million — will serve as a new headquarters for the Texas Lottery Commission, as well as house other state offices that haven’t been determined yet. In addition, “due to its prominent location at the end of Congress Avenue at the north gateway to the Texas Mall, the building will also include a new cultural venue to complement both the (Bullock museum) and Blanton Museum of Art,” facilities commission documents said.

Space for performances and displays, a gift shop and a cafe will be included in the building’s “cultural venue,” according to the commission.

State Sen. Kirk Watson, a former mayor of Austin, called the project the “beginning (of) an incredible transformation at the Capitol complex that starts with this new state office building and ends with an open and inviting public space available to all Texans.”

Watson, D-Austin, said city residents in particular “will be able to enjoy their Texas Capitol in a wonderful new way with the outdoor mall that will be home to the Texas Book Festival and other events. “

The second building included in the first phase — priced at $89.4 million — will be located at 1601 Congress Ave. and will be 12 stories tall and encompass about 416,000 square feet. It will contain conference rooms, the state’s child care facility and a restaurant, as well as various government offices.

A contiguous, five-level parking garage will be built beneath the two new buildings. Combined with above-ground parking at the 1801 Congress Ave. building, the first phase of the project will include more than 3,100 new parking spaces, according to the facilities commission.

The lottery commission’s headquarters currently is located in Grant Plaza at 611 E. Sixth St., where the state leases about 75,000 square feet from Empire Square Group, the New York-based real estate investment firm that owns the building. About 256 lottery employees work in the building, the lottery commission has said.

Heimsath said he expects private office space vacated by the state to be quickly “back-filled” with new tenants because of high demand for office space in downtown Austin. Some of the buildings could even be demolished “to make room for another tall tower,” he said.



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