Mall developer Simon will pay $130 million to lease UT land
Shopping center featuring high-end retailers and restaurants planned for North Austin site
By Shonda Novak
Thursday, November 6, 2003
Simon Property Group will pay the University of Texas $130 million over 52 years to lease almost 46 acres the university owns in North Austin, pending expected approval next week by the UT Board of Regents.
Simon was the highest bidder for the land, which is adjacent to the university's J.J. Pickle Research Campus. The land has frontage along North MoPac Boulevard and is next to land where Endeavor Real Estate Group plans a major retail and residential complex.
Kevin Hegarty, vice president and chief financial officer at UT-Austin, said Simon's bid was "substantially more" than that of the five other bidders. "It was very apparent that Simon wanted this property. They bid very aggressively," he said.
Other proposals ranged from big-box retail to auto malls, Hegarty said.
Simon would make the first payment in May and plans to break ground as soon as possible on the project, which would include 550,000 square feet of open-air retail space with high-end shops and restaurants, Hegarty said. It would take about two years to build the project, which would open in 2006 or 2007.
Under the lease terms, Simon will pay a $1 million lease-termination fee to a golf driving range now occupying part of the land, plus $75,000. It will pay $1.4 million to lease the land in the first year, an amount that rises gradually to $3.9 million in the final year.
Because the land is being used for commercial purposes, Simon will pay property taxes on it.
UT put the land up for bid earlier this year, seeking to make more money from its holdings.