By: Erin Edgemon – Austin Business Journal
A major mixed-use development planned for Southeast Austin is now even larger, according to the developers.
Plans for Velocity, formerly called Velocity Crossing, now call for 7 million square feet of apartments, offices, industrial and other commercial space on 314 acres east of Austin-Bergstrom International Airport along the State Highway 130 toll road, Austin-based Marketplace Real Estate Group said in a June 15 announcement. Originally, 5.5 million square feet of development was proposed.
Included in the revised plans are 2,683 apartments; 2.9 million square feet of office space, allowing for two large corporate campuses along with traditional office space; 585,000 square feet of flex industrial and creative office; and 310,000 square feet for other commercial uses including retail, restaurants, a movie theater and three hotels. It will all surround a seven-acre central park.
Dallas-based Presidium Group LLC also recently signed on as a joint venture partner on the project. As the Austin Business Journal first reported in March, the apartment developer plans to build a 295-unit complex at Velocity.
Construction is slated to begin in early 2021 on that apartment complex called Presidium Velocity, followed shortly by 140,000 square feet for retail, restaurants, creative office space and health and wellness uses, the developers announced June 15.
Internationally acclaimed architecture and planning firm Sasaki redesigned the land plan for the massive development, creating more than 1.5 million space that what was originally designed.
“This was a matter of going through and maximizing the density on the property,” Marketplace founding principal Karl Koebel said. “We have designed this thing down to the square inch. Through our market research and working with Sasaki, we have come up with a plan that takes care of all of the concerns of every user.
With the metro's population expected to grow from about 2.2 million today to an estimated 3.6 million by 2040, the east side of the city has room for many of the homes that need to be built. That means the area east and south of the airport is poised for massive growth in the next 20 years.
Denser, master-planned communities that include places to live, work and play like Austin Green — the biggest development proposed for the east side — will be more in demand as the city continues to grow. Plans for Austin Green call for 12,000 residential units and 2.25 million square feet of commercial space along SH 130 from the Colorado River to FM 969.
While much smaller, plans for Velocity are still ambitious and could bring much-needed commercial space to this part of the city especially with the addition of an H-E-B grocery store. The San Antonio-based grocery giant bought property in the development for a new store in 2016.
"We currently do not have an update on potential timing and there are no plans to build an H-E-B in Southeast Austin in the immediate future," H-E-B spokeswoman Leslie Sweet said in an email. "H-E-B will continue to monitor market demographics and pursue suitable options for potential future development and provide updates as they develop."
Austin City Mayor Pro Tem Delia Garza said in a statement that the Velocity team has "shown great care and concern for the local community" in its design of the project.
“For years and years, residents of Southeast Austin have wanted new development that adds to their neighborhoods without negatively impacting them,” she said. “With Velocity, we are gaining housing, places of employment and hopefully, a grocery store."
Being in a federal opportunity zone — as well as its location near the airport — has already attracted significant attention to Velocity, Doug Launius, a principal at Marketplace, said.
“We think the demand is going to be extremely positive,” he said. “We are already getting interest from office users. The location next to the airport is attractive to many companies.”
Because Velocity is a long-term project, Launius said, the developers aren’t concerned about the country being in a recession. He said Austin is still the No. 1 city in the country for real estate investment.
The first phase of roads within the project will be complete later this year, focused around the H-E-B-owned site at the southeast corner of state Highway 71 and FM 973, with second-phase roads breaking ground first quarter of next year.
The new land plan incorporates a 42-acre public park along Onion Creek and numerous open spaces including a seven-acre signature central park, according to the developers. The joint venture said it will make a “hefty investment” in parks, open space, trees, landscaping and creek preservation efforts. Updated plans also incorporate about eight miles of internal pedestrian trails that will connect with others along the eastern side of Travis County.
“Austinites have always felt passionately about preserving nature’s greatest gifts, and our new land plan ensures Velocity’s natural treasures will thrive for generations to come,” Koebel said in a statement. “Our sense is that people appreciate breathing room now more than ever, and this site will have everything you could want within walking distance – including a place to get away from it all.”
Marketplace Real Estate Group initially purchased the 390 acres located at the southwest corner of SH 71 and SH 130 back in 2014. Since that time, the developer sold parcels to H-E-B in 2016 and to French cosmetics company Capsum, codenamed Project Bluewave, in 2018. Austin Community College also owns 124 acres adjacent to Velocity where it plans to build a regional workforce campus for 10,000 to 12,000 students for various kinds of technology programs — including ones focused on automotive, building construction, heating and air, welding and jewelry making.
Velocity is also in the city of Austin’s Desired Development Zone and Triple Freeport Zone, which exempts businesses from paying taxes on inventory that leaves the state within 175 days.