Coming soon to East Austin: Major office development near Plaza Saltillo

Cielo Property Group — one of Austin’s most aggressive, young development companies — has another project in the works: a potential six-story office building with street level retail catty-corner from The Foundry, which is in the site preparation phase.

“We’ve assembled 36,000 square feet (of land) northeast of The Foundry,” said Bobby Dillard, co-principal of Cielo. “We love East Austin. To be right by (Capital Metro) rail is really meaningful.

Click on the photo to see a slideshow of the residential properties Cielo purchased to develop "Four East," the internal project working name, along with a current view of The Foundry site, a rendering of The Foundry and more than a dozen other projects and businesses in the area just east of I-35 between Third and Sixth streets. Almost every block has some new construction activity — though a few iconic businesses continue to operate.

Dillard applauded Endeavor Real Estate Group — another Austin development company — for setting high standards in the area with the big Plaza Saltillo mixed-use development, which is being done under the purview of Capital Metro, the city’s mass transit provider.

Plaza Saltillo is massive in scope compared to the many small bungalows that previously defined Austin’s east side. The vibe began changing dramatically as mid-rise projects such as the Corazon began cropping up. Most of the new, higher-density projects have been apartments.

New office space has been developed on a smaller scale but demand appears strong from creative type businesses.

Transwestern built 1645 E. Sixth at The Arnold and then sold it to California-based CIM Group. That property is filled with high profile tenants, such as C3 Presents, Front Gate Tickets, Conde Nast and Kohana Coffee.

Endeavor built offices at 2021 E. Fifth St., largely occupied by Big Red Dog Engineering.

Other creative companies such as Handsome have purchased modest industrial buildings and converted them into trendy offices.

So Cielo’s plan is probably a smart one with The Foundry presenting a majority of residential uses with some retail and office. Complementary uses encourage walkability so employees are able to live near places of work and shopping.

Though Cielo has closed on the handful of parcels in the 1600 block of East Sixth Street, it still has a few hurdles to overcome. A rezoning application was filed this week, incorporating the necessary regulations of the Plaza Saltillo Transit Oriented District Plan.

“The proposal is to redevelop the property with an office structure with some ground-floor retail and a small restaurant along (Comal Street),” said attorney Michael Whellan of Graves Dougherty Hearon & Moody PC, in a letter to Greg Guernsey, director of Austin’s Planning and Zoning Department. “The goal is to contribute to the mixed-use nature of the surrounding properties especially with walkable employment opporutnities less than a block from the transit station.”

Dillard said the residents of the houses Cielo purchased were happy about the outcome, even though they were in a sense displaced.

“They were happy. We paid them a lot of money. It was a win-win for everyone,” Dillard said.

He’s unsure how long it will take for the case to go before the Austin Planning Commission and ultimately the City Council — but Cielo is used to this sort of thing.

The company is in the midst of building a high-rise downtown, dubbed “Third+Shoal.” Previously, the company redeveloped the historic space above Annies Cafe on Congress Avenue and also redeveloped 220 S. Congress Ave., which is home to the Yeti Coolers flagship store.

In addition, Cielo has also been tapped to head up the redevelopment of a large parcel owned by the Episcopal Church at Seventh and Trinity Streets in northeast downtown.

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