Council chooses developer for St. John Home Depot site

After years of community engagement, redevelopment of the city-owned St. John Home Depot site is finally happening.

City Council Thursday voted unanimously to select the joint proposal from developer Greystar and the Housing Authority of the City of Austin. The proposal includes 560 residential units – half of which would be affordable at 50 to 70 percent area median income – along with 15,000 square feet of community commercial space and an expanded and improved St. John Park. A former Home Depot and defunct car dealership currently occupy the 19-acre East Austin site.

“Too often, families in St. John have either been left behind by the city or pushed out by gentrification,” said Council Member Greg Casar, who has pushed for the redevelopment before and during his time on Council. “With this project, we’re demanding something different.”

Casar said that the project, located in his District 4, will do right by the mostly Black and lower-income community, offering right-to-stay and right-to-return policies, on-site community benefits and continued neighborhood involvement.

Neighbors who spoke at Thursday’s meeting supported the project, but were still wary about its potential for gentrification. “We ask that you don’t just take our property and make it something that is for others that don’t look like us,” said Terry Mitchell, an entrepreneur who grew up in East Austin.

With Council’s vote, city staffers may now begin negotiations with the development team with the goal of bringing back a master development agreement before Council. If Council approves the MDA, construction can begin as soon as next year. Council in 2017 signaled its intent to redevelop the site, and community engagement has been ongoing since.

Plans could change as the project goes through the process, which takes several months. Council’s direction pushed for more from the project, including family-sized units, a child care center and affordable local businesses chosen by the community. Separately, Casar said he wants to see less surface parking and even more housing.

The Greystar/HACA proposal scored best in metrics prepared by city staffers compared to other proposals, leading staff to recommend the team last week. The decisive factor may have been the fact that the chosen proposal does not need city subsidies. Casar compared the proposal to two recent affordable housing projects that both received about $20 million in city and state subsidies for around 150 homes each. “In this case, we’re getting 280 low-income homes,” he said, “so nearly twice as many homes for zero in city subsidy.” Casar did, however, leave open the possibility of offering subsidies to increase the affordable housing on the site.

The redevelopment is “challenging” for many reasons, Casar said. First, the city unwittingly placed a large barrier to housing development on the site when, envisioning a courthouse and police station, it paid $10 million in public safety bond money for the land in 2008. Those plans fell through, but the use of bond money means the site is restricted to public safety uses – unless the $10 million in bond money is repaid. Greystar, as part of the proposal, will pay the debt in full.

On top of being “over $10 million in the hole from the beginning,” Casar said, the site “has a building that is unusable that we purchased at a price when it was usable,” adding to the cost of redevelopment. The bond debt was the main factor preventing the other uses that have long been floated for the site, such as creative space or permanent supportive housing for people experiencing homelessness.

The main point of contention on Council was whether to require the developer to lease the site from the city or include a sell option. Though all Council members who aired an opinion favored leasing, some wanted to prevent the option of selling the property. The direction Council passed included the preference for a lease, but also the option of a sale should a lease not be feasible. Ultimately, the final decision about this and other aspects of the proposal is up to Council, which has to approve the MDA before construction can begin.

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Posted In: Development, District 4