Latest news with #DowntownAustinAlliance
Yahoo
3 days ago
- Business
- Yahoo
Report: Slower economy doesn't dim downtown Austin's dynamism
Despite economic headwinds that have pushed office vacancies into double digits and slowed new development, downtown Austin hasn't lost its luster. That's the picture painted by the latest 'State of Downtown' report from the Downtown Austin Alliance, released last week. While slower, growth in the city's central business district is still being fueled by new developments and population growth, even as businesses adapt to changing market conditions, alliance officials said. Although downtown may be navigating a market correction, the area has "remained dynamic," said Whitney Knight, the alliance's board chair. "While new construction has slowed, this pause offers a chance to focus on quality over quantity, to activate what we've already built, and to lay the groundwork for what's next," Knight said. Still, downtown — bounded by Lady Bird Lake to the south, Interstate 35 to the east, Lamar Boulevard to the west and Martin Luther King Jr. Boulevard to the north — hasn't stopped growing. "Although office and residential vacancies increased this year, demand is still high for working and living downtown. There is more space to fill, but downtown's workforce and population are growing, and lower rates enable more people to find a place here. The hotel and retail markets enjoyed steady performance this year, although these are both navigating emerging economic challenges," the report said. "People are attracted to its diverse mix of events, arts and entertainment, recreation and industries and opportunities.' David Barbour, president and CEO of the Downtown Austin Alliance, who has lived and worked in downtown locations across the country, said the group will "double down on what makes downtown Austin great — its vibe, vitality and collaborative spirit," while continuing to "address issues that challenge its full potential: affordability, homelessness, safety and access." The Downtown Austin Alliance works with downtown property owners, residents, businesses, community organizations and government leaders to enhance the appeal of the central business district, which Mayor Kirk Watson called the city's "living room" more than two decades ago during his previous tenure as mayor. On Tuesday, Barbour was the keynote speaker at the alliance's "Future of Downtown" event held at the ACL Live at The Moody Theater downtown. 'Downtown is the cultural and economic heartbeat of our city,' Barbour said in a statement issued after the event. "This is a place where creativity thrives, businesses grow, and everyone is welcome. As we navigate major infrastructure projects, new development and population growth, our focus is on keeping downtown accessible, vibrant and open to all." The alliance has produced its "State of Downtown" report since 2019, tracking key data points on trends and economic indicators in sectors including downtown's office, hotel, residential and retail markets. Below are highlights, along with excerpts from the report elaborating on its findings. The office market vacancy rate downtown is nearly 22%, reflecting the continued work-from-home or hybrid work models post-COVID. In 2019, pre-pandemic, downtown's office vacancy rate was 3.9%, according to CoStar data the report cited. More: Austin's downtown commercial, office space seeing record vacancy rates. What comes next? "The office market continues to transform in response to companies' changing needs for space. Vacancy rates have risen over the past five years, and combined with rising inflation and interest rates, this has led to a halt in developers breaking ground on new office construction," the report said. "The era of tech giants dominating entire buildings is fading, opening opportunities for a wider range of businesses to access downtown's prime location. This diversification is a source of stability for downtown Austin." Downtown is home to 15,330 residents and 12,720 residential units. With more than 2,600 new residential units in the pipeline, increasing supply by about 28%, downtown's appeal as a vibrant urban neighborhood continues to grow. More: Demand for office space continues to struggle, while downtown Austin living in high demand "Although developers and owners have experienced some headwinds, added concessions like incentives and discounts have created an opportunity for a wider range of individuals and families to live downtown," the report said. Rental prices downtown remain above pre-pandemic levels but have dropped from their 2022 peaks due to a surge in new apartment supply driving competitive pricing. The apartment vacancy rate has increased to 12.7%, up from 9.7% in 2019. Higher capital and materials costs, along with decreased demand, have slowed new construction, but more than 1,400 units are expected to be completed in 2025, maintaining pressure on property owners to stay competitive. "Austin had the largest decline in median asking rent of 44 major U.S. metros analyzed by Redfin in January 2025," the report said. "The main driver of this decrease is that Austin has built new apartments at a far greater rate than other cities." Interest rate hikes over the past three years have cooled the