Major developments to bring office space, more residential options to Southwest Austin

Construction machinery whirring along Southwest Parkway, a stretch of road that connects with Hwy. 71 in Southwest Austin, is a familiar sight to many who drive in the area. Several developments and office projects in the area are already under construction, and plans for others are being reviewed and revised.

Near the intersection of Southwest Parkway and William Cannon Drive, Chasco Constructors is laying the groundwork for a major project tentatively called Tecoma, Stratus Properties Inc. President and CEO Beau Armstrong said. Stratus developed plans in the early '90s for the project north of Southwest Parkway, which will include about 1,860 multifamily units, 1.5 million square feet of commercial space and an extension of William Cannon Drive that will be called Tecoma Circle.

"We're very excited about it," Armstrong said. "It's great real estate, it's really well-located and we think we're hitting the market at the right time."

Work is underway on the road extension as well as extending Travis County Municipal Utility District utilities to the property, he said. Stratus plans to begin construction by the end of 2014 on the first phase consisting of about 300 multifamily units and 200,000 square feet of commercial space, he said.

Structural beams went up in June for another large project, the Encino Trace office park. San Antonio–based developer Koontz-McCombs sold the 54-acre suburban office campus at 5707 Southwest Parkway to Brandywine Realty Trust in May. The two buildings will each provide 160,000 square feet of Class A office space, and the campus will include a six-level parking garage, said Rick Potter, a project executive with Potter & Co. LLC, which is overseeing construction on behalf of Koontz-McCombs.

"This is one of the first large projects to be built in the Southwest [Austin] market in the past at least six years," Potter said.

Environment affects developments

Pristine terrain, an abundance of nearby housing for executives and proximity to top schools are among factors that have drawn developers to the area despite environmental restrictions and features such as the Edwards Aquifer, Potter said.

"There are very few opportunities for new office space in Southwest Austin just due to the regulatory climate, and [Encino Trace] is one that's been worked on for many years," Potter said.

Local multifamily development and construction company Oden Hughes LLC broke ground in November on Landmark Conservancy, a four-story, 240-unit apartment project on 22 acres in Oak Hill. Oden Hughes plans to maintain 15 acres of open space as well as add a water treatment facility, said Mac McElwrath, Oden Hughes director, multifamily development.

Its clubhouse is slated to open in October, and the first units should be available by November, he said.

This summer Escondera Condominiums started construction on its fourth phase, The Enclave at Escondera, said Vicki Reed, real estate agent with Ultima Real Estate. The project consists of seven buildings and 35 units at 8200 Southwest Parkway as part of the development's 60 acres that extend to 7800 Southwest Parkway, she said.

The Enclave at Escondera, slated to open by summer 2015, is being built atop the Edwards Aquifer, so water retention ponds and systems to recapture water from sprinklers on the property are required, she said.

"In Phase 4, that water retention pond is our biggest challenge over there. [Workers are] having to literally hammer away through solid rock to be able to form this pond so we can capture all the watershed. It can be a challenge, but it pays off so much in the long run," she said, noting the location attracts young professionals and empty nesters downsizing from larger homes.

The Tecoma project precedes the city of Austin's Save Our Springs Ordinance regulating development in the Barton Springs Zone, Armstrong said.

However, Stratus is working under a non-degradation ordinance that will achieve similar goals as the SOS ordinance, he said. Stratus is planning to work with the local Center for Maximum Potential Building Systems to ensure the project uses environmentally friendly elements such as native plants and possibly some Leadership in Energy & Environmental Design certifications, he said.

"I just believe in sustainable development," he said. "I think it makes sense from a financial perspective, and it also makes sense for the environment. I think in a city like Austin, if you don't do that, then you're really kind of out of sync with your customers."

Armstrong said it will take about seven years to complete the overall project, representing about $700 million worth of development.

"Having been involved with this now for [more than 20] years, it is great to finally see it coming to fruition," Armstrong said. "And I'm glad we had the patience to be able to hold on this long and see it through."

The project includes water and wastewater treatment plants near its entrance, and the area will be landscaped to create a "Hill Country contemporary" aesthetic, he said.

Work on the Travis County MUD No. 4 South Water Treatment Plant should wrap up by August, said Hank Kidwell, an engineer with Murfee Engineering Co. Inc., the project's engineering firm. Construction on the plant, which includes a treatment facility, pumps and a water storage tank, began in June 2013, he said.

Development and road congestion

Armstrong said the Tecoma development will help to bring more amenities, including a grocery store, to the Southwest Parkway area and help improve traffic.

"Southwest Parkway is one of the most underutilized roads in the city. ... Right now if you [live near Southwest Parkway and you want to] go to the grocery store, you're going to go to Bee Caves Road to the H-E-B in Westlake, or you're going to come all the way down to the H-E-B at the Y [at Oak Hill]," Armstrong said. "We need a new store here ... so we can change the traffic patterns and focus people [on Southwest Parkway] where there is excess capacity."

Trails providing access to the nearby greenbelt, a section with high-end single-family homes and more commercial spaces are planned as part of the Tecoma project, he said. A golf course is approved, but he said he is not sure if it will be built or not.

"We've got a huge population base out here that really is underserved," Armstrong said, noting demand for restaurants, shopping and other amenities will continue to grow as more residential developments take hold.

Another nearby project, the Austin Aquatics and Sports Academy, will join the list of amenities coming to the area.

Construction started in June on the $6.5 million athletic training facility and Olympic-sized competition pool at 5513 Southwest Parkway, said Todd Foley, head coach and general manager of aquatics. The center is slated to open in October.

Austin Aquatics Chief Operating Officer Bobby Thompson said the project team was looking for a site that would serve triathletes and swimmers from throughout Austin as well as Bee Cave and Lakeway.

"It is pretty easily accessible to the people from the south and west without having to deal with some of the main thoroughfares like [Loop] 360," he added.

A traffic signal planned for the entrance of Encino Trace should also improve traffic flow on Southwest Parkway, Potter said.

More projects in planning stages

City permitting documents show a variety of additional projects in the works.

All Saints Presbyterian Church applied in June to build an educational facility on Rialto Boulevard.

Also on Rialto Boulevard, construction will be complete in October on the 35,000-square-foot headquarters of J&J Worldwide, a government contractor providing military base operation and support services to the U.S. government, said Architect Rodney Palmer with Cornerstone Architects LLP.

The site also includes a 28,000-square-foot building serving as shell lease space, J&J Vice President Duke Malvaney said.

Signs posted at 8715 Hwy. 71 read "AMLI at Covered Bridge," and city documents indicate a site plan was filed in July for the second phase of the multifamily complex, located at 6804 Covered Bridge Drive.

In July an applicant proposed a preliminary plan for residential development Barton Ridge Estates, located on 30.946 acres.

Armstrong said construction is in progress on the third phase of the Amarra residential development. The phase consists of 64 new home sites, he said. In June plans were filed for The Overlook at Amarra Drive, which would add condominiums on 11.39 acres near Barton Creek Boulevard.

On June 27, Drawbridge Realty Trust acquired the Overwatch building, a 164,700-square-foot office building on 48.1 acres with development plans for an additional 123,500-square-foot office building and parking garage.

Real estate firm CBRE expects the Southwest Parkway area will continue to attract developers, Senior Vice President Russell Young said.

"I think you're going to see more multifamily [housing] go into the area. I think the office projects that are on the drawing boards and getting built right now, they will get completed, and then I think it'll be a while before you'll see new projects just given [that there's] about 500,000 square feet of vacancy in that area," he said. "But I think it's going to continue to be a very desirable location."