The Rusty Mule draws nightly crowds in a part of Southwest Austin on Hwy. 290 that is largely undeveloped.

The outdoor bar and food trailer park fills its tables with families who eat tacos and barbecue and adults who patronize the bar made from a repurposed trailer.

To the east and west of The Rusty Mule is a hodgepodge of retail strips, gas stations, homes, land for sale or lease, and the occasional trendy, urban business.

But in five to 10 years, Hwy. 290, from Dripping Springs to the Y at Oak Hill intersection, will look completely different and move away from its rural, Hill Country roots, according to several people involved with development on the corridor.

“The [Hwy.] 290 corridor as a whole, from Southwest Austin to Dripping Springs, will really be the growth engine for Austin over the next five years,” said Daniel Campbell, Endeavor Real Estate Group principal.

The new development along Hwy. 290 will be retail-driven, Campbell said.

Tommy Tucker, Crescent Communities residential vice president for Central Texas, echoed the sentiment. He said there will be more small offices and retail centers as opposed to large subdivisions along Hwy. 290 because the infrastructure needed for large housing is going to be difficult to attain.

“From the Y to [Belterra], I don’t expect to see any major subdivisions popping up soon,” Tucker said.

Tracing the growth

From 2009 to 2013, the average daily traffic on Hwy. 290 at the Fitzhugh Road intersection grew from 28,000 to 31,054 vehicles, according to the Texas Department of Transportation.

“When we first came here there was nothing around, and now there’s a tremendous amount of traffic,” said Robert Blankenship, co-owner of The Rusty Mule. “People want a close drive into the city of Austin; they don’t want to be out in the suburbs. Now there’s Belterra, Highpointe, [and] Ledge Stone [along Hwy. 290].”

The Rusty Mule opened in March, Blankenship said. The land was previously a used-car dealership before transforming into an outdoor bar and food truck park.

Belterra is a 1,600-acre master-planned community on its way to having 2,000 homes. The community began development in 2003 and now has more than 1,400 homes.

“Hwy. 290 has always been poised for significant growth because it is a major highway,” Tucker said.

Campbell said people are becoming attracted to Hwy. 290 because of the availability of “move-up” homes, or houses that offer upgraded features and amenities compared with one’s current home.

Gray Butterfield, owner of Goin’ Postal, a mail services store that opened on Hwy. 290 in February, said half his customer base is longtime Hwy. 290 residents who want the rural lifestyle, and the other half is newcomers to the area who want the suburban lifestyle.

The Cedar Valley Village retail center in which  Goin’ Postal is located is brokered by AMS Real Estate Services. Sean Gildea, a broker with the company, said the retail demographic in the area is high-income shoppers.

“I think the attraction for people who want to live out there is that it’s still a little bit more rural than the suburban parts of Austin, and they want that country feel,” Gildea said.

Other businesses that have opened on Hwy. 290 within the past five years include restaurant Trudy’s Four Star, Last Stand Brewing Co. and Deep Eddy Vodka Distillery. Food Trailer Via 313 opened its first brick-and-mortar location in April on Hwy. 290, and RediClinic expanded by adding a Dripping Springs location on Hwy. 290 in April.

“I think the attraction for people who want to live out there is that it’s still a little bit more rural than the suburban parts of Austin, and they want that country feel.”

–Sean Gildea, broker with AMS Real Estate Services

Resident James Kennedy said he has lived in Southwest Austin for a decade and managed local liquor store Cedar Valley Spirits on Hwy. 290 since 2006.  He said he welcomes the steady growth.

“There have been a large number of [residents moving to] this area, and they need services,” Kennedy said. “They need a place to get a pizza, ship things or get their nails done.”

More buildings, more vehicles

Endeavor, credited for The Domain in Northwest Austin and Southpark Meadows in Southwest Austin, is developing Belterra’s mixed-use center north of the master-planned community.  The 275,000-square-foot project is slated to be built in phases starting in early 2016.

To the east of Nutty Brown Road is land that H-E-B acquired in May, though the company has said there are no plans to develop the site.

Around The Rusty Mule, Blankenship said more homes are being built south of the property, and a “megachurch” with a retail front is being built east of the property.

Projects slated for the Hwy. 290 corridor include Lox, Box & Barrel, a fast-casual gourmet deli, and the Southwest Center retail strip.

Developer Hat Trick Development LLC broke ground in June on Medical Towers at Sawyer Ranch. The three-story development will feature medical office space and an urgent care facility when it is completed in summer 2016.

And along the corridor are at least seven signs displaying land for sale or lease for commercial purposes.

But several experts said they anticipate the traffic to worsen on Hwy. 290 as it gets built out.

TxDOT is making configuration changes to the Y at Oak Hill intersection. The traffic flow improvements are scheduled to be complete in August, but the project is on hold until a water line under William Cannon Drive is moved, TxDOT spokesman Christopher Bishop said.

TxDOT made additional traffic improvements to Hwy. 290 by adding paved shoulders and a center turn lane from Circle Drive to Oliver Drive.

“[Hwy. 290] is in very good shape, but it’s busy,” Kennedy said.

Butterfield said traffic is only going to get worse, and Gildea said the traffic at the Y at Oak Hill is “a nightmare” no matter what time it is.

“[Traffic] is an issue all around Austin,” Gildea said. “But I always tell people that’s the biggest issue we have to worry about.”