The background
The 5.47-acre “Ryan Drive Site,” located next to Crestview Station at 6909 Ryan Drive, is a former Austin Energy storage yard that locals and city officials have long viewed as ripe for an upgrade. Back in 2013, City Council asked to explore adding affordable housing on the property through redevelopment, work that's been continuing since then.
In 2018, community members shared their vision for how the site could be transformed with a slate of public improvements. Following further planning and public engagement, the city sought out interested builders and council in 2021 moved to open negotiations with 3423 Holdings LLC for the site's redevelopment based on those neighborhood goals.
"We thought, ‘Man, this is a great place to do some really great work for the community,'" 3423 Chief Operating Officer Ben Barlin told Community Impact.
3423’s original proposal, chosen as the top option for the site by city staff, included nearly 350 apartments and townhomes. A majority—between 65% and 89% of that total—would be reserved as affordable for lower-income earners, including dozens for those exiting homelessness.
The new plan for the former utility storage yard also featured acres of green space, retail and cultural facilities, and a new transit station. Additionally, 3423 owns the parcels north and south of the Ryan Drive site, and the developer was looking to add to the project footprint with further amenities on that land.
After Austin and 3423 formally moved into exclusive negotiations last year, both sides never reached a deal, and talks officially ended May 25.
City staff are now looking to hand the Ryan Drive property over to the Austin Housing Finance Corp.—the city’s nonprofit affordable housing arm—and restart all development planning.
"The 5.5-acre site is strategically located at the Crestview Station Redline Capital Metro Rail Stop, an excellent opportunity for mixed-income housing, particularly affordable housing for low- to moderate-income households," Economic Development Department spokesperson Andrea Rojas said in an email. "The Austin Housing Finance Corporation has the financial, technical and regulatory structure to maximize affordable housing benefits on-site and achieving the vision of the community as summarized in the Ryan Drive Working Group Report."
After project planning stretched through the pandemic, Barlin said his firm eventually backed out as the project became "unworkable" given current economic factors, such as rising interest rates and borrowing uncertainty.
According to city documents, talks had been extended twice before 3423 stepped away in May thanks to "adverse financial conditions."
Barlin said 3423 tried working with Austin negotiators to make their outline possible before stepping away from the table. But in the end, 3423 withdrew after the city wasn't willing to waive certain building requirements that the developer had previously agreed to.
Barlin acknowledged that those terms were always part of the deal. But, he said he'd hoped to find a middle ground to advance what he viewed as a public improvement effort after determining that the original building requirements had grown too costly.
"Obviously, we breached our original proposal. But at the end of the day, we thought that what we were giving back to the city would balance out not having these other requirements that I don’t think any other builder has ever done for the city before on multifamily," Barlin said.
Mike Lavigne, president of the Crestview Neighborhood Association, said the project's collapse was a blow for him and other Crestview residents after years of working toward their shared vision.
“The Barlins were a pleasure to deal with, and I always felt like they were an open book and had every intention of delivering what they promised," Lavigne told Community Impact in late June. "It’s deeply disappointing for the neighborhood to know that we’re back to the drawing board on this. When we were hoping to have affordable housing delivered in the next couple years, now you’re talking about affordable housing—if ever—maybe in five years.”
The outlook
Now, city staff have proposed transferring the property from Austin Energy to the AHFC before jump-starting a new development process.
The deal would cost about $3 million in city affordable housing bond dollars, including a $2.69 million payment to AE for the land and $198,903 to the Economic Development Department for reimbursements related to the deal. Council will vote on the proposal, which Rojas said is required thanks to the AHFC's "unique procurement and governance rules," on July 20.
If that's approved, the city would restart planning efforts by issuing a new public solicitation for interested developers. That request could go out later this year, and a new developer may be picked in 2024.
With 3423 out as a partner, the potential contribution of its neighboring properties is no longer a key piece of the project. However, Rojas said the AHFC remains open to collaborating with the community and "adjacent landowners" during the new process.
District 7 Council Member Leslie Pool, a longtime supporter of the site's redevelopment, also said she's disappointed 3423's proposal didn't come together during her time in office. However, she added that the city remains focused on the community's original hopes for the property and that she believes the new strategy is appropriate—and already attracting interest from prospective builders.
"The vision that the community brought to the table around that property continues to be relevant, and it’s more than aspiration. I think we really need to do everything in our power to operationalize it," Pool said. "Transferring the oversight [to the AHFC] ... will go a long distance to helping have that happen, because they can devote a larger portion of staff time and effort to those proposals."
Zooming out
While the cases are separate, news of the disrupted process at Ryan Drive comes soon after a similar breakdown in Austin's negotiations with developer Aspen Heights Partners over a pair of planned high-rises on city-owned land downtown.
Aspen Heights' proposal included two towers with hundreds of housing units, a public plaza and cultural space at 1215 Red River St., a vacant HealthSouth facility the city bought years ago. In that case, city representatives also said the builder determined its project outline was no longer feasible in current market conditions.
Some city officials are now pushing to recommit to bringing affordable housing to that property and the surrounding area. Additionally, they’re asking to move negotiations out of the hands of EDD, which handled the last round of talks, over to either the AHFC or the nonprofit Austin Economic Development Corp.
While the Ryan Drive and HealthSouth efforts stalled out, other large-scale redevelopments on city land still appear to be progressing.
One, the transformation of an old Home Depot and car dealership in St. John, is moving along as of this summer. That project would turn about 19 acres of vacant land off I-35 into a mixed-use neighborhood hub, also centered on low-income housing, parks and other community-oriented features.
“Greystar and The Housing Authority of the city of Austin are pleased to be continuing forward with our negotiations for the redevelopment of the St. Johns site. We appreciate the ongoing support of the St. John’s community, Council Member [Chito] Vela, the Economic Development Department and our design partners," the project team said in a statement.
Rojas also confirmed those negotiations are advancing with both sides hoping to wrap up talks by late 2023 or early 2024. In the meantime, she said the city plans to knock down the old Home Depot building this year.
To the east, Catellus Development Corp.'s work turning hundreds of acres around Colony Park into a master-planned "sustainable community" is also in progress after council approved updated project plans earlier this spring.
Other planned city-backed redevelopments include projects at 3515 Manor Road and potentially Austin's fleet lot at 1190 Hargrave St.