housing market from the post-pandemic buying frenzy. Prices have softened slightly, and average days on market increased from 84 in 2023 to 123 in 2024. "The condo market has transitioned from a sellers' market to a buyers' market, and this trend is expected to continue as more units are delivered to the market," the report said. More: The Modern, a 56-story condo high-rise in downtown Austin, marks construction milestone Downtown's development pipeline has contracted over the past two years, a trend expected to continue throughout 2025. "Like other cities across the nation, Austin is experiencing the impact of larger macroeconomic forces such as increased interest rates and inflation. We have also experienced such a boom that a slowdown is an inevitable and healthy phase of sustainable growth," the report said. "This slowdown allows the market to absorb its recently built projects, ensuring buildings are fully utilized and contributing to the vibrancy of our urban core." Eight projects are due to wrap up this year, adding about 3.9 million square feet of space. Notable developments include the Republic office tower, which has attracted tenants, and the Waterline, which will be downtown's tallest tower and an iconic landmark alongside the Independent and Frost Bank Tower. In 2024, five projects totaling 1.11 million square feet were completed. At the end of March, 13 projects were under construction totaling 6.6 million square feet: 1.3 million in office space, 2.6 million in mixed-use, nearly 2 million in residential, and 653,500 in hotel space. These figures reflect a slowdown in private development while public infrastructure investment ramps up. Several major infrastructure and mobility projects are either under construction or breaking ground soon. These include I-35 Capital Express Central, Project Connect, Waterloo Greenway, Capitol Complex Project and the new Austin Convention Center. Convention Center Closed for demolition in April 2025, the Convention Center is set to reopen in late 2028 ahead of the 2029 spring festival season. The $1.6 billion project is funded by hotel occupancy tax and Convention Center revenue. Capitol ComplexPhase II will deliver 525,000 square feet of office space and complete the Capitol Mall, providing a continuous connection from the Capitol to the UT campus. Completion is anticipated in late 2026. Project Connect Phase I light rail will cover 9.8 miles in Austin with four key stations within the downtown footprint. Waterloo GreenwayPhase II will add nearly 1,550 new trees, 200,000 mature plants and 10 acres of seed mix. The job market downtown and citywide continues to be strong, the report said. The Austin metro area's unemployment rate fell slightly from 3.4% in January 2024 to 3.1% in January 2025, remaining below state and national levels. Despite layoffs at some large tech companies, downtown employment has grown steadily over the past four years and is now 14% higher than its early 2020 peak. Downtown's hotel occupancy rate is now 55.8%, down from 72.6% in 2019, according to CoStar figures. "Although the demand for downtown hotel space increased by 3.6% over the past year, the market is beginning to soften as the supply of new rooms begins to outpace demand," the report stated. "The Austin Convention Center closed in April 2025 for their 4-year reconstruction, and hotel operators are cautiously optimistic as conventions and large meetings move to area hotels." Retail occupancy rates have stayed steady over the last year, remaining above 97%, and tenant demand for downtown locations remains strong, the report said. Downtown's retail market bucked the general trend, with storefronts almost fully occupied at 97% — about the same level as before the pandemic, when the retail occupancy rate was 96.8%. "However, rising construction and labor costs have created a significant hurdle for some businesses to make the tenant improvements needed to enter the market," the report said. "This also puts financial pressure on landlords, who increasingly need to make concessions to close deals. Addressing these cost challenges would unlock even greater potential, allowing more businesses to follow their desire to be in the heart of Austin." Residents: 15,330 Employees: 131,833 Residential units: 12,720 Hotel rooms: 15,000+ Sq. ft. under construction: 6,632,922 Sq. ft. of planned space: 11,538,073 Source: U.S. Census Bureau; Downtown Austin Alliance This article originally appeared on Austin American-Statesman: Report: Despite challenges, downtown Austin hasn't lost its allure
Yahoo
5 days ago
- Business
- Yahoo
Office vacancy rises downtown, overall employment up report says
