In the world of development, big ideas need support. It’s the cooperation and buy-in from financiers, developers and the community as a whole, among many other details, that makes impactful development projects come alive. For several decades public-private partnerships (PPP) have evolved as a credible means to develop more than one-shot projects, instead creating meaningful environments that invigorate positive impact and economic activity.
Nowhere is this truer than in Austin, a city with its share of PPP success stories. Here’s a look at how PPP is building a better Austin.
‘Mall’-ing it over
It’s no secret that changes in retail shopping habits have trickled through to the commercial real estate arena. Frankly, the retail sector is in the midst of an unprecedented transformation at the hands of the Internet. In the second quarter of this year, U.S. retail saw a negative 3.8 million square feet absorption rate, thanks in large part to the Toys R Us closures.
In North Austin, Highland Mall was just another story of retail decline. Opened in 1971, it had seen its heyday come and go with heavyweights like JC Penney’s, Macy’s and Dillard’s carrying out anchor duties for a number of years. However, by 2009 it was on a Yahoo list of “America’s Most Endangered Malls” with two of its seven sections officially closed. In 2015, after the site was purchased by the city’s community college (ACC), the vacant mall officially closed.
Today, however, Public-Private Partnership efforts have brought to fruition a newly-branded site called Highland. ACC has opened a regional education center and is currently expanding the site into a high-tech campus. The public enterprise has partnered with private developer RedLeaf Properties to oversee redevelopment efforts while other private developers like Greystar Real Estate Partners have added 300 apartments with 5,000 square feet of retail in a new building called Elan Parkside. Another two multifamily buildings with 390 units and 25,000 square feet of retail are currently under construction.
“The Highland redevelopment has become one of the most-anticipated real estate projects in Central Texas and is a stellar example of a successful public-private partnership that results in a more thoughtful, more vital and more popular project for everyone involved,” Derek Brown, Greystar managing director, told the Austin American- Statesman.
At full buildout, the mixed-use campus will have walking trails connecting three parks, 120 affordable housing units among a total of 1,200 residential units, more than 800,000 square feet of office space, 200 hotel rooms and 150,000 square feet of fresh retail.
A runway to transformation
Located just three miles from downtown Austin and only two miles from the University of Texas at Austin, the Mueller master plan envisioned the transformation of the 700-acre site, formerly home to the Robert Mueller Municipal Airport.
As the airport closed in 1999, PPP planning efforts were taking off. By 2004, following an extensive amount of community input, a master development agreement between Catellus Development Group and the City of Austin was approved and construction began in earnest.
Mueller is built on smart urban planning principles and considered by many developers as “a masterwork of smart urban design.” The sustainable, transit-oriented community offers places to work, shop and live. There, you’ll find a number of smaller, local retailers and restaurants throughout the mixed-use, mixed-income community in keeping with community requests. A Home Depot, Old Navy, PetSmart and H-E-B, among others, also call Mueller home. Additionally, Mueller is anchored by medical care and research facilities with Dell Children’s Medical Center of Central Texas and the 14-acre University of Texas Health Research Campus. There are also a host of residential opportunities for all ages, with ¼ of the residential units available to families who earn less than 80% median family income. Today, thousands of people call the area home with many more thousands to come.
A future bright with possibility
Austin’s Public-Private Partnership success is seen in many other ways. Its Seaholm development is a partnership between the city and Seaholm Power LLC, which decommissioned a power plant in the city in 1996. The 85-acre site is in full redevelopment mode with residential and retail currently under construction for the actual plant structure itself. Nearly $2 billion has been invested in the site, the majority from private funds.
Other projects include the city’s ZACH Theatre, which was built in 2012 with $10 million in city bond funding while private funding covered the rest. One of the biggest PPP stories in the works today is the 24-acre north Austin city-owned site known as McKalla Place where the city was actively seeking a PPP development opportunity. For consideration: a proposed 20,000-seat Major League Soccer stadium to house a relocated franchise currently playing in Columbus. The Columbus Crew SC’s owner has been a vocal supporter of moving his franchise to Austin and on August 15, after much discussion, the Austin City Council approved the deal.
With this latest project now moving forward, it’s clear that the city of Austin remains thirsty for these types of partnerships and it is likely that there will be many more PPP success stories in the foreseeable future.