A high-profile city purchase of a former office campus is in the works. The Austin City Council approved the purchase of the $87 million Tokyo Electron campus and surrounding property in southeast Austin at its regular Thursday meeting.
Tokyo Electron put the 107-acre property, its former U.S. headquarters at 2400 Grove Boulevard, on the market last fall. Located off East Riverside Drive, the former campus includes one 46.8-acre tract with two buildings totaling almost 190,000 square feet and another 60 acres of raw land.
The city will tap $27 million in Project Connect Anti-Displacement Funds to buy the property. The fund prioritizes investments in areas near transit lines (in this case, planned transit lines) that are vulnerable to displacement to keep those areas affordable, according to a city press release. The property is near a planned light rail line along Riverside Drive, a part of Project Connect, the massive transit plan Austin voters approved in 2020.
The remaining $60 million will be funded through bonds backed by property tax revenue.
The two buildings on the property will be leased back for one year to Tokyo Electron while the company moves to its new headquarters on South First Street. The city then plans to redevelop them into a Combined Transportation and Emergency Communication Center, aimed at enhancing its emergency response and communication capabilities.
Additional development of the site will include "extensive planning, feasibility assessments, and community engagement for area needs before any plans are solidified," according to the city.
“This was a rare, generational opportunity to purchase a huge swath of mostly undeveloped land centrally located in Austin,” said Assistant City Manager Veronica Briseño. “In addition to much-needed administrative offices for critical city services, we have the chance to create not just affordable housing, but an entire community with space for commercial and cultural endeavors, all with exceptional access to public transit.”
“The vision is for a dense, transit-oriented neighborhood that could conservatively accommodate 1,100 living units,” Mayor Kirk Watson said. “The potential here is great.”
The sale includes 66 undeveloped acres adjacent to the Austin Energy Control Center at 2500 Montopolis Drive and near more than 18 acres at the southeast corner of Grove Boulevard and Riverside Drive owned by the Austin Housing Finance Corporation, which the city said offers opportunities for additional affordable housing.
