A new high-rise project on city-owned land and the redevelopment of the former Austin American-Statesman property are moving closer to reality.

The first project, located on the site of a former health care facility and parking garage, would bring two 37-story residential towers to the edge of Waterloo Park in downtown’s innovation district. And at 305 S. Congress Ave., extensive negotiations between the city and developer Endeavor Real Estate Group are also continuing as the Statesman project moves toward final approval.

Council also postponed a vote on a new electric rate hike proposed by Austin Energy and signed off on a plan that could bring adjustments favored by city officials to the Texas Department of Transportation's I-35 expansion.

Statesman site benefits in focus

Council approval of the proposed Statesman site redevelopment is pending, but officials dove deeper into the project’s contested issues this week.

An updated planned unit development, or PUD, at 305 S. Congress Ave. would bring a multimillion-square-foot mixed-use project to the shores of Lady Bird Lake. A PUD allows developers to build beyond standard entitlements, such as building height, in exchange for added benefits to the community, and much of the conversation surrounding the zoning case has centered on the range of benefits Endeavor could bring.

Endeavor's plan includes the dedication of a new lakeshore park next to the existing hike-and-bike trail. When that space will be made available is still to be determined, but attorney Richard Suttle said the team aims to keep most of the existing waterfront trail open throughout the project's entire build-out.

“We want to do everything we can not to block access under any circumstances. That’s the goal. ... But safety matters, so there may be certain instances where we reroute or close for a temporary [time]," he said.

Council members also zeroed in on the financial side of parkland dedication, a city requirement that developers contribute either land or funding to help grow Austin's park system based on the size of their projects.

Endeavor had originally planned for around $9 million in parkland payments based on expected dedication fees. However, that number could now be closer to $7 million following council's recent decision to limit a proposed fee hike—a gap Mayor Steve Adler said should be made up with new tradeoffs. Mayor Pro Tem Alison Alter also asked to ensure that difference is accounted for as planning continues.

“There’s been a demonstrated ability to pay the larger amount that was otherwise required under the anticipated amount. And as it is, I am concerned that we are not fully meeting the community's expectations with respect to the park and the park build-out," she said.

On affordable housing, officials seemed to agree that they now face three choices for the PUD outline. While some council members had hoped to get more units out of the project, the financials of Endeavor's project mean the number of possible options has likely narrowed.

If affordable spaces are included in the Statesman redevelopment, around 55 units—4% of the project total—would be reserved for tenants earning 80% or below the area median family income, or MFI, once construction wraps up.

A separate proposal from Endeavor could see more units made available immediately. The developer said it could reserve around 70 units in 422 at the Lake, an existing complex located a block away, for 80% MFI tenants; no portion of the Statesman project would be income-restricted.

Finally, the city could opt out of any affordable spaces from Endeavor and instead accept more than $23 million in fees for other new housing projects in the area.

District 5 Council Member Ann Kitchen also brought up the issue of a proposed extension of Barton Springs Road through the site, an addition viewed by staff as a community benefit. She said the city and Endeavor should consider whether cutting the cost of the road could leave more money for more housing.

“To my mind, sure we’d like the road, and sure that would be helpful. But we’re also just struggling here with the affordable housing," she said. "We need to think about the extent to which that’s necessary and the extent to which that’s counted towards the value that we’re getting from this PUD."

All of those questions, and more, will be taken up again Oct. 13, although the second of three required votes on the zoning update could still be delayed.

HealthSouth redevelopment

After more than a year of negotiations, the city and developer Aspen Heights Partners reached the next step in discussions over the residential high-rises coming to the former HealthSouth property at 1215 Red River St. and 606 E. 12th St.

The city, which owns those parcels, chose Aspen Heights and several partner groups to redevelop the land with a range of community benefits, including affordable housing, a public plaza, and commercial, child care and arts space. The extent of those has now been worked out with more than 200 affordable units out of the 921-apartment project and tens of thousands of square feet reserved for the other components.

Council voted to send city staff to negotiate a master development agreement for the project based on final terms Sept. 29 with a continuing focus on housing and child care forwarded by Council Member Kathie Tovo.

Those items drew some frustration on the dais ahead of a vote, with Council Member Pio Renteria questioning whether the new directives were intended as a "poison pill" to stall the project down the line. Given that a final development agreement will likely not be completed before her term ends, Tovo said she wanted the additions to ensure that affordable housing is built on-site.

The item passed 9-1-1 with Council Member Mackenzie Kelly against and Council Member Vanessa Fuentes away from the dais.