AUSTIN, Texas — One of the final downtown properties owned by the city of Austin could undergo repurposing in the future.
At a work session on Feb. 27, Austin City Council members discussed four new possibilities for the former HealthSouth building, located at 1215 Red River St. and 606 E. 12th St.
Last year, the city planned to turn the vacant building into an affordable housing space, but increased costs and new competition have caused the plan to change.
During Tuesday's meeting, suggestions to upgrade the space included multiple potential new scenarios like a hybrid site, a downtown density bonus site, a Rainey District density bonus site and a pilot site.
The first option would offer 445 total affordable units while the second would offer 1,589 units. The third would offer 1,331 units and the fourth would provide 1,719 units. Some of these units would be on-site while others would be off-site.
Some council members also proposed starting an entirely new project somewhere else in the city with funding and tax revenue from the current location.
The city believes a decision will be made sometime in the summer or fall.
The history of the HealthSouth building
From 1995 to 2016, HealthSouth owned a parking garage near the Rehab Hospital Services Corporation on East Twelfth Street. In 2017, the property was sold to the city.
Most recently, a deal with developers was created in 2022 to turn the building into two towers. But in June 2023, the plan was put on pause.
In a memo from Assistant City Manager Veronica Briseño to Mayor Kirk Watson and city council members at the time of the pause, Briseño pointed to concerns from Aspen Heights over market conditions as one of the reasons for terminating the deal.
The other issues stemmed from the developer wanting to convert only 7% of the buildings into affordable housing instead of the 25% that was originally agreed upon.
This year, the conversation continues in finding a new purpose for the old building.