East Austin commercial development boom leaves business owners conflicted

This 61-year-old East Austin business is now being scoped by developers.

This 61-year-old East Austin business is now being scoped by developers.

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A Landscape Transformed
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Growing Pains
This is part two in a three-part reporting project on the changes East Austin’s neighborhoods have experienced. You can find part one, an examination of the area's history and political representation, here. Check back on Thursday for our piece on neighborhood schools responding to demographic changes. You can find more information on how the story began here.  

Entrepreneurs, developers seek sustainable growth for local businesses old and new

On East 12th Street there is a small white building. A portrait of Martin Luther King Jr. and a motto—“You don’t need no Teeth to eat my Beef”—are painted on the facade. Since 1957, Sam’s Bar-B-Que has fed the neighborhood.

Recently, however, third-generation owner Brian Mays said he has received offers as high as $3.5 million from developers interested in the property. So far he has turned them down, even as he faces rising property taxes and increasing competition as development moves east.

“We all can make money, but we can’t make land,” Mays said.

Land rush

City of Austin records show that since 2009 more than 44 percent of all new commercial building permits issued in Central Austin fall within the eastern crescent, a roughly 18-square-mile area bordered by I-35, US 183 and the Colorado River.

This is a sharp increase from previous decades: Between 1999 and 2008, about a third of such permits fell in that area; between 1989 and 1998, a quarter; and between 1979 and 1988, less than one-fifth.

While new construction in Austin has decreased  overall since the ’80s as land has grown scarce, East Austin has emerged a hub of commercial development. With such rapid growth, however, the area has gentrified, raising concerns about displacement and equity.

For now, the area remains hospitable to small and local businesses, unlike other parts of Austin, which have seen community staples such as the Frisco Shop, Annies Cafe & Bar, and the Light Bulb Shop close as national chains and corporate ventures move in.

In the last year Ramen Tatsu-Ya, Via313, local salons Wax That and Shed Barber and Supply, JuiceLand and Houndstooth Coffee have opened new locations in East Austin. New businesses are also popping up, including Bricolage Curated Florals; Cute Nail Salon;  Harvest Lumber Co.; art community Print Press; and restaurants Bird Bird Biscuit, Rosewood and Suerte.

An influx of residential and mixed-use developments, most notably the forthcoming Plaza Saltillo project, has accompanied them.

“As Austin attracts more and more businesses and people, we’ll see an exponential curve increase of development,” said Thomas Bercy, co-founder of East Austin architecture and urban planning firm Bercy Chen Studio. “The gentrification of East Austin will probably accelerate a lot quicker than we think.”

Navigating growth

After living in East Austin for seven years, Josh Hare opened the craft brewery Hops & Grain on Calles Street in 2011.

He made an effort to cultivate the goodwill of the local business community, offering free beer for events.

“[We were] not revitalizing because this neighborhood was already very vital,” Hare said.

Today, Hops and Grain benefits from the new condos and offices in the area; those residents and employees visit the taproom.

“I want more people to visit our business,” Hare said. “But at the same time it’s tough to see residents who have lived here … [unable] to pay their property taxes because of the developments that are going in around them.”

Other business owners bank on new development.

Restaurateur Seth Baas purchased a property at the corner of Cesar Chavez Street and Pleasant Valley Road in 2012 because it was what he could afford in Austin.

Five years of construction and navigating the city’s permit office later, he opened Pitchfork Pretty.

The young business relies on residents living in new condos and mixed-use developments to fill its seats.

“Ultimately, we want to be a neighborhood restaurant,” Baas said. “And the neighborhood is still developing around us, as far as a neighborhood of people where this is their type of restaurant.”

Nearby, Alta Alexander runs Altatudes, a women’s boutique she opened in September 2017.

Growing up in nearby Smithville, Alexander visited East Austin for church and hair appointments. As an adult, she worked at clothing stores around the city.

Since opening her business, Alexander has felt welcomed to the neighborhood. “I have had people come in just to say, ‘We’re so proud that it’s a black woman who owns an upscale boutique here in East Austin, that you opted to be here,’” she said.

Alexander also hopes to attract customers who are new to East Austin, such as those slated to work in the Next Door Creative Office, which is being built nearby.

“I want them to come,” she said.

‘Enlightened’ development

A 5,000-square-foot  Class A—or premier—office rental in East Austin would cost, on average, $18,854.17 a month, compared to $23,595.83 in the Central Business District downtown, according to market data from commercial real estate firm Cushman & Wakefield.

The East side also offers smaller office spaces and better access to transit, trails and amenities, per Bercy, that appeal to tech companies and startups

“They want something that’s close to the core, not downtown pricing, but also has a certain edge,” he said.

TBG Partners is a local landscape architecture firm that has been involved in some of East Austin’s largest new mixed-use developments, including thinkEAST and Plaza Saltillo.

Part of their design process involves collecting community feedback.

“It’s a sensitive topic,” principal Nicole Warns said. “I definitely do not want to be the person who comes into their community and says, ‘Here’s what you need.’”

Instead, the firm looks to partner with what principal Sean Compton called “enlightened developers” who welcome the participation of local residents.

Involving the community in major commercial projects is rarely the most cost-effective approach, they said, but it pays dividends when developers seek the neighborhood approval necessary for zoning changes.

“Whether you like the project or not is not as important as, ‘Does the community embrace it?’” Compton said of measuring a project’s success.

Bercy said his firm, which prioritizes sustainability and has included affordable units in all of its East Austin residential projects, has found absolute community support hard to come by: “Sometimes we’re accused of being a gentrifying force. Sometimes … we’re accused of dumping affordable housing on the East side.”

Agents of change

After learning of Mays’ decision to turn down developers’ offers, local organizer Erica Anthony-Benavides helped create Second Saturdays at Sam’s, a monthly Facebook event meant to draw customers to the restaurant.

“Sometimes people try to frame [gentrification] like, ‘You’re improving the neighborhood!’” Anthony-Benavides said. “Yes, but for whom?”

Junfeng Jiao, director of the Urban Information Lab at the University of Texas School of Architecture, has researched food deserts in Austin.

New development, Jiao said, often brings more grocery stores and improved infrastructure to historically underserved areas, such as East Austin.

Plaza Saltillo, for instance, will feature a 365 by Whole Foods and will be served by a transit stop.

However, such development does not always quench food deserts and other issues of inequity.

“It should take a long time to solve the problem because it has taken a long time to form this problem,” Jiao said.

Many of Sam’s original customers have moved away because of the rising cost of living.

Alex McLeod, a 2018 graduate of the Liberal Arts and Science Academy in Northeast Austin, realized this when he founded Digital Bridge, a nonprofit that connects small businesses with students in need of website design experience, after noticing many East Austin businesses lacked an online presence.

With a website and some social media training, McLeod said, a 61-year-old business like Sam’s Bar-B-Que is better equipped to grow its customer base.

Such support has paid off, for now.

“If everybody stands behind me and makes sure we’re alright, we’ll never sell,” Mays said.