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Seaholm redevelopment project marks a milestone

After sitting dormant for nearly a quarter century, Seaholm is powering back up.

The former power plant site marked a milestone in its redevelopment on Monday, as health care technology company Athenahealth began moving into the downtown Austin facility.

The 1950s concrete structure — a landmark familiar to Austinites for more than 50 years — was an early industrial workhorse that once supplied electricity to the growing city. Athenahealth’s move-in signals the completion of the first phase of Seaholm’s transformation into a mixed-use project that will bring that site, as well other nearby former industrial land, back onto the tax rolls and generate millions in tax dollars for the city over time, according to city officials and John Rosato, lead developer for Seaholm Power LLC., the local team the city chose in 2005 to redevelop the site.

Seaholm’s redevelopment cost has been estimated at $133 million, with more than $100 million in private investment and about $33 million for the city of Austin’s share. The project will include a parking garage with 538 spaces, 315 of which the city will own.

By day’s end Monday, all 74 of Athenahealth’s current Austin employees were expected to be moved into the company’s cavernous 112,000-square-foot research and development center at the former Seaholm Power Plant at 800 West Cesar Chavez Street.

The Watertown, Mass.-based health care information technology firm, which makes services and software for health providers, could receive $679,500 over 10 years in incentives from the city if it makes good on its promise to create more than 600 jobs during that time. Additionally, the state of Texas is giving the company $5 million from the Texas Enterprise Fund for the firm’s job-creating investment in the Austin region.

The company expects to have 150 to 200 employees working at Seaholm in the next two years, said Jack Nye, vice president of software development for Athenahealth and the senior member of the firm’s Austin team.

Greg Kiloh, the city’s project manager for Seaholm, said the completion of the first phase of Seaholm’s makeover is “a significant milestone” toward fulfilling the city’s vision for downtown’s west end — to turn former industrial sites into bustling new hubs connected to the rest of downtown.

“The arrival of the first tenants of the power plant redevelopment is an exciting moment for the city,” Kiloh said.

Athenahealth has said the jobs will pay an average annual wage of $132,085. The firm has committed to making a capital investment of $13 million in its new Austin facility, where it initially will occupy two of four floors, with plans to grow into the remaining space.

The exterior of the Seaholm structure has been preserved, as have its five smokestacks and signage. So have some interior features, including the clerestory windows, concrete walls, a gantry crane and other industrial remnants and artifacts.

But Athenahealth is also bringing a contemporary look to the facility, with bright furniture, custom wall art with a colorful, fractal theme; open workstations; and spaces that include “time out rooms” for a breather and “huddle rooms.”

As a technology hub — and a city with a growing health care industry — Austin is a prime place for Athenahealth to grow its talent base, Nye said.

The Seaholm power plant was retired from service in 1989. But Seaholm’s makeover, a joint public-private venture, will once again have the nearly eight-acre site buzzing with activity as Athenahealth opens and other tenants soon follow suit. Those include Austin’s third Trader Joe’s store and a four-story restaurant and bar — Boiler 9 Bar + Grill — that is expected to open in May and will feature chefs David Bull and Jason Stude.

“It’s been really exciting working on Boiler Nine Bar + Grill because we are incorporating concepts from the historic power plant into our menu items,” Stude said. “This building means a lot to our community and we want to reflect that through our cuisine. Guests can expect to see delicious meats, vegetable and seafood coming off a wood-fired grill, a tribute to the smokestacks that once fueled Austin.”

This fall, True Food Kitchen will open a location at Seaholm, bringing an array of healthy food options.

Also under construction at Seaholm is a 30-story tower that will have 280 luxury condominiums, the first of which are due to open in September.

In a nearby building, Under Armour will open a second-story office in the next couple of weeks, Rosato said.

Seaholm Power LLC has a 99-year lease of the decommissioned power plant, and is purchasing two surrounding lots on the site from the city.

Not everyone was happy about a private company locating within Seaholm’s walls — where a public use such as retail or a museum originally was envisioned — much less receiving incentives to do so.

But Rosato said the site will have several public spaces, including an interior courtyard and a glassed-off area in the turbine building where the public can see into the structure, which looms 50-feet high and 270 feet long.

City officials have calculated that Athenahealth’s incentive package, which amounts to $250 per new full-time job, per year, will mean a net benefit of $1.67 million for the city.

On top of that, the R&D facility is expected to add $200,000 in property tax revenue over 10 years that would help pay down debt service at Seaholm.

Kiloh said the nearly $1.7 million net benefit the city is expected to receive through its economic development agreement with Athenahealth will be a 245 percent return on the city’s investment.

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