The Texas Facilities Commission last week unanimously endorsed a development concept for downtown Austin that would combine new state office buildings with private developments on state-owned land near the capitol.

Texas would finance its portion of the public-private partnership with savings realized by moving from leased space in Austin and its suburbs into as many as three state-owned office buildings.

The state currently leases three million square feet of space in Travis County at an annual cost of $42.6 million. Aundre Dukes, who manages the state’s real estate, said Texas has paid $500 million of rent for office space in the county over the past 20 years.

Dukes told the commissioners that 70% of the current leases in the Austin area will expire within the next six years, and he expects the new contracts would be more expensive. The state’s leasing costs in Travis County have gone up 250% since the last office building in the downtown complex was completed in 2000, he said.

According to the Facilities Commission’s plan, the private-public partnership effort would allow Texas to consolidate operations in new buildings without direct legislative appropriations or issuing bonds.

The proposal approved by the commission would move state offices now located outside the capitol complex to two or three new buildings. The state could partner with developers on office buildings.

Private developers would be allowed to erect commercial and residential buildings within the state capitol complex under long-term ground leases.

A study by the Facilities Commission staff found that 21 acres of the 122-acre state-owned complex between the capitol and the University of Texas main campus is used for visitor and employee parking.

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