Two Downtown Austin Redevelopment Sites Fuel Speculation

Two prime redevelopment sites on the eastern edge of downtown Austin are stirring fresh speculation about what could rise next — and how dramatically they could reshape a fast-changing stretch near I-35.

The most visible question mark sits where the Frank Erwin Center once stood. Bulldozers wiped the drum-shaped arena from Austin’s skyline last year, leaving a fenced-off, 19-acre site north of 15th Street on Red River at 1701 Red River Street. The land was long expected to host the future UT Medical Center, a joint effort between the University of Texas at Austin and MD Anderson Cancer Center, according to the Austin Business Journal.

That plan is no longer a lock. The UT System’s board of regents is now weighing an alternative site near The Domain in North Austin, raising the prospect that the Erwin Center parcel could be redeployed for something else entirely. UT System’s board chairman, Kevin Eltife, said in November that the system is looking for a larger canvas to build “a district for the future,” language that has only amplified uncertainty about the downtown site’s fate.

With the hospital no longer guaranteed, sources say the Erwin Center land could accommodate a range of uses, from academic and research facilities to civic or cultural projects. The site’s scale, proximity to downtown and to I-35 make it one of the most consequential redevelopment opportunities in the urban core, even as highway expansion and infrastructure constraints complicate development.

Just south of the Erwin site, another major property is quietly being teed up. Austin City Council approved a rezoning this month for the former Teacher Retirement System of Texas headquarters at 1000 Red River Street, clearing the way for a uniform downtown mixed-use designation across the 4-acre block, the Journal reported. City documents say the change allows office, residential, commercial and life sciences uses and removes regulatory friction that had limited redevelopment.

Austin Real Estate Acquisitions LLC, which shares an address with life sciences-focused developer Alexandria Real Estate Equities, a Pasadena-based REIT, acquired the property in 2022 for $108 million. While the owner has not disclosed specific plans, local business groups have been told the site could support medical or life sciences uses that complement Dell Medical School and the nearby Innovation Tower.

Together, the two sites sit at the nexus of multiple megaprojects: the I-35 expansion, the planned redevelopment of the Austin Convention Center, the buildout of Waterloo Greenway and UT’s forthcoming multipurpose arena north of Erwin Center.

Market realities will matter. Office development remains a tough sell in Austin, where vacancy hovered above 26 percent in the third quarter, and millions of square feet remain available. UT’s own Innovation Tower, completed in 2022, is still largely unleased, highlighting the challenge of launching new office buildings without surrounding amenities.

— Eric Weilbacher