Central Texas Market Report

Population growth keeps area building

By Christine Cox

Central Texas’ commercial building business seems to be undaunted by the current economic downturn. The market has not only been unaffected, it’s booming with retail, restaurant, residential, medical and military projects.

A rendering of the Emergency Services Education Center in Waco.

And the boom should continue in the months ahead, with multimillion-dollar projects being slated for completion from now through the beginning of 2010.

The swell is being attributed to population growth in all of Central Texas.

Just south of Austin, the newest Seton project, in Hays County, expects to open its doors in November. Herb Dyer, vice president and project executive for the $143 million project, says the first phase of the planned Seton Medical Center Hays, about 20 mi. south of Austin in Kyle, is 20% larger than its nearby Williamson County counterpart. Lott Bros. Construction Co. of Austin of was selected as the general contractor.

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“The first phase will be relatively small, but if the population growth of Hays County continues as we expect it to, it should double by the year 2020,” Dyer says. The hospital could grow to a 300-bed, $385 million project, he adds

There are also retail, hotel, conference and residential projects slated to begin in the months ahead to support the new medical facility, Dyer says. Kyle is the fifth-fastest-growing city in Texas, according to the U.S. Census Bureau.

K. Paul Holt, president and CEO of the Central Texas Branch of the Associated General Contractors of America, says that the Waco area, about 100 mi north of Austin, is on an economic upswing. “We’re even redeveloping our downtown area,” he says. “The $17.5 million Waco Convention Center renovation is one of the city’s bond projects that will benefit downtown.”

Holt says the new Hillcrest Baptist Medical Center is a cornerstone of the new Legends Crossing development at IH-35 and Highway 6, being built by Birmingham, Ala.-based Robins & Morton. The facility includes a Women & Children’s Hospital and a community hospital. Holt cites other developments coming down the pike including an 89,000-sq-ft medical office building, two hotels and several retail and eating establishments.

A rendering of the second phase of The Domain in Austin

McLennan Community College in Waco passed a $73 million bond package that allowed for three LEED certifiable buildings, currently under construction. The Science Building and the Michaelis Academic Center will be gold LEED, and the new, 35,000-sq-ft Emergency Services Education Center and its general contractor, John W. Erwin General Contractor Inc. of Waco are working toward a platinum certification.

The complex will house the fire and police academies, as well as a training facility for emergency medicine, and when its second phase is completed, the center will vie as one of the top emergency training facilities in the country.

The first phase of construction includes an instructional and training facility and a six-story burn tower. Phase two plans include training areas for water-rescue, a plane and fire simulator, burn village, driving course, helipad and extrication area. Phase one is slated for completion in the summer.

In San Antonio a $2 billion Base Realignment and Closure contract is under way. It includes a renovation of Brooke Army Medical Center and new construction of a 650,000-sq-ft addition. Also in progress is the construction of a 10,000-sq-ft central energy plant.

The BRAC program includes a new Battlefield Heath and Trauma Center, a level-one trauma facility and burn center. It is a $92 million dollar project being built by Houston-based Gilbane Building Co.

In North Austin, the Domain is undergoing phase two construction in a three-phase project, slated for completion in November 2009. The Domain features Austin’s first Neiman Marcus, an array of renowned retailers and restaurants, office space and apartments.

“Domain II will add another 600,000 sq ft of space and include a three-level Dillard’s, Village Road Show theater and a Dick’s Sporting Goods store,” says Kathleen Shields, senior vice-president of development at Simon. “A four-star, full-service Westin Hotel will also break ground this summer, adding 340 guest rooms, conference facilities and a ballroom to this mixed-use project.

Plans also call for 75,000 sq ft of Class A office space and another 411 residential units. “The demand for the residential units has been overwhelming,” Shields says.

The Beck Group of Dallas is leading the project.

At the University of Texas at Austin, the new Experimental Science Building will consist of 320,000 sq ft of new construction and demolition of the entire existing building. The teaching facility will include technology-enabled classrooms and undergraduate teaching laboratories in neuroscience, computational biology, environmental science, pharmacy, molecular and cellular biology.

A rendering of the Hillcrest Baptist Medical Center in Waco.

The existing building occupies a prominent place on campus, just north of UT’s 40 acres. The Beck Group project is seeking LEED silver certification for the $116 million project, scheduled for completion in late fall 2010.

There are several projects still in planning stages surrounding the MetroRail System from downtown Austin to Leander, about 30 mi. north of the capital city. Crestview Station, Lakeline Station and Gateway at Leander are multimillion-dollar, transit-oriented developments that are being held up in the land planning stages due to environmental and road access issues.

The developments will include office and retail space as well as single and multifamily mixed-use space.

In the Austin area alone, there are more than 50 condominium and mixed-use projects under way or in the planning stages. Some experts are predicting overbuilding of the multifamily market in the Austin area. One such report was published by Texas A&M economist Mark Doutzer in August.

In the meantime, the Texas Clean Energy Park is making progress in its planning stages, with Trammell Crow Co. of Dallas leading the project’s construction., says Jose Becerio, of Austin Clean Energy Initiatives.

An aerial of the construction at Seton Medical Center Hays, about 20 mi. south of Austin in Kyle.

Trammell Crow purchased the land from the state several years ago and is collaborating with the city of Austin, the Chamber of Commerce and the state. Early this year, the Clean Technology and Sustainable Industries Organization, a nonprofit trade organization committed to commercializing and globalizing clean technologies, designated Austin as the organization’s global headquarters.

The 140-acre East Austin tract is scheduled for grading early next year.

“We are looking to become a hub for clean energy businesses by developing a place where we can share talent and infrastructure with all different renewable initiatives, including solar power leaders,” Becerio says. “Our goal is to help facilitate the work of startup companies, to provide workforce training and, someday, to build a research lab unrivaled in other cities.”

Beceiro says the Texas Clean Energy Park will have two phases, and another 100-acre plot will be developed in the coming years. The park, which will have a LEED-certified campus, hopes to be considered an “anchor for clean energy in Central Texas,” he adds.

The project should be ready to open its first doors within 12 to 18 months.