Solution File: Retrofitting Arterial Strip Centers in Austin, Texas

This article appeared in the Spring issue of Urban Land on page 154.

There are thousands of retail strip centers, built along arterial streets in the 1950s through the 1970s, like the 8.5-acre (3.4 ha) former Lamar Plaza on South Lamar Boulevard, two miles (3 km) south of the heart of downtown Austin. Its original 1958 Handy Andy supermarket (later a Piggly Wiggly market) had already been turned into a six-screen Alamo Drafthouse cinema and restaurant in 2005. The former Beall’s Department Store had been converted into a Highball nightclub. But the other buildings on the underdeveloped site, including retail and restaurant space and a small apartment building, were outdated. Its total on-site development constituted only a low suburban floor/area ratio (FAR) of 0.27 to 1, so that an increase to a still-low 2.7 FAR, even including suburban parking ratios, could support enough development to create urban values.

Retrofit Development Program

The Austin office of Greystar Real Estate Partners, the largest American apartment manager, based in Charleston, South Carolina, retained planners and architects in the Austin office of BOKA Powell to evaluate a potential purchase of the site. BOKA Powell’s Austin principal, Eric Van Hyfte, a veteran of many mixed-use urban projects, knew that Austin had eliminated FAR limits and setback requirements along core transit corridors to encourage vertical mixed-use development. Derek Brown, Greystar’s managing director, and Van Hyfte envisioned a 1 million-square-foot (93,000 sq m) mixed-use community that would build on the daily activity generated by the six-screen cinema, expand it to nine screens, concentrate more than 86,000 square feet (8,000 sq m) of streetfront retail along a new entry street, and top that grade-level development with 442 new units of housing in three buildings. The plan called for underground parking for 1,349 cars.

Van Hyfte notes that Austin ranks third in the nation for growth of the millennial population and that these apartments were designed to attract them. “With approximately 110 people moving to Austin each day, the growth pressures on the city are immense,” he says. Van Hyfte also notes that the Walk Score for the site is 85, which means that most errands can be accomplished on foot; that its Transit Score is 51, because tandem buses stop every ten minutes at the southeast corner of the site; and that its Bike Score is 91, classified as a biker’s paradise, just a nine-minute ride using bike lanes to downtown.

Context

The larger context was favorable for development. Lamar Boulevard is a transit corridor that cuts through a gridded system of blocks measuring approximately 300 by 425 feet (91 by 130 m). North and west of the site were five blocks of modest single-family detached houses along tree-lined streets. But the area around the site was a transitional one. Along the boulevard were other small strip centers, taverns, restaurants, gas stations, car washes, self-storage units, and some older two-story garden apartments. Several sites were being infilled with newer four- and five-story flats. Increased urban density along the boulevard could fit into the larger grid, but the retrofit would need to have its own internal consistency to attract tenants.

To allow future integration into the urban street grid, the city required that the team break the 525-by-700-foot (160 by 213 m) site into blocks. That fit well with the team’s decision to orient the site along a central entry street with an urban character. That street would be lined with shops and cafés between Block One (south) and Block Two (north), which are 400 by 250 and 230 feet (122 by 70 and 76 m), respectively. Block Three runs the full 525-foot (160 m) western length of the site and is 270 feet (82 m) wide. While planners would have continued the entry street, which is aligned with Dexter Street to the west, neighborhood concerns about traffic and on-street parking dictated that the new roadways would not connect directly west to Dexter and Margaret streets. That configuration also permitted retention of the expanded cinema in a way to visually terminate the new entry axis.

Topography

The dramatic 22-foot (7 m) slope of the site, from its high southwest corner to its low northeast corner at the intersection of the boulevard with Treadwell Street, posed both a problem and an opportunity. To keep the cinema and the new retail space at the same grade level, the new entry street would need to enter at the center of the slope. Dividing Block One and Block Two in the site’s center accomplished that. And since Treadwell provided access at the low side, a full floor plate of underground parking for more than 500 cars under Block One and Block Two and the entry street could be built efficiently with minimal ramps.

Parking

The most difficult planning problem for infilling transitional sites is dealing with parking. Such sites are close enough to downtown to be redevelopable with urban intensity but far enough from most services to make car ownership desirable. Even in fast-growing cities such as Austin, with a current population of just under 1 million in a metro area of 2.1 million, lower-density development patterns disperse services, encouraging driving.

