The Texas Department of Transportation will turn dirt on the I-35 Capital Express Central project this year, the biggest and most costly highway project in Austin at $4.5 billion.

Over the next year, drivers will sit through the onset of traffic congestion and lane closures on I-35 that could persist for the next decade. Residents will also see businesses displaced by the project relocate or inevitably close.

City leaders are hopeful it will alleviate congestion, improve walkability, and mend the physical and symbolic scar I-35 created though the city’s center by increasing east to west connections to help pedestrian and driver mobility.

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TxDOT’s plan for the I-35 face-lift includes removing the upper decks, sinking portions of the roadway about 25 feet below ground level, adding two high-occupancy vehicle lanes in each direction and widening the corridor to a range of 17-22 lanes.

City leaders have a separate but related project to add caps, or large decks, and stitches, or wide bridges, on top of the sunken roadway. The vision for the project is to add amenities like parks and coffee shops on top of the caps. The project will cost upwards of $800 million and remains mostly unfunded.

Zooming in

TxDOT will kick off the decade-long project in mid-2024 with reconstruction of the Riverside Drive intersection and the east side of the pedestrian bridge over Lady Bird Lake. Crews will excavate and rebuild the Martin Luther King Boulevard Bridge along I-35 from Airport Boulevard to downtown this fall.

While no traffic control plan for the project has been released by TxDOT, Public Information Officer Brad Wheelis said the project will look similar to I-35 Capital Express South, which has led to traffic backups and long-term lane closures.

What they're saying

As the groundbreaking nears, many business owners among the 59 to be displaced by the project say they are scrambling to find new locations and struggling to advocate for themselves in negotiations with TxDOT.

During the right-of-way process, TxDOT acquires property at market value and covers relocation costs. However, for renters, the assistance is limited to moving support and “related expenses,” a provision many business owners argue falls short of their actual needs.

Taqueria Los Altos, a Mexican restaurant affected by the project, has until March to move to its new location next to Galaxy Theaters in North Austin. Manager Armando Aguirre is hopeful about the new spot, but it requires new flooring, kitchen upgrades and other renovations throughout the dining area—expenses he isn’t sure they can afford.

Iyesha Grant, owner of Esh Blue nail salon, has already moved out of her former location and doesn’t anticipate reopening in Austin, even with TxDOT’s relocation assistance.

“Trying to find a place in Austin just doesn’t seem possible,” she said.

Israel Linares, a senior analyst for CoStar Group, said that what businesses along I-35 are experiencing is consistent with the broader retail market in Austin.

“These tenants are stepping into a particularly hot market characterized by historically low availability, which I think will present challenges for businesses looking to find space and may entail accepting higher rental rates,” Linares said.

What's next

In the coming months, city leaders and local business owners will navigate this wave of change, which TxDOT officials hope will have a positive impact on the community.

This will be the first major upgrade to the corridor since the 1970s and aims to increase the capacity of total daily trips.

Concurrently, Austin officials will need to aggressively pursue funding for the cap and stitch project to meet their deadline.

In February, council will hear back on whether they received a $105 million federal grant that will fund a 5.2-acre deck between East Cesar Chavez and Fourth streets. That decision will guide council members on what funding moves to make next, including applying for federal Transportation Infrastructure Finance and Innovation Act loans, calling a bond election or garnering philanthropic support.