Simon wins UT property lease
July 7, 2003
Austin Business Journal
The University of Texas will lease 46 acres of prime Northwest Austin real estate to Simon Property Group Inc. for a retail development, UT announced Monday.
UT will negotiate a 50-year ground lease for the property near the J.J. Pickle Research Campus on the eastern frontage road of North MoPac Expressway between U.S. Highway 183 and Braker Lane.
Simon Property Group was selected from a field of six proposals to develop the site, according to UT.
An open-air, mixed-use project is planned for the site, which will include 200,000 square feet of anchor stores and 300,000 square feet of specialty shops, boutiques and restaurants, according to UT.
Indianapolis-based retail developer Simon Property Group, the nation's largest developer and manager of retail real estate, controls the Austin area's three shopping malls and The Arboretum retail center.
Kevin Hegarty, chief financial officer for UT, says the lease will be an alternate source of funding for the university until the land is needed in the future.
Once approvals are received, construction can begin in early 2005 and be completed in fall 2006.
The board of regents must approve a final lease before it becomes effective.
Any retail space that goes up on the UT land is expected to compete for tenants with a section of an project across Braker Lane to the north under development by Austin-based Endeavor Real Estate Group LLC.
Endeavor is developing The Domain, a 235-acre mixed-use project northwest of Braker Lane and Burnet Road.
Endeavor is working on plans to develop 600,000 to 700,000 square feet of retail and anywhere from 350 to 650 residential units atop the retail buildings in a 50-acre section of The Domain on the MoPac side. Endeavor expects to break ground in mid-2004 on the mixed-use portion of The Domain, with construction to be finished 14 months later.
Endeavor representatives weren't available to comment on the effect the UT lease with Simon Property Group may have on The Domain.
Endeavor Real Estate Group and Austin-based The Gottesman Co. submitted a joint proposal.
Three Austin real estate developers, Gateway Properties Inc., Stratus Properties Inc. [Nasdaq: STRS] and Schlosser Development Corp. submitted bids. The final bid came from Cypress Equities, the development and acquisition arm of Dallas-based The Staubach Co.
© 2003 American City Business Journals Inc.