St. Elmo’s project pits Austin’s housing goals against industrial needs


Industrial Boulevard is a dusty, two-lane road with few sidewalks.

Located just off South Congress Avenue, the pockmarked street near the bustling highways of U.S. 290 and Interstate 35 is lined with metal buildings, warehouses and blue-collar businesses.

But precisely what makes this area great for manufacturing businesses — its central location near major highways — has also made it alluring to residential developers scrambling for sites to meet strong housing demand in Central Austin.

Now, a Dallas-based firm wants the city to rezone 9½ acres of the industrial area to make way for a $100 million mixed-use project.

The Austin City Council has already given tentative approval to the project, with a second vote set for Thursday.

But the project has ignited a firestorm of opposition from some nearby businesses and residents. In an unusual twist on the not-in-my-backyard phenomenon, these neighbors want the noisy trucks and manufacturing businesses to stay.

Opponents worry that the proposed St. Elmo’s Market and Lofts — which calls for a 75-room boutique hotel, up to 200 condominiums, office space and a food hall — will drive up property taxes, add to traffic congestion and be out of place in the heavily industrial area.

“The development itself is fine, it’s a good concept, it’s just in the wrong place,” said Michael Fossum, a 60-year-old resident of the 200-home Battle Bend Springs neighborhood, which is a half-mile south of the industrial area.

A ‘destination spot’ for Austin

Brandon Bolin, founder and CEO of GroundFloor Development, contends that the project will enhance the area and is the epitome of what Austin is trying to achieve with its long-range growth plan calling for building denser housing along busy roads.

Bolin said most of the condos would be priced at less than $300,000, and 40 percent would be priced at less than $200,000. He said he is considering having 10 percent of the units at below-market rates.

The “heart and soul” of the project would be a food hall with 20 to 40 vendors in a 1955 warehouse that currently is being used to sell furniture in bulk. The restored warehouse would be modeled after other food markets found worldwide, including the Market of San Miguel in Madrid, Chelsea Market in New York City, Ferry Plaza Farmers Market in San Francisco and Pike Place Market in Seattle.

Live music would be another focal point. Joe Ables, owner of the Saxon Pub on South Lamar Boulevard, told the City Council that he wants to move his music venue to the proposed St. Elmo’s project.

Bolin hopes to break ground on the food market in early 2016 and open it a year later. The office space and condos could also break ground in 2016. GroundFloor wouldn’t purchase the land until late 2015, and it intends to bring on partners to develop the various components.

Bolin said his project will add more than 2,000 jobs to the area.

Though zoned for industrial uses, the site is in the path of the city’s growth, Bolin said.

“The puck is headed this way,” said Bolin, an Austin resident. “In real estate, you always want to skate to where the puck is headed.”

Yes, no, maybe in my backyard

Despite some residents’ voluminous protests — which have taken the form of emails, a website (www.nocondoshere.com), petitions, testimony at the Oct. 23 City Council meeting and a recent morning rally held on Industrial Boulevard — a majority of the City Council is on board with the project. Initial approval came last month, though city staffers had recommended against it.

“It’s generally not considered a good idea to put residential near by industrial uses,” said Jerry Rusthoven, a manager in the city’s planning department.

Robert Palmerton, the owner of nearby business Compound Security Specialists and a ringleader of the anti-condo group, said when he learned about the project he was “floored.”

He’s been there for 26 years and can quickly rattle off a list of manufacturing businesses located there: auto mechanics, welders, concrete plants, a roofing and tool company. Palmerton said the area has been zoned industrial since 1955.

“This little section really supports the trades in Austin,” he said.

But it’s not displacement alone he’s worried about — though he says there is very little affordable industrial zoning left in Austin.

He doesn’t think it makes sense to put condominiums side-by-side with manufacturing businesses. “We are dirty businesses, we make a lot of noise, we use chemicals, we manufacture things,” he said. “They will start complaining that we are polluting their world through lights, noise and heavy truck traffic. … They will forget that we were here first.”

In an unusual alliance, many residents of the nearby neighborhoods say they want to keep the trucks and noise. “We want to keep it an industrial area,” said Elaine Martinez, who lives in Battle Bend Springs.

Martinez said she’s concerned about the loss of jobs, but even more worried about what the upscale mixed-use project will do to her ever-escalating property taxes and the heavy traffic on South Congress.

Dani Tristan, an associate real estate broker with McAllister & Associates in Austin familiar with the St. Elmo area, agrees that property taxes will rise because it’s in an area ripe for redevelopment.

“As development occurs this area will become more desirable, and the home values will increase,” with the homeowners just south of the project seeing the biggest impact, Tristan said.

But despite the opposition from neighbors, Bolin secured a letter of support from the South Congress Combined Neighborhood Plan Contact Team, which said it is backing the project because it fits with the city’s goal of making South Congress Avenue a “vibrant, accessible mixed-use” destination.


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