Moreover, the cinema, nightclub, and restaurants drew from a much wider area and created high parking demand at night, which would compete with parking demand from residents of the new apartments.

Since parking demand was competitive at night, residential parking is gated at access points just off Treadwell on the north side street between Block Two and Block Three. Parking for all other uses is shared and free in above-grade structured parking in each building. The west garage has 686 spaces on six levels and is wrapped with units in Building Three so that the garages are not seen. Cinema, restaurant, and retail patrons share 576 spaces while 110 are reserved for residential units. The east garage has 663 spaces, of which 517 are reserved for residential units; retail and restaurant patrons share 146. The structured parking in Building One and Building Two is wrapped with retail and restaurant space to shield the parking from public view.

Both parking structures underwent significant redesign after initial pricing. The eastern garage changed from a flat-plate, post-tensioned concrete structure with 30-foot (9 m) spans to a post-tensioned beam-and-slab structure with 60-foot (18 m) spans, which increased parking efficiency and allowed the contractor to reduce costs by using standardized steel pans for formwork and decreasing the total volume of concrete. The western garage was originally designed as a precast concrete structure but was changed to cast-in-place, post-tensioned concrete. This reduced the floor-to-floor height from 10.6 to 9 feet (3.2 to 2.7 m), allowing an additional floor to be added under the height limits. The additional floor of parking, along with improved efficiency of the eastern garage, allowed for the elimination of an expensive second level of below-grade parking in the east garage.

Height Restrictions

Providing parking in those quantities enabled site density to be as high as it is. The other major limitation was that regulations meant to protect single-family neighborhoods imposed height limits. “As-of-right height limits permitted structures 60 feet [18 m] high,” says Van Hyfte, “but we could only build that on a third of the site; the rest was clipped by single-family height restrictions.” So, counterintuitively, Building One, on the highest portion of the site, reaches five levels; Building Two is split into four, three, and two levels as it steps down the slope; and Building Three rises two and three levels. Moreover, Building Two and Building Three have units accessible at grade with recessed outdoor patios enclosed by low concrete garden walls that transition gracefully across from the single-family houses.

Units

The 442 new residential units are the largest land use on the site—and the principal economic driver. Since total density was principally governed by the height limitations, and since the tallest buildings could be erected on Block One, the team placed 263 housing units, 60 percent of the total, there. The block is ringed with double-loaded corridors of units around two landscaped courtyards above one level of structured parking. The eastern one is a more active courtyard, offering lawn games, barbecue grills, communal dining tables, and a clubroom with views to downtown. The western one is a larger, more passive courtyard with a lawn area, reflecting pool, and yoga studio.

Block Two contains the best views north to downtown Austin. The team decided to build the 97 units there around a half-acre (0.2 ha), three-sided courtyard deck with its 250-foot-long (76 m) side overlooking downtown. The three buildings share a swimming pool that is 84 feet long by 22 feet wide (26 by 7 m). A steel-framed sun-shade trellis covers a community garden with street furniture, a fire pit, and a barbecue bordered by raised planters. A clubhouse and a fitness center anchor the eastern end of the courtyard terrace. Building One and Building Two are both built using wood-framed construction over a concrete podium.

While average unit size is 783 square feet (239 sq m), Lamar Union has a wide variety of sizes, locations, and character for the units ranging in size from 391-square-foot (119 sq m) studios to 1,591-square-foot (485 sq m) two-story townhouses containing two bedrooms and two-and-a-half bathrooms. The unit mix consists of 68 percent one-bedroom units, 20 percent two-bedroom units, 12 percent studios, and 3 percent two-story townhouses. Ten percent of the total units meet city of Austin requirements for affordability at 80 percent of median family income. In December 2017, about 57 units were available to rent from $1,421 to $2,679 per month.

The northern edges of Block Two and Block Three are lined with 11 two-story townhouses and eight one-story flats accessible directly through private patios along Treadwell Street. Block Three’s six-story parking garage, cinema, and the entrance driveway to cinema and retail parking are wrapped with 82 residential units accessible from a single-loaded corridor except for six one-story flats with private patios giving direct access to the green space at the west side of the project facing the single-family neighborhood. Building Three is built with wood-framed construction directly on a concrete foundation at grade. Only the ground floor of the southern edge of the site along the fire lane is not wrapped with units. The wrapped units conceal support functions and create an urban edge around the project.

