The agency overseeing Austin’s voter-approved light rail project has postponed a controversial $47 million proposal for new downtown office space after sharp criticism from Mayor Kirk Watson over the cost amid broader budget pressures.
The Austin Transit Partnership had been set to consider two major expenditures this week: a lease of more than 51,000 square feet in a downtown high-rise for up to $32 million over 90 months and an additional $15 million for renovations and build-out costs.
Instead, the board delayed action on both items to allow for further review and additional cost analysis.
Watson, who serves as vice chair of the partnership’s board, called the proposal “inappropriate” as the city and other local entities face financial strain.
“This proposed action comes even as the City of Austin faces serious budget challenges and is cutting important, critical programs,” Watson said in a public message to city leaders.
The mayor pointed to budget difficulties facing the city, school closures in Austin Independent School District and recent tax-related debates in Travis County as reasons for greater fiscal restraint.
The Austin Transit Partnership said the move was driven by staffing growth tied to the city’s multibillion-dollar Project Connect rail expansion. The agency currently employs about 200 people and expects that number to grow to roughly 300 by the end of the year.
Officials said the agency has outgrown its current downtown office and requires approximately 15,000 additional square feet.
Watson urged the agency to consider a less expensive alternative by sharing office space with Capital Metropolitan Transportation Authority, commonly known as CapMetro, at its East Austin headquarters.
Supporters of that approach argue co-locating the two public agencies could improve coordination on the rail project while reducing long-term lease costs.
The delay comes as Project Connect, Austin’s $7.1 billion light rail initiative approved by voters in 2020, continues to move toward construction, which is expected to begin in 2027.
The first phase of the project is planned to include about 10 miles of track and 15 stations serving North, Central and East Austin.
The office proposal is expected to return to the board at a later date after additional review.