New $150 million Austin Energy headquarters coming to Mueller area after City Council vote

The new $150 million, 275,000-square-foot headquarters will host 850 Austin Energy employees.

The new $150 million, 275,000-square-foot headquarters will host 850 Austin Energy employees.

Austin Energy, the city’s electric utility, will take over a 3.3-acre tract in the Mueller Development with a new $150 million, 275,000-square-foot headquarters following Austin City Council’s Dec. 13 approval.

The project, which officials expect to break ground in 2019, represents an efficiency effort by the city to move government employees from leased space to purchased office buildings. Upon completion, 850 Austin Energy employees will exit their offices at 721 and 811 Barton Springs Rd and 5202 E. Ben White Boulevard into the new headquarters.

Austin will save an estimated $30 million over 30 years on leasing costs because of the project, said Andrew Moore, project manager with the city’s financial services department.

Catellus Development Corp., the developer responsible for the Mueller development, sold the land to the city, and will build the project. Moore said this project, located at 4815 ½ Mueller Blvd., differs from usual city operations. He said the city does not typically build administrative buildings, choosing rather to purchase or lease existing structures and retrofit them to the city’s needs. Moore said that typical city process would have likely cost $50-$60 million more.

Moore said although the $150 million price tag seems high, the Catellus deal was “on the low end” among the nine proposals they received.

“This is a market-driven process and a test of the market,” Moore said. “Office space is extremely expensive right now, unfortunately.”

Rates will go up slightly in order to finance the project, but not as much as the increases that would have come as a result of staying locked into the lease, Moore said. He said Austin Energy will have to take out bonds to cover the cost of the new facility, but those costs would not come online until 2021. Moore estimated an average increase of 5 cents per month.

A new Austin Energy headquarters has been in the works for years. In 2014, the city had a plan to develop a new headquarters in Southeast Austin for $67 million, however, Moore said the price tag, at the time, appeared high and the city ditched the deal.

Prior to their approval, City Council members Thursday praised the project for its multi-layered benefit to the city. Coupled with the $30 million in savings, the city will require construction workers to receive a minimum wage of $15 per hour, on-site safety training, and at least 15 percent of the workers to have completed or actively enrolled into apprenticeship programs.

“[This project] deals with facility needs, is fiscally responsible and addresses inequality in our community all at once,” said District 4 Council Member Greg Casar, who also called the project a “great success.”

Moore said the project would also include an adjacent 6-story parking garage, with the top two floors designed in a way that makes them easy to convert to office space should the headquarters need to expand in the future.

By Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun, USA Today and several other local outlets along the east coast.


MOST RECENT

Photoo of Travis County sign
Austin City Council, Travis County Commissioners Court will hold rare joint session to address 'dire' COVID-19 status

County Judge Andy Brown called the meeting "an opportunity to coordinate responses."

Photo of a wine shop
Salt & Time expands with natural wine shop and other East Austin business news

Read about six businesses that have opened, closed or celebrated anniversaries on the East Side.

Voters line up during the Dec. 15 runoff election. (Christopher Neely/Community Impact Newspaper)
Legality of ranked-choice voting prompts disagreement between supporters, Austin city attorneys

If a Jan. 11 petition is validated, Austin voters could decide whether to support the implementation a ranked-choice voting system. But is it unconstitutional?

A group of Austin-area school districts is advocating for early distribution of COVID-19 vaccines for school staff members. (Courtesy Adobe Stock)
Austin-area school districts advocate for teachers to receive COVID-19 vaccines

Educators in the designated population for early distribution of the COVID-19 vaccine in 32 states. Texas was not one of them, according to a Jan. 14 letter signed by 17 Central Texas school districts.

H-E-B is preparing to accept coronavirus vaccine appointments through an online portal. (Nicholas Cicale/Community Impact Newspaper)
H-E-B launches vaccine portal; Whipped Bakery opens in Leander and more top Central Texas news

Read the most popular news from the past week from the Central Texas area.

Dr. Anthony Fauci gave remarks while accepting the Ken Shine Prize in Health Leadership from Dell Medical School. (Screenshot via The University of Texas)
Dr. Anthony Fauci praises UT researcher’s role in vaccine development

Dr. Anthony Fauci's remarks came while accepting the Ken Shine Prize in Health Leadership from Dell Medical School.

Photo of Judge Andy Brown at a press conference
Travis County health leaders say Regional COVID-19 Therapeutic Infusion Center will help unburden hospitals

In its first week, the center offered 120 coronavirus patients an antiviral antibody treatment.

PHoto of a vaccine being administered
Austin Public Health discusses vaccination priorities, registration protocol as regional hub

Local health leaders discouraged people from walking up to vaccine sites without an appointment.

Austin Mayor Steve Adler will still reach his term limit in 2022 if voters approve changes to the election cycle. (Jack Flagler/Community Impact Newspaper)
Potential strong-mayor system in Austin would be 'weakest of any big city in the country,' supporters say

Exactly what kind of a strong-mayor system would Austin have if it was approved by voters? Among the weakest in the country, supporters said.

Texas Comptroller of Public Accounts Glenn Hegar shared a new revenue estimate for the 2022-23 biennium Jan. 11. (Courtesy Texas Comptroller of Public Accounts)
Comptroller projects drop in state revenue, potential for economic uptick for next biennium

Despite the slight reduction in expected revenue for the state's 2022-23 budget, recovery could be on the horizon.