Agreement between Austin, Aspen Heights Partners outlines benefits to be included in redevelopment of former HealthSouth property

A previously released proposal for the former HealthSouth property's redevelopment from Aspen Heights Partners centers on two towers containing a range of community benefits. (Courtesy Austin Economic Development Department)
A previously released proposal for the former HealthSouth property's redevelopment from Aspen Heights Partners centers on two towers containing a range of community benefits. (Courtesy Austin Economic Development Department)

A previously released proposal for the former HealthSouth property's redevelopment from Aspen Heights Partners centers on two towers containing a range of community benefits. (Courtesy Austin Economic Development Department)

The city of Austin and developer Aspen Heights Partners finalized an exclusive negotiating agreement May 14 for the proposed pair of high-rise residential and office buildings to be built at the former HealthSouth property in northeast downtown.

Based on information included in a city memo released May 17, the agreement between Austin and Aspen Heights solidifies many of the goals City Council members established for the project in late January when members directed negotiations between the city and developer to kick off. Among Austin officials' previously stated desires for future development of the 1.7-acre city-owned property at 1215 Red River St. and 606 E. 12th St. are components such as a focus on affordable housing; a live music venue; and publicly accessible open spaces spread across a 15-story, 170,000-square-foot office tower and 36-story, 420,000-square-foot residential tower.

While the negotiating agreement approved this month does not establish the final scope of the project, it appears many of council's priorities will be incorporated into its final design. As requested, affordable housing would make up between 25% and 45% of rental housing at the development; Aspen Heights had previously said the development would include 348 rental apartments and 160 condominiums.

Affordable housing spaces will be geared towards families with two- and three-bedroom layouts available to households making less than 60% of the Austin-Round Rock metropolitan statistical area's median family income—around $59,340 for a family of four in 2021, based on estimates from the U.S. Department of Housing and Urban Development. Other housing items included in the agreement are city-level tenant protection provisions and source of income protection.

Among the additional community benefits highlighted in the May agreement are affordable child care services; spaces for local businesses such as "retailers, grocers and restaurants"; a live music and arts venue space available for rent and "prioritizing operators representing historically disenfranchised artists"; educational spaces; and public-access outdoor spaces and a viewing platform. The city may also use some of the towers for its own offices and an Austin Energy cooling plant.


Community Impact Newspaper previously reported that the completion of an initial negotiating agreement between the city and Aspen Heights would be followed by a master development agreement planning process, and construction could begin by 2023. City Council is next set to hear an update on the project negotiations during its May 18 work session.

Progress on the HealthSouth redevelopment project represents one of many steps in the expansion of a landmark medical and commercial innovation district downtown along I-35. Other pieces of that area plan now moving forward include Waterloo Park, expected to open later this summer, and the redevelopment of Central Health's former Brackenridge hospital campus adjacent to the Austin-Aspen Heights project. The Central Health site could also clear a hurdle with the city this week; a public hearing for its rezoning is expected to be held during City Council's May 20 meeting.
By Ben Thompson

Austin City Hall Reporter

Ben joined Community Impact Newspaper in January 2019 after graduating with a degree in journalism from Northeastern University in Boston. He spent more than two years reporting on Montgomery County and The Woodlands area before moving to Austin in 2021 to cover City Hall and other news throughout the city. Contact Ben with questions, tips or feedback at [email protected] and follow him on Twitter @BThompson_CI.