UT land attracts eager bidders
Developers hoping to win lease for site near the Arboretum
By Shonda Novak
Thursday, June 26, 2003
A who's who of developers has submitted bids for a prized slice of land in North Austin that is owned by the University of Texas. The bidders include the world's largest mall developer and local retail heavyweights.
UT is looking for a developer to lease the 45.8-acre tract at the southeast corner of MoPac Boulevard (Loop 1) and Braker Lane for up to 50 years. The university released the names in response to a request from the Austin American-Statesman. They are:
* Cypress Equities Inc., the acquisition/development arm of Dallas-based Staubach Retail Services.
* Austin-based Endeavor Real Estate Group, which teamed with The Gottesman Co., a local commercial real estate development company.
* Gateway Properties, which owns the Gateway Shopping Center near the UT site.
* Schlosser Development Co., which is developing a retail project at Sixth Street and Lamar Boulevard downtown.
* Simon Property Group Inc., an Indianapolis-based mall developer that owns three regional malls in Central Texas and plans to develop three more.
* Stratus Properties Inc., an Austin-based development company.
The UT System Real Estate Office issued a call for proposals on May 1.
The land is one of the last parcels available in an area developers call the Golden Triangle because it's near the Arboretum shopping area and major highways such as U.S. 183, MoPac and Loop 360 (Capital of Texas Highway). More than 100,000 cars a day travel past the property on MoPac.
"It's a remarkable piece of property," said Beau Armstrong, president and chief executive of Stratus. "If it weren't for the university having this land, it more than likely would have been developed years ago."
The proposals are sealed, so details about the developers' plans for the site and their bids were not released. Several declined to comment.
However, Armstrong said he thinks the land could generate "well in excess" of $100 million for the university during the 50 years.
"Being a big UT fan, I'd like to see the university get a lot of money for their land," Armstrong said. "Hopefully the university will make a bunch of money on this."
He said he thinks most bidders envision a mixed-use develop- ment.
"I would be surprised if everyone didn't generally have the same plan," he said. He said Stratus proposes retail, housing, office "and perhaps a hospitality or hotel component."
Armstrong said he thinks it would be 2005 before any construction could start and 2006 or later "before you see any occupied structures out there."
The site could handle a project with 500,000 square feet to 1 million square feet, real estate experts say.
UT leases part of the land to a golf driving range but has an option to terminate that lease, which expires next year, if the land is redeveloped.
The UT System Board of Regents will be briefed July 7. A decision is expected no later than July 9, although it could take months to finalize a lease.