Plans Revamped for Site Anchored by H-E-B and Chanel Factory
By: Marissa Luck - CoStar News
A huge mixed-use project anchored by grocery store H-E-B and a Chanel-Capsum cosmetics factory is growing bigger in scale on a site just south of Tesla's proposed factory in Austin, Texas.
The 314-acre project previously called Velocity Crossing has been renamed Velocity and now has a new design with an additional 1.5 million square feet and more nature slated to be preserved, according to a statement from Marketplace Real Estate Group.
The 7 million-square-foot district is planned on land just south of State Highway 130 next to the Austin-Bergstorm International Airport and just south of the Austin Harold Green parcel, where Tesla has proposed building a large manufacturing auto plant on 2,100 acres. Velocity doesn't have a central address yet, but the new H-E-B is planned for 3208 E. Highway 71 in Del Valle.
Austin-based Marketplace Real Estate Group recently added Texas-based Presidium Group as a joint venture partner on the project.
“We’ve done our best to update the land plan in a way that respects community wishes and market demand. Velocity’s inclusion in an Opportunity Zone has also attracted significant interest from both investment capital and companies seeking to locate within the development,” said Doug Launius, principal with Marketplace Real Estate Group, in a statement. “Our new partner enables us to be even more nimble as Velocity progresses.”
The huge project would be roughly the same acreage as The Domain, the popular open-air shopping and business district in North Austin often referred to as the city’s second downtown.
Marketplace Real Estate Group’s vision for Velocity now includes a total of 2,683 apartment units and 585,000 square feet of flex industrial and creative office space. Developers are planning 310,000 square feet of commercial space for retail, restaurants, three hotel sites and a movie theater.
The master plan also calls for 2.9 million square feet of office space, with enough room for two large corporate campuses and traditional office space, according to the statement.
Plans for the district weave together nature and outdoor activities with urban amenities to “honor the vibe of Austin,” according to marketing materials on Velocity’s website. International architecture firm Sasaki planned the resdesign to emphasize the property’s ties to nature. The master plan includes pockets of green space throughout the district with a 42-acre park along Onion Creek, 8 miles of pedestrian trials and a 7-acre central park, according to the statement.
"Everything about the project’s redesign is to create a better sense of community in a walkable setting. Uses are more integrated and now there’s more connected open space," Launius said in an email. "We want Velocity to mature in a way that brings people together, respects nature and helps businesses of all kinds thrive.”
Developers are breaking ground in early 2021 on a 295-unit apartment community called Presidium Velocity. Presidium Group is finalizing financing and a site development permit is underway with the city of Austin, a spokesperson said in an email.
The apartment project will be followed by a ground breaking in early 2021 for an 140,000-square-foot creative office and amenity space that is expected to house small businesses, restaurants and health and wellness tenants, according to the statement.
The mixed-use district’s first new roads are expected to be complete next year to serve the new H-E-B planned at the southeast corner of State Highway 71 and FM 973. Phase two of the roadwork will break ground in the first quarter of 2021.
Marketplace Real Estate Group initially purchased 390 acres at the southwest corner of SH 71 and SH 130 back in 2014. H-E-B purchased 17 acres for a new grocery store at the site back in 2016.
An entity tied to luxury brand Chanel and French cosmetics startup Capsum also purchased 50 acres there in 2018 for a new manufacturing plant under the code name Project Bluewave, according to Travis County records. Capsum has publicly said it plans to open the sustainable cosmetics plant in the Velocity project this year where it is expected to make products for corporate clients.
Next to Velocity, Austin Community College is planning an 124-acre campus to offer technology programs focused on training students in the automotive, building construction, heating and air, welding and jewelry industries.
The Velocity district is within a federally designated opportunity zone, the city of Austin’s "Desired Development Zone" and also a "Triple Freeport Zone," which exempts businesses from paying taxes on inventory that leaves the state within 175 days.
The development could be a major economic boost for a historically disadvantaged area of Austin.
“For years and years, residents of Southeast Austin have wanted new development that adds to their neighborhoods without negatively impacting them,” said Austin Mayor Pro Tem Delia Garza in a statement. “With Velocity, we are gaining housing, places of employment and hopefully, a grocery store. The Velocity team has shown great care and concern for the local community and I'm grateful for their work to understand the community and their concerns.”