Capital Metro approves Plaza Saltillo contract

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Plaza SaltilloEndeavor Real Estate Group will begin construction at Plaza Saltillo as early as 2017 and transform the area into a mixed-use, transit-oriented development over a 2.5-year period.Rendering courtesy Endeavor Real Estate Group

After what its president called a “two-year-long” journey, the Capital Metro board of directors on March 21 approved a master development agreement with Endeavor Real Estate Group to redevelop Plaza Saltillo into a mixed-use and mass transit hub.

Capital Metro began negotiations with Endeavor in June 2014 to overhaul the 10-acre district, which is situated adjacent to a MetroRail station. The board voted 7-0 to approve the measure.

“This transit-oriented development in the heart of East Austin will provide important revenue and ridership to our overall operations while meeting important social goals for the surrounding community,” Capital Metro President and CEO Linda Watson said in a statement. “I want to thank everyone from Capital Metro, the development team and especially the community who so passionately and thoughtfully gave their time and expertise to get us to this moment when we can begin transferring ideas and sketches from paper onto the site itself.”

The master development agreement calls for the construction of about 800 apartments, of which 15 percent will be affordable to those who earn 50 percent of Austin’s area median family income. Units will also be set aside to house seniors age 55 and older.

The Plaza Saltillo District will also incorporate 110,000 square feet of retail space, 120,000 square feet of office space and a 2-acre-plus public and private open space. About 1,700 people will live and work in the district.

Expanding mobility options in the community include MetroRail and MetroBus service, which should not be disrupted during construction, according to the release.

The Lance Armstrong Bikeway will be extended from I-35 at Fourth Street to Plaza Saltillo, the B-Cycle Bike Share Program will be expanded, parking spaces will be reserved for Car2Go, parking will be available in below- and above-ground facilities, and San Marcos Street will be extended through the project.

Pending final design approval from the city of Austin, Endeavor expects to begin construction in early 2017 and will take more than two years to develop the area.

Living wage

Workers Defense Project

After initially bringing forward a proposal to pay workers $11 an hour in 2013, Endeavor agreed to increase the hourly wage to $11.39 after City Council increased the living wage to $13 on Oct. 1. Capital Metro and Endeavor agreed to amend the agreement March 21 to increase the wage to $13.03.

Although the total cost implication of increasing pay to the living wage standard will not be available until the bidding process begins for hiring subcontractors, Capital Metro spokesperson Amy Peck said it will not be less than $1.05 million. She said Capital Metro and Endeavor would split any increased cost because of the wage increase. Capital Metro would pay for any increase through lost rent revenue over a 99-year term for the property, she said.

“We expect rent revenue, but it will be reduced by that amount of money, which was 50 percent of the total increased cost,” Peck said. “If any costs are incurred on top of that, Endeavor will pay that in addition to 50 percent.”

Independent monitor

In addition to lobbying for a living wage, the Workers Defense Project, a local organization that advocates for low-income workers, advocated for safety and work environment standards, such as workers compensation insurance; safety training; and independent, on-site monitoring.

“A truly independent monitoring entity is the only thing that can actually hold Endeavor … accountable for construction standards on their site,” said Bo Delp, Better Builder Director for the WDP.

Another amendment to the March 21 agreement provides Capital Metro with a role in selecting and conducting oversight of a third-party independent monitor. Capital Metro will have veto power over the selection of the monitor, board member and Council Member Ann Kitchen said.

Capital Metro attorney Rick Reed said Capital Metro will be able to communicate with the monitor independently. If a dispute arises between Capital Metro and Endeavor over the performance of the monitor, a mediation process was built into the documents agreed upon, Reed said.

City Council Member and board member Delia Garza said that although she was pleased Capital Metro finalized an agreement that provides workers with the city of Austin-established living wage—$13.03 an hour.

“Thank you for the $13 living wage,” City Council Member Delia Garza said. “It’s not everything I had hoped for, but I’m glad with where we ended up.”