‘Embarrassing’ state office building in downtown could be up for sale

Austin

AUSTIN (KXAN) — Tens of millions of dollars in state money goes toward maintaining just one building, prompting some lawmakers to want to pass a bill that would allow the state to sell the William P. Hobby building in downtown Austin.

Walking into the lobby, you can see chipped paint, damage on the ceiling and various repairs in progress. 

On more than one occasion, Sen. Kirk Watson has called the property “embarrassing.” 

In a January Senate Finance Committee meeting, he said, “I mean it’s an embarrassment. It’s a joke. In any other universe, it wouldn’t exist.”

During that gathering, the Texas Facilities Commission’s Executive Director told Watson, “There’s a lot of issues with the building.”

Then, in an April Senate Committee on Business and Commerce meeting, Watson said again the Hobby building is an embarrassment. 

The state’s property is home to 19 different agencies, according to the TFC. It was built in the mid-1980’s and the state took ownership in 1990. 

They said they spend about $1 million every year to maintain the building. Since 2014, they’ve spent about $19 million for various repairs and upgrades, and they said fixing all of the building’s known deficiencies would cost $50 million. 

“Yet it sits on a piece of property that is of great value for the state— if the state were to use it in a smarter way,” said Watson. 

If the State Legislature authorized the sale of the Hobby building, “It is now, and it will continue to be very interesting for private sector development,” said Charles Heimsath, President of Capitol Market Research.

“The office market downtown has been extremely strong for a number of years. We have what many cities envy and want or aspire to. It’s what’s called an 18 hour city. A live work play environment,” Heimsath said.

Hobby Tower Characteristics
  • Hobby Tower #1 has 13 floors and 165,125 sq. ft. of usable space
  • Hobby Tower #2 has five floors and 33,842 sq. ft. of usable space
  • Hobby Tower #3 has nine floors and 113,643 sq. ft. of usable space
  • Underground parking for employees with about 380 spaces
  • The buildings sit on 1.7488 acres  

He said right now, downtown has about 30 million square feet of space which includes hotels, office buildings and residential buildings and that number could double. 

The Hobby building property isan attractive location to developers. The property isn’t in the Capitol View Corridor, which means there’s no height restriction. 

“My assumption is that this block will also go for a mixed use development. A vertical mixed use development where they have ground floor retail, and then probably office and then a residential component on the top,” Heimsath said.

The facilities commission said constructing a similar sized building nowadays would cost $152 million. 

According to TFC, if the building is sold, the Legislature would decide how to spend the profit. 

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