AUSTIN (KXAN) — Downtown Austin has entered a 'period of correction,' according to the Downtown Austin Alliance's 2025 economic impact report, with office vacancy around 22%. The report addresses things like: Past and ongoing projects Mobility Residential life Development Workforce Public Safety Culture 'Downtown is the cultural and economic heartbeat of our city,' Davon Barbour, president and CEO of the Downtown Austin Alliance said. 'This is a place where creativity thrives, businesses grow, and everyone is welcome. As we navigate major infrastructure projects, new development and population growth, our focus is on keeping downtown accessible, vibrant and open to all.' The boundaries of downtown, for the purpose of the report, is officially defined by the map below. The three primary industries utilizing office space downtown are financial services, professional services and law firms, according to the report. The DAA recognizes the changing needs for office space that have arisen since the pandemic, with more companies opting for remote or hybrid work models. This was also something heavily discussed in last year's State of Downtown report. Office vacancy rose from 17.3% in 2023 to 22% in 2024, and employees have returned to the office at 67% of 2019 levels. As the DAA recognizes this number highlights a steady shift in workplace trends, the organization is working to modify its office-space offerings. 'Although companies are seeking less space, they are prioritizing modern design and amenities to attract employees and clients; downtown officers a wealth of cutting-edge options,' the report reads. Downtown employment has increased by 14% since 2020. The below chart breaks that down. The building of the new convention center, which officially started last month, as well as other major downtown projects, 'will make downtown more vibrant and inclusive in the long term, [but] the interim construction and closures will affect how people move through and enjoy downtown. This will require city leaders to proactively address accessibility and minimize any potential negative impacts.' The current plan is to have the new facility done in late 2028 ahead of the 2029 spring festival season, which includes SXSW. 'In anticipation of the Convention Center's closure, we are actively workingwith partners to identify and inform the community on how downtown can continue to support festivals through small, local venues,' the DAA stated in the report. The DAA also said event organizers who usually use the convention center have reached out to nearby hotels about hosting events in the interim. The DAA has held several meetings over the last year and a half with the Austin Police Department (APD), security providers, government officials, residents and business owners and employees to address downtown safety concerns. This includes dedicated safety officers who patrol the area on bikes. While they don't have the authority to make arrests, they can assist in getting people off of private property if issues arise, and bridge the gap between the community and the police department. The team includes 25 staff members. Bike patrols run from 6 a.m. to 10 p.m. daily. Additionally, one person works overnight at Republic Square Park, and another staffer patrols from 5 p.m. to 3 a.m. Wednesday-Sunday in a marked vehicle. The report noted the two following trends when it comes to downtown crime: Crimes against people, property (e.g. attacks, burglaries) have decreased since 2019 Class C misdemeanor ordinance violations (e.g. camping in public, lying in rights of way, aggressive solicitation) have increased Crimes against society (drug crimes, weapons violations) have increased Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
23-05-2025
- Business
- Yahoo
Austin City Council votes to spend $104M on foundations of caps and stitches
The Brief Austin City Council voted to fund some cap and stitches across Austin There will be three downtown caps and two northern stitches. It will cost $104 million The vote on cap designs could be postponed until November 2026 AUSTIN, Texas - Austin City Council voted to fund foundations for three downtown caps and two northern stitches. It will cost $104 million. Council voted 8-2 with 1 abstaining. Council Members Krista Laine and Marc Duchen opposed the plan, while Mike Siegel abstained. The decision came after a couple of proposed amendments. What they're saying The council was split into two subquorums. Council Members Vanessa Fuentes, Mike Siegel, Krista Laine, Marc Duchen, and Paige Ellis had a more scaled-back spending plan, starting with $49 million for two foundations. The other subquorum, Council Members Natasha Harper-Madison, Jose Velasquez, Chito Vela, Ryan Alter, and Zo Qadri, originally wanted to fund all five for about $200 million. Qadri proposed a compromise of $104 million for foundations for caps at: Cesar Chavez to 4th Street 4th Street to 7th Street 11th Street to 12th Street Two 300-foot stitches from 41st Street to the Red Line or contiguous equivalent within the cost parameters set herein and with the intent to connect Red Line Parkway, the East Avenue Trail, and 41st Street, ensuring viable space for future buildings and trees, and subject to further refinement with the community. "It's a once in a generation opportunity," Qadri said before the vote. "It's not just about parks. It's about what we can do with that space." Ellis proposed another compromise that would cost about $72 million. It would have foundations for caps at: Cesar Chavez to 4th Street 11th-12th Street 1 stitch at the Redline Parkway north 1 stitch around 5th Street That amendment ultimately failed 5-6. "Today we voted on the initial investment for Caps & Stitches over I-35. One subquorum proposed more than $400M without a legitimate plan to pay for it. We proposed a more modest approach that we knew would