Work on a contentious development that would bring a 420-unit high-rise residential complex to the Rainey Street area has been postponed as the developer and the Rainey Neighbors Association work out a compromise in the form of a traffic study.

Sutton Co., which plans to purchase the Villas on Town Lake—located at 80 Red River St., Austin, next to Hotel Van Zandt—has faced opposition from the neighboring condominium complexes, including The Shores Condos, whose owners say adding that many units will worsen traffic congestion in the area.

The issue before Austin City Council is whether to remove a Villas covenant that restricts the number of units to 30 housing units per acre. That means a maximum of 68 units on a little more than 2 acres could be developed if City Council votes to keep the restriction intact.

The hearing was postponed again for a week on Thursday so Sutton Co., representatives from the RNA and Mayor Pro Tem Kathie Tovo's office can finalize an agreement that calls for Sutton Co. to pay for a traffic study of the entire Rainey area, according to Joi Harden, a policy aide for Tovo's office.

Part of Tovo's District 9 encompasses the Rainey area.

The three parties met Monday to discuss a compromise and need another week to finalize the traffic study agreement and propose it to City Council, Harden said.

She said the city, the RNA and "other stakeholders" will be involved in drafting the scope of the study and selecting the traffic engineer.

"Whenever we have a contentious zoning case, we try to work together for a compromise," Harden said, calling the Monday meeting productive.

She said City Council will hear the details of the traffic study during the public hearing on the Villas' restrictive covenant Oct. 20.

Sutton Co. is also developing Waller Park Place—consisting of a 30-story office tower, a 54-story apartment building, and a 48-story hotel and condominium complex—at the intersection of Cesar Chavez and Red River streets.

Herbert “Mac” Pike, chairman and co-owner of Sutton Co., told Community Impact Newspaper in September he is hoping to close on the sale of the Villas by the end of the year. He said even if City Council votes to keep the covenant, he still plans to tear down the Villas and build on the property—either an office building or hotel. The covenant would not apply to those uses.

Nikelle Meade, who represents Sutton Co., told Austin planning commissioners in September the residential complex would create less traffic than any other use on that property.

Misha Sakellaropoulo, who lives at the Shores and sits on the condominium's homeowners association board, called the Monday meeting a "completely mediocre attempt by the city this week to broker a compromise."

He said the proposed traffic study should have been done by the city "years ago," and he thinks City Council is "sensitive to another repeat of the Grove hearing," referring to the Grove at Shoal Creek, a proposed 75-acre mixed-use development off 45th Street and Bull Creek Road. Development of the Grove has been met with opposition from community members.

Gary Johnson, the Villas HOA president, said he thinks all parties involved can reach a compromise.

"Everybody is trying to work in good faith to reach an agreement," he said.