Division seeks to move 12,000 employees downtown by 2020

The Texas Facilities Commission is developing a plan that will drastically change the landscape of Austin's Capitol complex, as well as relocate some state offices throughout Austin into the downtown district.

The Capitol Area Development Strategy, led by the TFC's Planning & Asset Management Division, seeks to consolidate space the state currently leases from the private sector primarily into the Capitol complex that is roughly bound by MLK Jr. Boulevard, Lavaca Street, Trinity Street and 11th Street, and also into state-owned land in the North Austin complex near 45th Street, 51st Street and North Lamar Boulevard.

While the project is still in its beginning stages, it aims to shift 12,000 state employees out of leased facilities throughout Austin into fewer facilities and to monetize strategic assets in order to pay for the development and maintanance of these new buildings.

But there is no one specific action that spurred this initiative to analyze every state government office; rather, it was a trend noticed by a TFC employee who realized that the State of Texas underutilizes the land it owns and spends too much on the land it does not.

"You drive around the Capitol Complex and you see the fortress of parking garages, and they just jump off the street at you," said Aundre Dukes, TFC's portfolio manager, public liaison and a principal employee in the strategy's development. "Before working for the commission and knowing who owned the sites, I wondered, 'Is there really a need for 11 contiguous parking facilities along the San Jacinto corridor? Years later, being [at the TFC], I recognized the commission was responsible for these assets and now work to identify higher and better uses, such that the assets generate revenue to help sustain the portfolio."

Taking initiative

Dukes began following up on his curiosity in 2010, and in early 2011 presented the TFC with a massing study he conducted to help officials visually realize how the state was underutilizing the space it owns, how it could maximize the use of that space and how it could begin earning additional revenue that in turn would pay for proposed land acquisition and development.

"We did the massing study to show what assets the state has, how those assets are being used and to expose the latent potential in the portfolio—what could be in place of parking lots and garages," Dukes said. "We need a comprehensive strategy to develop and maintain a roof over state government and to recoup the public's investment in the state's assets."

Dukes found that out of the Capitol complex's 122 acres of land, the State of Texas underutilizes 21 acres of land, which translates into 7 million square feet of development capacity according to current City of Austin zoning standards. While the state is exempt from adhering to local municipal zoning authority, Dukes said he used current Austin zoning policy as a basis for his review.

As a result of the study, the TFC now plans to construct three additional buildings along North Congress Avenue, between 15th and 17th streets, to house more state employees. The plan reduces the number of state employee parking spots—he said only 60 percent of spaces are filled daily, according to a 2009 assessment—and instead adds parking spaces underground.

The cause for consolidation

The project calls for a massive relocation of state employees that begins with intentionally grouping the expiration dates of state-leased office space, located throughout Austin, together so that at one time they all can be consolidated and move into buildings on state-owned land.

"[But] these are assumptions at this point," Dukes added. "We're still going through feasibility analyses, figuring out what gaps exist and determining to what extent we'll need to monetize other strategic assets through long-term ground leases—where private developments could occur on state-owned land—to pay for the transition."

The State of Texas has historically invested more in short-term leases that provide quick gains rather than long-term revenues, Dukes said. For example, the TFC recently relocated the Texas Real Estate Commission into the Stephen F. Austin building at 1700 N. Congress Ave. from a building the state had been leasing for more than 30 years.

"The state virtually paid for that space," Dukes said. "It takes typically 20 years to 25 years to pay off one of these buildings. The real estate commission had been there for 35 years, but the state has nothing to show for it at this point. So we're trying to prevent that from reoccurring, and I think the taxpayers can appreciate the fact that at some point—it won't be today—but at some point they will own the buildings and will no longer have to dole out appropriations to continue to lease space."

Addressing long-standing challenges

Charlie Betts, executive director of the Downtown Austin Alliance, said he is excited to see an initiative that calls for better use of state land downtown, but has reservations about the influx in state employees who will need to commute into Central Austin every day.

"Some of the redevelopment would logically affect some of the parking garages, and all of that will occur over a period of time, but it's not a chicken-or-the-egg type of thing," Betts said. "Public transportation services need to be there and operational for all of this to happen, I think."

The city's streets have already been built, Betts maintained, and it would be difficult to expand roadways to accommodate the already large number of drivers using those thoroughfares. Instead, local agencies need to continue to place a priority on developing a comprehensive public transportation system.

"We think that is the biggest threat to the vitality of downtown," Betts said. "We can build [road] loops until the cows come home, but that just encourages growth out there. There are more and more folks who work in the central city, utilizing our already overused, congested roadway system as we continue to grow and every year extending commute times. At some point it becomes such a hassle to come into downtown that we think the growth will [subside]."

Moving forward

The Planning & Asset Management Division oversees all of the State of Texas' facilities, which include 28 million square feet of office space and 1,490 leases. It is attempting to consolidate office space across the board, which means re-evaluating every property the state maintains or operates in. For Austin, Dukes said this plan is expected to be carried out and fulfilled by 2020. But for now, the division is working with local agencies and transportation groups to ensure the massing study's visions for the Capitol complex coincides with city and county government plans. The division will also soon hire a group of professionals to help outline a set plan and cost analysis.