Council delays HealthSouth vote but OKs Red River Street fee waiver

City Council members will have one more week to think about whether they want to choose a design team made up of Aspen Heights Partners, Civilitude, Studio Balcones and STG Design to redevelop the former HealthSouth tract at 1215 Red River and 606 E. 12th St. into a modern complex with apartments, condos, a 15-story office tower, an elevated plaza and retail space on the site.

Staff members have recommended the Aspen Heights design team. The item was on Thursday’s agenda, but Council had a number of questions and wanted an extra week to get answers. The final meeting of the year is next Thursday, Dec. 10, so there will be pressure to get things done at that meeting.

Robert Spillar, director of the Transportation Department, told Council Thursday that whichever firm develops the HealthSouth site will not be responsible for $3.3 million in right-of-way fees. That was a surprise to Council members, and triggered questions about whether the project could include additional affordable housing.

Spillar said that the Travis County Healthcare District, known as Central Health, will soon begin work on the realignment of Red River Street between 12th and 15th streets as part of redeveloping its campus. Normally, temporary use of right-of-way and excavation in the right-of-way would cost the builder $3.3 million. However, the city recently came to an agreement with Central Health to ask Council to waive those fees, he said.

In a memo, staffers explained that failure to collect the $3.3 million would mean the department would not get that revenue. However, they had not budgeted the money either.

Council Member Alison Alter was not totally convinced that she should vote for the fee waiver. Although some of her colleagues had questions about how this happened, she was the only member who did not want to vote on the item this week. She asked Spillar whether it would be a problem to postpone the fee waiver along with the vote on choosing the development team.

He said, “In terms of the consequences, we have a contractor ready to start the construction. The provider of that street, which is UT development, has already paid all the permits and the design and they are ready to get started and every bit of delay delays them in moving forward and being confident in the construction.”

In response to a question about who pays for the cost of moving Red River, Spillar said, “All costs of construction are being borne by Central Health. We will come to you to transfer the right-of-way to them. That is part of the public plaza design process.” After all, he said, “They are building a new street on behalf of the city.” He said most of the work being done in the right-of-way relates to drainage at the corner of Red River and 15th Street.

According to a statement from Aspen Heights Partners, “At the core of the community benefits provided in our proposal is a vision for an economically inclusive community. Our proposal includes over 25 percent affordable rental housing at 60 percent and 50 percent of area median income; as well as affordable ownership opportunities for households at 80 percent AMI.”

Aspen Heights Partners also described its proposed development as creating “opportunities to connect and engage with our surroundings through benefits such as a half-acre elevated public park overlooking the state Capitol and Waterloo Park,” as well as a culinary space and space for music and the arts, all designed to Austin Energy Green Building 4-Star ratings.

Council members Kathie Tovo, Greg Casar and Leslie Pool all indicated that the developer might be asked if it could provide more affordable housing since it’s no longer being required to pay the $3.3 million in right-of-way fees. There will no doubt be a lot of discussion about that question over the next week.

Rendering of proposed project courtesy of the city of Austin by Aspen Heights Partners.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.