AUSTIN, Texas — As TxDOT's work to expand Interstate 35 through Central Austin is already underway, several entities are planning to build land plazas over the highway.
On Wednesday, the University of Texas System Board of Regents approved $106 million for a project near campus. It involves building a series of caps over the highway between 15th Street and Dean Keeton Street to connect the campus with the other side of the interstate. UT System Board of Regents Chairman Kevin Eltife said it is 10 to 12 acres in front of the new medical complex.
"We believe this is so important because even though they won't be constructed for eight to 10 years," Eltife said, "real estate in front of the medical complex will be desperately needed in the future."
Construction on an MD Anderson Cancer Center and UT Austin Hospital at the UT Media Center is set to start in 2026.
"This gives us the opportunity to cap that area to monetize it in terms of creating revenue from future buildings and medical facilities," Eltife said.
TxDOT broke ground on the $4.5 billion I-35 Capital Express Central project in late October. Planned updates include the construction of two carpool lanes between U.S. 290 and State Highway 71, lowering the main lanes from Airport Boulevard to Lady Bird Lake to remove the interstate's upper decks, making room for the cap-and-stitch initiative that will add plazas above the interstate.
The U-T project is separate from the city project, which could create up to 30 acres of new public space in Central Austin between Holly Street and Airport Boulevard. TxDOT will build the foundation of the decks as it expands I-35, while the city will build what's on top.
In design renderings of what the caps could look like, the cap between Fourth and Seventh streets could see an elevated walkway and outdoor dining space. Another design shows a cap between Cesar Chavez and Fourth streets, and the plan includes a "street promenade" and bike path.
Brianna Frey, who is managing the project for the city, said it will bring new parks, shops and entertainment to Central Austin.
"I think the public is interested in seeing some of those benefits too as it relates to either their business districts or their neighborhoods or where they like to go hang out with their families, or potentially in the future could see themselves hanging out with their families," Frey said.
Austin City Council's plans
Thursday's city council meeting was supposed to be the deadline for council members to decide whether to spend hundreds of millions on the project. The agenda initially contained two items, one for $19 million in design funding and a second item for $265 million in funding for the roadway elements for the caps.
However, in a memo on Dec. 5, City Manager T.C. Broadnax withdrew the items because TxDOT extended the deadline. The memo cited delays in TxDOT's pump station contract award. The deadline has been extended to March 2025, and city staff intend to bring it up at a different city council meeting this spring.
While they won't vote on those big ticket items on Thursday, the city council will vote on a $41 million state infrastructure bank loan, which Frey said will help cover TxDOT design fees. Those fees could range from $8 million to $19 million, depending on which caps move forward into design. Part of it will also go to the Neighborhood Access and Equity Grant, which the city has to match.
They will also formally accept $105 million from the federal government for the section between Cedar Chavez and Fourth streets. That funding will require a $45 million match from the city. So far, that is the only cap to get funding and is the only cap scheduled for construction. Other caps can be added if the city secures financing.
The price tag for the full build of the project has ballooned to nearly $1.4 million. It has increased by 50% to 80% due to building material costs and adjustments as crews have advanced the design and further fleshed out the elements.
"A lot of that has to do with the fact that some of these caps are going to create a tunnel-like system that needs to be supported by more voltage in electricity. There will need to be a lot more fire, life and safety components that just weren't in the design at the schematic level," Frey said. "These are new added elements that they've priced out for us that we previously hadn't received yet."
With the cost estimates like they are, the city is evaluating plans to move forward with only some of the caps.
The proposed eight caps are:
- Holly Street – 0.96 acres
- Cesar Chavez Street – 0.27 acres
- Cesar Chavez to Fourth streets – 5.37 acres
- Fourth to Seventh streets cap – 3.28 acres
- 11th to 12th streets cap – 2.17 acres
- 38 1/2 to 41st streets cap – 5.20 acres
- 41st Street to Red Line cap – 4.76 acres
- Red Line to Airport Boulevard cap – 4.24 acres
Scenarios under consideration
The city is considering several scenarios with different cost options for the amenity decks over the interstate.
"The scenarios are endless, but some of the community engagement and cost estimates that we've received, we really narrowed it down to six scenarios," Frey said. "Council could take the scenarios that we propose and run with it once they understand some of the cost implications to the larger look at the city debt as well as the communications they've been having with community members."
As the city considers various funding sources, Fry said everything is on the table. For 2025 funding commitments, they are going to have to turn to a certificate of obligations or other public funding sources. They have not ruled out an election to ask the public to support a cap-and-stitch bond program.
"That is something that council members are still really exploring because there are some tradeoffs with increasing one program, funding sources from those debt capacities, and taking from other funding sources," Frey said. "It is a matter of determining what the city's priority is spending these large dollars on."
In the Dec. 5 memo, city leaders discuss the possibility of an assumed $600 million bond in 2026. According to the memo, a $600 million bond program in 2026 is expected to cost the typical homeowner $82.71 annually in today's dollars.
The projected bond issuances over time for the Cap and Stitch Scenario 6 are estimated to be around $1 billion, and the city estimates the cost for the typical homeowner to be $137.86 annually.
Since the bonds would be issued over a 10- to 15-year period, the projected monetary impact on taxpayers will be felt over an extended period and not all at once.
While city staff said they do project an overall weakening of the city's financial rating metrics over the next 10 years, they believe the overall credit profile will remain favorable.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.