Austin Energy is in the market for a new headquarters capable of housing employees currently scattered across the city.
The city’s electric utility is reviewing proposals recently solicited – with help from commercial real estate firm CBRE – from developers for a building of about 300,000 square feet. For comparison, that is about half the square footage of downtown Austin’s Frost Bank Tower.
Developers who responded have pitched a variety of sites citywide, CBRE said.
Austin Energy and CBRE expect to make a decision in the coming weeks. After that, it would be presented to Austin City Council for approval before construction could begin, with a targeted completion date as soon as 2020.
A price tag has not yet been attached to the project.
A space crunch has meant that Austin Energy’s 1,700 workers are in many cases crammed into conference rooms and other spots not intended to be workspaces, according to spokesman Robert Cullick. And with workers spread across more than a dozen sites – some city-owned, some leased – collaboration can be difficult, he said.
“We’ve been around 120 years and we plan to be around for a long time to come,” Cullick said. “We really don’t want to lease any more space because you’re kind of throwing money away.”
Austin Energy currently leases 138,157 square feet of space citywide, including 71,920 square feet in an office building that houses customer care workers at 811 Barton Springs Road just south of downtown, according to city documents from March.
Monthly payments for leased facilities are expected to escalate in the coming years, those documents indicate.
The request for proposals from Austin Energy and CBRE sets out some basic guidelines for what the proposed headquarters would look like. Those guidelines include a large customer call center, meeting rooms of various sizes on each floor, a cafeteria and space for physical fitness activities.
The building would also need to be capable of achieving high-level certifications for energy efficiency, according to the request.
“We don’t anticipate working in a luxurious space,” Cullick said. “We’re just looking for something that gets us together at a reasonable cost.”
This isn’t the first time Austin Energy has proposed new offices. In 2014, a plan that called for a 180,000-square-foot building at East Riverside Drive and Grove Boulevard in Southeast Austin came under fire for its $67 million price tag.
The process being used by Austin Energy this time around is nearly identical to the one used last year to find a home for hundreds of city planning and development workers, CBRE senior vice president Eric DeJernett said.
That 260,000-square-foot Planning and Development Center will be constructed adjacent to the Austin Community College Highland campus in Central Austin. The project has an estimated price tag of $122 million.
“This is a fairly new program for the city of Austin,” DeJernett said. “It’s fairly cutting edge to engage the development community. It’s a much more efficient way to deliver facilities.”
Other city of Austin departments have requested additional space in recent years, as well. DeJernett said it’s not unusual for a growing city to need more room to house its workers.
“All these departments need to grow along with the city,” he said. “Many of them have been in the same spaces since the 1980s or 1990s. Look at how much the city has grown since then.”
Austin’s office market is one of the most robust in the nation and large blocks of office space like those needed by Austin Energy and planning and development workers simply aren’t available from existing inventory, CBRE first vice president Katie Ekstrom said.
Ekstrom is not involved in the search for Austin Energy’s new home.
“Over the next few years the Austin central business district will continue to tighten with no new office development delivering until 2021,” she said. “We are on the brink of a supply issue downtown which is why you are seeing office requirements spill over to other centralized urban areas such as the east side and the South Congress and South Lamar areas.”