Developers are proposing a two-tower mixed-use project in Austin’s Rainey Street area that includes a 60-story tower that, if built, would become Austin’s tallest building.
The Sutton Co. of Austin and Dallas-based Koa Partners are partnering on the project, which envisions a 60-story skyscraper that would have 440 luxury apartments plus office space. A second smaller tower would have 200 condominiums and 200 hotel rooms, developers say.
Austin’s tallest building is the 56-story Austonian on Congress Avenue. The Independent, a 58-story condo building dubbed “the Jenga tower,” broke ground in January.
The project is proposed on a 2-acre site that is currently home to the Villas on Town Lake, a 58-unit condominium project overlooking Lady Bird Lake.
Mac Pike, chairman of The Sutton Co., said developers could have a site development permit in hand from the city in about a year, for a projected mid-2017 construction start.
Sutton beat out 11 other bidders for the property, for which the Villas owners began soliciting offers last year through local broker Robert Knight. Sutton has a contract to buy the 2-acre site for $50.8 million, said Gary Johnson, president of the board of the Villas’ homeowners association. Johnson said he and his wife, Bonita White, have lived at the Villas since 1999.
Proceeds from the sale, after closing costs, brokerage and other fees, will be divided among owners based on their unit sizes, Johnson said. Owners of two-bedroom units are expected to receive roughly $925,00 to $930,000, while owners of one-bedroom units can expect to net just under $500,000, Johnson said.
One resident, Lora Herring, said she recently moved from her two-bedroom unit that she bought 23 years ago for $93,000. Herring said she expects to receive about $930,000 for her unit when the sale closes.
Pike anticipates the sale to close in September, after which time residents would have six months to move before demolition would begin on the Villas.
The proposed project could cost an estimated $400 million, Pike said. He said Sutton and Koa are in talks with prospective financial partners.
Pike said each tower would have about 600,000 square feet. The project could be built with existing zoning and using the city’s density bonus program, Pike said.
Jerry Rusthoven in the city’s Planning and Zoning Department said the city’s density bonus policy allows developers to build bigger projects than otherwise would be allowed, by having some units at below-market rates. Pike said the project will include “a small component of affordable units to get the density we need to justify the purchase price.”
Harry Lake, chief executive officer of Koa Partners, said Koa is excited about the project, which he said will complement other development in the Rainey Street area.
Lake, formerly with Trammell Crow Co. and familiar with Austin, said he built a relationship with Pike and Sutton partner Wally Scott over the years and sees their company as a good fit to partner with on what Lake says will be “an iconic project at the confluence of Lady Bird Lake and Waller Creek.”
“We just love everything this site presents to us and have a commitment to do something special,” Lake said.
Pike said Sutton is in talks with a hotel hat he said “will be new to Austin, but well known and well received internationally.”
Pike anticipates the apartment rents would range from about $2,000 a month to $20,000 a month for a penthouse. Condominium prices could start at just under $700,000 for a 900-square-foot unit and go as high as $12 million for an entire floor with 12,000 square feet.
In addition to numerous bars and clubs, the Rainey area has seen significant new apartment, condominium and hotel development — changes not all who live in the neighborhood, including some of the longtime Villas residents, have welcomed.
Herring, who recently sold her unit in the Villas on Town Lake, said: “Now that Rainey Street is all bars, it’s just a giant traffic jam on the weekend nights. I wouldn’t get out to go places, or if I did, I wouldn’t be able to get back in.”
Herring, 59, now lives in the nearby Towers of Town Lake condos, where her mother also has a unit.
She said she loved living in the Villas, and never thought she’d move.
“I used to say, ‘I think I’ll live here ‘til I die, and hopefully that won’t be soon.’”