Gables plans downtown tower

Austin Business Journal - April 20, 2007

Amid a flurry of high-rise residential activity in the southwestern quadrant of downtown, Gables Residential has purchased a nearly half-acre site at Fourth and Guadalupe streets for a new mixed-use apartment tower.

Gables bought the former Fox & Hound Smokehouse and Tavern site from a group of local investors; they would not disclose the sales price.

The property at 401 Guadalupe St. -- at the northeast corner of the intersection -- backs up to the Plaza Lofts development at Fifth Street and Guadalupe, and is across the street from Republic Square Park.

A representative of Atlanta-based Gables confirmed the property purchase but said the company's plans there are not finalized. Sources say Gables is planning a mixed-use tower with apartments and ground-floor retail space.

Under current zoning that allows for an 8-to-1 floor-to-area ratio, the property can support nearly 140,000 square feet of enclosed space and up to 70,000 square feet of parking. But since the site is not within any of the protected Capitol-view corridors, the developer could seek a variance to allow for increased density.

Gables is already working on a mixed-use high-rise nearby at North Lamar Avenue and West Third Street, scheduled for delivery in 2009. Gables Park Plaza will include 314 apartments and 100 condos along with 40,000 square feet of retail and 20,000 square feet of office space. In that case, the company asked the city for a variance to allow another 75 feet of building height so it could construct a 195-foot-tall tower.

A project by Gables at Fourth and Guadalupe would round out the edges of development around Republic Square Park, which itself is slated for a significant investment. On the block south of the park, the Austin Museum of Art is quietly working on plans for a mixed-use development that would include condos and a new home for the museum. To the north, partners Andrews Urban LLC and Novarre Group are planning a roughly 40-story tower at the current downtown post office site that will feature retail, a hotel and about 500 condos. Finally, to the west of the park, demolition continues on the former Intel Corp. shell that will make room for a new federal courthouse.

The newest Gables project would join an already highly active apartment building boom in the southwestern section of downtown. Phoenix Property Co. is building a warehouse-style apartment project at 300 N. Lamar Blvd. that will include 154 units. At Guadalupe and Second streets, AMLI Residential Properties is constructing a 231-unit high-rise that will include ground-floor retail and extend the Second Street shopping district to the west. And at Fifth Street and West Avenue, ZOM Texas is building Monarch, which will feature 305 apartments along with 9,000 square feet of retail. All of those projects are scheduled to come online before the end of 2008.

Taylor Bowen, senior vice president with AMLI over the Austin market, says the area of downtown west of Congress Avenue and near Town Lake is gaining a critical mass of residential space at a time when Austin is making a big push for downtown living. He says the success of AMLI Downtown, the company's first project that opened last year on Second Street, illustrated the demand. Now, he says, it's a matter of seeing if there's enough of that demand to go around for the numerous projects on the drawing board.

"I do worry ... anytime you see this many new units coming online it makes you concerned," Bowen says. But the city's strong job creation estimates and the move to attract more businesses downtown bode well for the urban living environment, he says, adding that projects like AMLI's -- which will be ready this fall -- will be able to capture the ready market. Unlike the condo projects slated across downtown that are more of an investment for the buyer, apartments are often attractive to those residents looking to live in the heart of the city without making a long-term commitment. And despite higher-than-market-average rental rates, downtown apartments are still cheaper than the monthly mortgage and related fees of comparable condos. Still, Bowen says, an overbuilt rental market can be detrimental to all of the properties in the game, no matter when they come online.