Cinema/Nightclub Anchor

The location of the cinema at the rear, southwestern corner was fortuitous for both physical and functional reasons. The large number of visitors attracted to the cinema could be drawn through the site past the other restaurants and shops, filling the traditional role of anchor tenant. And since the cinema accounts for nearly half of the retail space, and is leased to an Austin-based company that has 28 locations across 11 states, the lease to a credit tenant reduces the risk of having other small retailers and restaurateurs that are more susceptible to local turnover.

Physically, the cinema has windowless walls that decrease street-side activity. So, its rear corner location, and the ability to wrap its walls with residential units minimize its large presence. Furthermore, the ability to reuse an existing building reduced capital cost.

Before redevelopment, the cinema occupied 25,000 square feet (2,300 sq m). It added 14,000 square feet (1,300 sq m) to house three more screens, a lobby, and a new Highball bar that provides private karaoke rooms and a stage for live performances. The cinema complex offers 889 seats, supported by 430 leased parking spaces in the six-level garage, one parking space for every two seats, or 11 per 1,000 square feet (93 sq m). Because the Drafthouse provides its own food and bar, customers are not likely to patronize the other restaurants and cafés within Lamar Union, which is perhaps one reason there has been turnover at such establishments.

One of the most difficult things about retrofitting existing strip centers is creating a central urban space to tie together disparate uses and elements. BOKA Powell did that by creating an urban street to slow vehicular traffic and concentrate pedestrian activity. That street is only a two-lane, one-way entry street that splits into the north–south street through the site. It also has a parking lane. To function as a woonerf shared vehicular/pedestrian street, there are no curbs and gutters. Bollards and interspersed board-formed concrete planters filled with street trees, grasses, and shrubbery divide the roadway in portions from wide sidewalks with outdoor tables and chairs onto which the cafés and restaurants spill. The entry street visually terminates in a 50-by-80-foot (15 by 24 m) outdoor plaza created on three sides by a recessed entry to the drafthouse cinema. Two floors of one-story flats with projecting balconies rise above the addition to the cinema and nightclub. Two large two-story restaurants are recessed into opposite corners of Building One and Building Two. Tall overhangs project over the widened sidewalks where café tables continue around the corner.

While visually prominent, the larger function of the retail entry street is to create a center for an urban lifestyle for apartment residents. When it was completed in early 2016, Lamar Union had five restaurants, a café, a juice bar, an ice cream shop, a neighborhood market/deli, a salon, a barbershop, an optician, clothing shops, and a fitness/yoga studio in 47,000 square feet (4,400 sq m) of new retail tenants, divided into 18 shops and restaurants. But, by summer 2017, the restaurants at three of the corners and the delicatessen/market had closed. The local press speculated that customers of the eat-in cinema did not patronize the other restaurants; that the transitioning arterial location had not yet developed enough pedestrian traffic; and that garage parking in such locations was unfamiliar. However, new sushi and seafood restaurants re-leased prominent locations along the entry street.

Tenancies are likely to evolve as patronage patterns change as the boulevard transitions to a more urban character, adding critical retail mass.

Stormwater

Retrofitting arterial sites also requires new solutions to stormwater management driven by cities’ stringent stormwater standards. This original site was a large field of surface parking, 97 percent of which was impervious at the time of acquisition. With no space for a retention pond on the packed site, the team used a combination of rain gardens in various locations on the surface and collected all other water into two structural underground detention/sedimentation water quality systems below the garage with 12,000- and 18,800-cubic-foot (340 and 532 cu m) capacities that store and filter rainwater before it leaves the site.

Value

Retrofitting arterial retail centers offers developers large blocks of land on which to build complex mixes of uses that can increase development value that should appreciate as their arterials transition to more urban uses. Cities also benefit as their tax bases increase. Before retrofitting, the 2013 assessed value of Lamar Plaza was $18.16 million ($590,000 in improvements plus $17.57 million in land). Following completion of Lamar Union, the 2017 assessed value had risen to $149.82 million ($118.19 million in improvements plus $31.63 million in land), according to the Travis Central Appraisal District. In summer 2017, TA Realty, a private investment firm in Boston, bought Lamar Union from Greystar Real Estate Partners at an undisclosed price.

The thousands of underdeveloped older retail strip centers that line urban arterials represent an urban land bank of enormous proportions. Typically, they are owned by a single entity, are served by existing infrastructure, and are already zoned for commercial use, often with overlays that encourage mixed-use development that supports transit corridors. Projects like Lamar Union are prototypes of how developers can balance challenges and opportunities to profit both their cities and themselves.