Here's how the City Council voted on purchasing the Salvation Army property and more

It's been a busy few weeks at City Hall. After three back-to-back weeks of meetings in October and early November — including the impassioned 7-hour joint public hearing with the Planning Commission about proposed land development code changes — Austin City Council members returned to the dais for the fourth Thursday in a row.

Some of the big-ticket items voted on Thursday included multi-million-dollar property acquisitions.

Downtown Salvation Army property

The Austin City Council approved the purchase the downtown Salvation Army property for around $15.05 million to continue operations of the homeless shelter on a long-term basis.

"The current plan is for the Salvation Army site to serve women as well as individuals who identify as transgender," David Gray, the interim Homeless Strategy Officer, told the City Council during a work session on Tuesday.

The property includes two buildings and a parking lot — the Salvation Army shelter at 501 E. 8th St., along with a 1,500 square-foot retail building at 718 Red River St. and a nearly half-acre surface parking lot at 700 Red River St. It's also located next to the ARCH (Austin Resource Center for the Homeless) — a city owned men's shelter operated by the California-based nonprofit Urban Alchemy.

The purchase comes after the nonprofit closed the shelter in April. The City Council then approved a lease agreement with the Salvation Army to allow the city to reopen the shelter downtown for one year starting July 1.

Bill Brice, with the Downtown Austin Alliance, asked the Austin City Council on Thursday to delay purchasing the property.

"We know more shelter services and housing are desperately needed," Brice said. "But the community deserves assurance that decisions we make including large investments to purchase, repair and operate this property are without doubt the highest and best use of tax dollars and the social services are designed for the future."

According to the Travis Central Appraisal District, the shelter building alone is valued this year at $12.5 million — up from the nearly $10.7 million it was valued at in 2022. In 2023, the retail building on Red River Street was valued at nearly $470,000 and the parking lot was valued at nearly $1.6 million.

The item passed on Thursday approved up to $15,067,682 for the $15.05 million purchase cost and closing costs.

Ed Van Eenoo, chief financial officer for the city of Austin, told the City Council during a work session on Tuesday that there are three funding sources that have been identified for the purchase — two including the Community Development Block Grant fund and the Housing Trust Fund. Item 6 on Thursday's City Council agenda is an amendment to the 2023-24 Housing Trust Fund budget to increase requirements by $5 million for the purchase.

The third, Van Eenoo said, is funding that could become available if the City Council approves another multi-million-dollar real estate purchase up for vote on Thursday — the Ben White Boulevard facility.

"Assuming Council approves the purchase, the funding that we had put away in the budget for the lease — about $5 million of lease expenses — that savings would go towards the acquisition," Van Eenoo said.

Administrative offices purchase on Ben White Boulevard

The Austin City Council on Thursday approved the purchase a two-story multi-tenant low-rise office situated on a 20.42-acre site on East Ben White Boulevard to use for office and administrative space.

Of the total cost of $75,545,000 for the acquisition, furnishing and equipping of the space located at 5202 E. Ben White Boulevard, around $71.5 million will go towards the acquisition.

The city currently leases about 80% of the space, according to Kimberly Olivares with the city's finance department. The space is used by different departments including the Economic Development Department and Communications and Public Information Office.

According to the recommendation for action on item 15: "The City’s current annual lease payment of $6.4M will more than fully offset the annual debt service cost of $6.1M for the purchase."

During a Tuesday work session, Olivares told the Austin City Council: "The Mexican Consulate also occupies just about 10% of that space and then there's a small amount that is currently unoccupied that we're going to be able to convert and utilize for Homeland Security Emergency Management purposes."

The city plans to honor the existing lease with the Mexican Consulate which goes through 2032, Olivares said.

"The third-party lease revenue of $1M will offset the projected annual operation and maintenance cost of the facility," according to the recommendation for action on item 15.

"We're going to be seeing significant savings right out the door once we acquire this facility," Olivares said.

Another Convention Center Contract

The Austin City Council approved a $30 million contract with Project Control of Texas Inc. for "expert project management and technical services for the redevelopment of the Austin Convention Center," according to the recommendation for action attached to the item.

The City Council previously approved two contracts to move forward the Austin Convention Center redevelopment project — a $65 million joint venture contract with the architecture firms LMN and Page for design and engineering and a $1.2 billion joint venture contract with JE Dunn and Turner for construction services beginning in 2025.

Demolition is expected to begin in 2025, and the new facility is set to open 2029, according to the city.

The expansion project is estimated to nearly double the current square footage of the Convention Center and is funded through hotel occupancy taxes and revenue from the Convention Center.

Ella McCarthy covers Austin city government for the American-Statesman. This story was updated following action form the Austin City Council. To share additional tips or insights with McCarthy, email [email protected].

This article originally appeared on Austin American-Statesman: Austin City Council to vote on two multi-million-dollar real estate purchases