Stacy makes first move to clear the way for Congress Avenue project
Bank branch to move; Stacy says long-delayed venture closer to reality
By Shonda Novak
May 18, 2007
Austin developer Tom Stacy says he is clearing the way for his ambitious mixed-use project at Congress Avenue and Fifth Street, which is to replace a modest four-story bank building with a dramatic 47-story skyscraper.
Step one has been to relocate the tenants from the smaller building to the 26-story office tower next door, which Stacy also owns.
The biggest tenant, Bank of America, will move its downtown branch and other operations into the office tower in December. Most of the other tenants in the smaller building also will relocate to 515 Congress.
When Stacy announced the plans in December 2004, he said his goal was to break ground in early to mid-2006, with a late 2008 opening.
But Stacy said it has taken longer than expected to relocate the bank and other tenants.
"It's taken us a couple of years just trying to get all the ducks in a row to keep things moving," he said.
The new Bank of America lease, which took two years to negotiate, was particularly complex, mainly because its existing site is a regional banking center that houses multiple operations, Stacy said.
The announcement of the project was front-page news. At the time, it was the biggest and most ambitious project proposed for downtown, with stores, offices, a 10-story hotel and uas many as 350 apartments and condominiums. Last year, Stacy unveiled a dramatic design by the renowned Pelli Clarke Pelli architectural firm.
Stacy has since simplified the project, eliminating the hotel and apartments and focusing on two levels of retail, 200 condominiums and 330,000 square feet of office space.
Stacy said he has no projected timetable for starting the project with financial partner Walton Street Capital. He said he will continue watching the market, particularly demand for office space, to determine a start date.
He said mixed-use projects like his are complex because there has to be a market for all the components at the same time.
"Even if the condo market stayed hot forever, we still have to have the office market strong enough to support a new building," Stacy said.
Although downtown's office market continues to strengthen and rents are rising, "rents are still not at a point to support high-rise construction," he said.
The condominium market also has become more competitive, with a wave of projects either planned or under way. Work is expected to start this year on the 55-story Austonian luxury condominiums on Congress at Second Street, and on the 30-story Four Seasons Residences on Town Lake, among other projects.
Stacy's plans include a 13-story, 1,200-space parking garage in the block behind his proposed project. It will include a new Bank of America drive-in branch on the ground floor, a high-end restaurant and shops on the Fifth Street side.
Kenny Wilson, president of Bank of America's South and Central Texas operations, said the bank's new facilities will have state-of-the-art amenities such as conference rooms that can serve a variety of functions.
In addition to his planned high-rise, Stacy recently added to his downtown holdings.
He has purchased most of the land beneath Littlefield Mall, an apartment, retail and parking garage structure at Sixth and Brazos. Through a ground lease, he will receive rent from the owners of the Littlefield Mall.
"It's just a good position to try to buy everything in that block," Stacy said.
And for the second time, Stacy is about to become part-owner of Austin Centre at Eighth and Brazos. He will join Walton Street Capital in the purchase, which includes a 354,000-square-foot office tower and the Omni Hotel.
The sale is expected to close next week, Stacy said. The owner, Crescent Real Estate Equities, is selling all of its Austin properties.