deliver caps, stitches and still allow us to invest more dollars in our community in the 2026 Bond, as they asked for. We landed at $104M which will accomplish reconnecting our community and still leave enough for community investments," council member Ellis said in a statement. The city's overall debt capacity is $750 million. Council members for the larger plan had proposed other funding sources. "We still want to make sure that we maintain our bond capacity," Qadri said. In a statement, Davon Barbour, president and CEO of the Downtown Austin Alliance, says: "The Downtown Austin Alliance commends Mayor Watson and Austin City Council for their thoughtful leadership in committing funding for caps over I-35 between Cesar Chavez and 4th Street, 4th-7th and from 11th to 12th Streets. We'd especially like to acknowledge Council Members Qadri, Vela, Alter, and Velasquez for their leadership in championing these transformational projects. This once-in-a-generation investment will reconnect East and West Austin, create vital public space and deliver lasting economic, cultural and mobility benefits. Funding these caps is a critical step toward ensuring I-35 works for everyone—supporting connection, commerce and quality of life. We look forward to continuing our work with public, private and philanthropic partners to bring this vision to life and help shape a more accessible, inclusive and resilient downtown." What's next The vote on cap designs could be postponed until November 2026. The Source Information from an Austin City Council meeting and statements from council members
Yahoo
20-02-2025
- Entertainment
- Yahoo
Forum lays out upcoming road closures, changes in safety planning ahead of SXSW
AUSTIN (KXAN) — The Downtown Austin Alliance held its Spring Festival Season Forum today, where members, alongside event planners, city officials, and first responders, talked about their plans to handle this year's spring festival season, specifically with a focus on South by Southwest. Event organizers noted that one major difference when it comes to road closures was that Riverside Drive would be closed the first weekend of the event, as opposed to the second weekend like in years past. Meanwhile, CapMetro touted its extended service hours for the CapMetro Red Line, which will run through 2:30 a.m. on Fridays and Saturdays during the event, as well as its new rapid bus lines. Austin-Travis County EMS is adding a new position to its festival outpost — a Community Health paramedic, who focuses on mental health calls and crises during the events. The Austin Fire Department says during the South by Southwest, they'll be operating out of the fire station at 5th Street and Trinity, putting them 'right in the middle of the action.' Last year, Austin Fire said they couldn't operate out of the station due to renovations. The Austin Police Department says they'll be staffing their normal patrol shifts to 100% during the events, as well as hiring overtime staff. Last year, the department arrested more than 150 people during South by Southwest, over things like public intoxication and fighting. This year's South by Southwest festival starts on March 7, and runs until March 15. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
17-02-2025
- Business
- Yahoo
City creates plan to keep downtown ‘vibrant' amid large-scale construction projects
AUSTIN (KXAN) – The Austin City Council has established the Downtown Austin Strategic Initiative so that downtown remains safe, accessible and vibrant while transformative projects are underway. Large-scale downtown private and public projects – such as the I-35 Capital Express Central Project and the Austin Convention Center remodel – have already started or will start soon. The city unanimously approved Thursday the new office to oversee those projects. 'We have roughly $25 billion worth of infrastructure starting to be constructed roughly at the same time,' said Matt Geske, VP of public affairs for Downtown Austin Alliance. '[The program] is making sure we're planned and coordinated for the next 10 years of construction.' The initiative will work to identify funding needed to minimize disruptions throughout downtown during construction, according to city documents. The city said the needed projects may fall within the following areas: Mobility and Infrastructure Music and Arts Cultural and Historical Assets Economic and Workforce Development Public Safety Homelessness The Austin city manager has been tasked with working with downtown partners and stakeholders – such as the Downtown Austin Alliance, Opportunity Austin and Visit Austin – to develop the scope of the new initiative. 'Downtown is about to see some major change, given the transformative infrastructure projects – both public and private – that are underway. That's happening now so we need to give Downtown some focused attention to be the welcoming, engaging, vibrant, safe, and accessible place that creates smiles,' Austin Mayor Kirk Watson wrote in his 'Watson Wire' newsletter. 'Our overarching goal is to ensure we're being strategic and smart with our resources as we manage the inevitable disruption and change that will ripple through just about every facet of the City,' he wrote. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
