Council Recap: A Big Step Forward in St. John, but Much Work Remains

In a unanimous vote, City Council on Thursday, July 29 agreed to enter negotiations with Greystar Development Central on the future of a 19-acre site in Northeast Austin that the city has owned - but done nothing with - for more than a decade.

Over the past century, the property at the corner of I-35 and E. St. Johns Avenue was an orphanage and elementary school, later becoming a Home Depot and car dealership. In 2008, the city purchased the site with funds approved in a 2006 bond election to convert into an Austin Police Department Northeast substation and a new home for the Municipal Court. Those plans were scrapped, but the city still owes about $10.8 million in bond debt from the purchase.

Now, the site could become a mixed-use development with housing, a public park, retail, and nonprofit office space. Council’s decision marks a victory for the St. John community, which for the past 15 years has looked on as the site mostly sat vacant, except when it was used as storage for Austin Resource Recovery. Last year, it was repurposed for several months as a drive-through COVID-19 testing center.

Before the vote, St. John Neighborhood Association president Akeem McLennon told Council that when he moved to the area in 2017, “The old Home Depot was a symbol of blight and neglect in the community. It was overgrown and filled with trash cans.” McLennon said he was glad for the vote, but also expressed caution about how the project would proceed from here, as did other St. John neighbors who spoke.

Cherelle Vanbrakle, who grew up in St. John and who directs health promotion and community advocacy at nearby People's Community Clinic, worked closely with Council Member Greg Casar and members of the St. John community to craft a vision for the site’s future. She also said the vote was a good starting point, but more work would be needed. Vanbrakle told Council about her experience growing up in the neighborhood and about the pain she felt at no longer being able to afford to live there. “It was a heartbreak when my mortgage broker told me I couldn’t afford to live in 78722, let alone Austin proper,” Vanbrakle said.

She applauded the city’s effort on the project thus far: “Though the proposal we see does not reflect the work we’ve done,” Vanbrakle told Council, “I feel passing this is what the St. John neighborhood has wanted and needed for generations. This is a step in the right direction, but we know there is lots of work that needs to be done.”

Casar celebrated the agreement as a unique opportunity to improve a marginalized neighborhood without causing further displacement, and suggested it as a model for other gentrifying parts of Austin. “The deal before us is a significant win for affordable housing and it’s important to imagine the possibilities here as we work on other pieces of land,” Casar said before the vote. “So often we are choosing between investing in a community and gentrification. Here we can keep people in place and improve something we have too long neglected.”

The proposal, on which Greystar has partnered with the Housing Authority of the City of Austin, includes 560 housing units. Half of these would be studio and multi-bedroom apartments for households earning between 50% and 70% of Austin’s median family income. Along with the adjacent St. John Park renovated in 2019, a new three-acre park would be constructed with a splash pad, playground, community garden, and walking trails.

Greystar’s proposed site plan places the housing in the middle of the tract, with 15,000 square feet of retail and “support services space, intended to serve the current and future residents of the St. John neighborhood” fronting I-35, according to a public information packet with details on the project. Both the housing and retail would have surface parking. The Greystar and HACA proposal beat out five other bids for development on the site.

An important priority for St. John neighbors was for the project to not accelerate gentrification that’s already occurring in the area. As proposed, the developers would use Austin’s adopted but untested “right to stay” and “right to return” policies to prioritize applications for the affordable units for current and former St. John residents.

The housing mix and community benefits in the proposal are still preliminary; the negotiation to come to produce a master development agreement, which will also come to Council for approval, will likely reshape what is actually required. Casar and CM Kathie Tovo added enhancements for staff to seek in those negotiations, including opportunities for ownership of income-restricted units deeper levels of affordability, including possible permanent supportive housing.

Other asks include reducing some of the surface parking, including on-site affordable childcare, and potentially structuring the deal as a ground lease where the city retains ownership of the land. The negotiations will also involve creating a process to ensure the housing-preference policies are successful. A provision from Casar requires establishing a community advisory board to work alongside Greystar, HACA, and their partners; Laura Cortez Consulting will lead this effort.

As always, financing is a major hurdle to overcome to create all these enhancements. One of the Greystar proposal’s main selling points was its offer to pay the $10.8 million the city still owes on the land, while not requiring subsidies to produce the affordable units. Typically, Casar says, it costs about $20 million in subsidy - between city funds and state-sponsored tax credits - to make 150 units of income-restricted housing viable for a developer. Greystar and HACA have offered to produce nearly twice that many, but going further (or producing other community benefits) would likely require city financial participation.

Capital A Housing, the development subsidiary of Austin’s Civilitude Group engineering firm, is in talks with Greystar to join its team; it was part of one of the unsuccessful proposals, but it’s offered up some of its ideas, such as a 10,000-square-foot health clinic operated by People’s; affordable childcare from RISE Child Development Center; and a full-service grocery store. “The remainder of our project team is yet to be finalized,” a Greystar spokesperson told us. “We will look to add strong partners who advance the mission of creating the best possible redevelopment for the members of St. John.”

City Manager Spencer Cronk has been asked to update Council on the status of the negotiations at least eight weeks before a proposed MDA is presented for approval. Casar and St. Johns neighbors hope that construction can begin next year.