"Coolness factor" draws developers to Austin Tx

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He and other developers quickly discovered the answer. Bar and restaurant operators were expanding downtown’s vibrant Sixth Street entertainment district into East Austin. Millennial renters and single-family home rehabbers were moving in and gentrifying the predominantly Hispanic neighborhood. The Lance Armstrong Foundation’s move into a converted East Austin warehouse had also generated interest among creative companies looking for new locations. (It is now the Livestrong Foundation.)

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“This is a creative neighborhood,” Mr. Delk said, “and edgier companies are positioning themselves appropriately.” Developers have built hundreds of apartments in the area, and more are on the way. They’re primarily targeting blocks on either side of Sixth Street in proximity to the Plaza Saltillo commuter rail station at Fifth and Comal streets. Developers have also added about 140,000 square feet of office space, and they’ve proposed adding some 770,000 square feet in the coming years, according to the Austin real estate brokerage Aquila Commercial.

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“The main reason people are coming to the east side is for the coolness factor,” said Jay Lamy, a principal with Aquila Commercial who represented C3 Presents and is an investor in the neighborhood. “If we can keep the residential, retail, restaurants and hotels coming, it’s only going to fuel the desire for more companies to locate here.” The most ambitious project proposed to date, however, has been the most contentious. The Endeavor Real Estate Group, a local developer, and Capital Metropolitan Transportation Authority, Austin’s regional public transportation provider, have joined to turn an old 11-acre rail yard into a “transit-oriented development” — a dense mix of uses near public transportation — at Plaza Saltillo. The plan calls for 800 apartments, 120,000 square feet of office space and 110,000 square feet of stores and restaurants. Columbus Realty Partners, a Dallas-based apartment developer, is also a partner. The developers have agreed to lease the rail yard from Capital Metro for about $200 million over 99 years.

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