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MULTI-USE DOMINATES TEXAS' CAPITAL CITY

“Keep Austin weird,” some small-business advocates in that city have urged. However well advised such a sentiment may or may not be, one thing is sure: The Texas capital, whose population has grown from 650,000 to 750,000 since 2000 and whose metro area has increased from 1.25 million to 1.55 million, is still landing its fair share of new shops, albeit almost exclusively within the high-density, high-cost framework of mixed-use urban in-fill.

The Domain, rising on a defunct chunk of the IBM campus in northwest Austin's high-tech corridor, not only fits that bill, it stands as the grandest of several major projects recently devised to cater to the city's up-and-comers. Developed jointly by Simon Property Group and Endeavor Real Estate Group, the Domain will contain 1 million square feet of retail, 5,000 residential units, several hotels and some 3 million square feet of offices when it is built out early next decade.

“We are mixing many uses there and vertically layering them, while bringing luxury tenants to market that had only been available in Houston and Dallas,” said Kathleen Shields, Simon's senior vice president of new development. The 700,000-square-foot first phase, which was about 90 percent leased when it opened last year, contains a Main Street center anchored by Macy's and the city's first Neiman Marcus. Rounding out the first phase are some 90,000 square feet of offices and about 400 upscale rental units. A Westin hotel is on the slate for an opening next year.

Austin “has good developable in-fill sites, which the city has been very good about identifying,” Shields said. And there is much more to come. Endeavor Real Estate will add a two-level, 149,000-square-foot Nordstrom store by the fall of 2011, in addition to three more hotels, even more offices and up to 3,000 additional residences. The project is banking on some $60 million in tax subsidies over 20 years, though a citizens' group has placed an amendment on the November ballot that would limit Austin's ability to use tax revenue to fund future retail. Simon says it expects the city to abide by its original agreement regarding The Domain.

The Weitzman Group is leasing a 90,000-square-foot addition to The Triangle, a mixed-use development on Guadalupe Street, near the University of Texas. Flipnotics, Galaxy Cafe and Tito's Greek Grill have joined Fish City, Mandola's Italian Market and OfficeMax at the project, which will be completed later this year.

Stringent zoning laws have pushed most conventional big-box development outside Austin. Wal-Mart opened Supercenters in the neighboring burgs of Pflugerville and Four Points last year, and Lowe's Home Improvement opened a 150,000-square-foot store in once-rural Hutto. The HEB grocery chain's large-format HEB Plus opened 150,000-square-foot stores in the towns of Kyle and Leander. “We're happy to be doing business in the central Texas market,” said Lance Morris, president of Weitzman's Austinoffice. “All that doom and gloom really hasn't shown up here.” — Steve McLinden

Mixed greens

Work has begun on another high-profile, mixed-use project in Austin: the $750 million East Avenue, slated for a 2009 first-phase completion, on the former Concordia University campus off Interstate 35. The project will blend up to 325,000 square feet of retail with 1,500 living units and will feature a Hyatt Andaz luxury hotel and 600,000 square feet of office space. The developer, Austin-based East Avenue Investment Group, says it will seek LEED (Leadership in Energy & Environmental Design) certification.