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Austin: City Enters ENA with Developer to Redevelop the Former HealthSouth Rehabilitation Hospital Campus

Feature Illustration: Artist rending of the proposed tower development by Aspen Heights Partners.

Posted: 5-21-2021

by Art Benavidez

Austin (Travis County) — The City of Austin announced this week the city’s entrance into an exclusive negotiating agreement (ENA) with Aspen Heights Partners to redevelop the former HealthSouth Rehabilitation Hospital campus.

The property is located on a 1.7-acre tract at 1215 Red River St. and 606 E. 12th St.  

The site’s existing structures include a vacant 88,944-square-foot and four-story building with an adjacent parking garage. This is to be removed in favor of a mixed-use residential-retail concept.

In February, VBX reported that the city had given the Austin Economic Development Department a list of directives for the master plan to specifically address the need for affordable housing for the service industry and low-income workers in the Central Business District.

On May 14, 2021, the city and Aspen Heights Partners entered into an ENA that addresses the following city directives, along with releasing details of the development that will achieve those goals:

  • 25% to 45% mixed-income rental housing focusing on family-oriented multi‐bedroom (two-and-three-bedrooms) housing for households earning at or below 60% median family income;
  • Tenant protection provisions from the city’s Rental Housing Development Assistance Program guidelines;
  • Source of income protection by accepting housing choice vouchers from the HUD Housing Choice Voucher program, the city’s local housing vouchers, and other lawful, regular, and verifiable rental subsidies;
  • Sale price of affordable homes at no more than three times the household’s annual income (or three-and-a-half times the household’s income if someone  in  the  household  has  completed  approved homebuyer counseling or education);
  • Subject ownership units to an equity cap in which the homeowner’s equity can increase up to two percent per year for 30 years (at which point no additional equity can be earned);
  • High-quality, affordable childcare on site;
  • Woman Business Enterprise/Minority Business Enterprise subcontracting goals in accordance with city code;
  • Applicability of OSHA requirements, prevailing wage rates, environmental design requirements and rest breaks.

The proposed 36-story residential tower is expected to have 420,000 square feet of housing, consisting of 348 apartments and 160 condos, along with a 15-story office tower with 170,000 square feet, and a parking structure.

The development will also have a live music and art venue intended for prioritizing musicians and art venue operators who represent historically marginalized artists. Related to this, consideration is provided in the ENA for “street-level activation.” The developer is to participate with neighboring landowners in an effort to restore the urban grid, such that the ‘new alley on the north edge of the property be designated as 13th Street and, if commercial uses are present, include ground-level pedestrian-oriented uses similar to other streets in the Central Business District.”

Proposed Red River Street realignment exhibit.

The public will also have access to the tower’s viewing deck, along with open space, which may include an aquatic amenity; along with learning spaces; computer labs and other spaces with technological resources.

The project will also have the potential opportunity for city office space, along with an Austin Energy district cooling plant facility.  

The city included a revenue sharing clause: “Consideration for the lease and redevelopment … shall consider profit-sharing for the city beyond a certain internal rate of return once costs are recovered, in addition to the payment of $12.2 million for city expenses related to the property.”

The Austin-based architecture firm of STG Design, the engineering firm of Civilitude and landscape architects, Studio Balcones, round out the project team.

The ENA provides for nine months of negotiations to reach a final agreement. If the agreement is not in place then, the parties may extend negotiations by three months, “upon mutual agreement.”

VBX Project ID: 2021-0C57


art@virtualbx.com

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By |2021-05-21T09:03:08-05:00May 21st, 2021|Construction Preview, Feature Story|

About the Author:

Art Benavidez (Construction News Reporter, Central Texas) is a seasoned journalist with over 15-years of experience in writing breaking news and in-depth features at the local level. He honed his research and reporting skills in newspapers and magazines throughout South and West Texas along with expertise in crafting digital content as Managing Editor of New Image Marketing Research Corporation. Benevidez is a Texas native and graduate of UT-RGV.

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