Pearlstone Partners has scrapped its plans for a condo development in Downtown Austin and is thinking hotel instead.
Robert Lee’s firm envisions a 35-story hotel for its 14th & Lavaca tower, switching gears from previous plans for a 250-unit condo project near the Texas Capitol, the Austin Business Journal reported.
The Austin Design Commission determined that the proposed tower qualifies for a density bonus under the city’s urban design guidelines. Pearlstone needs final approval from City Council for the hotel project to come to fruition.
Rising 399 feet on a 17,000-square-foot site, 14th & Lavaca is slated for 280 rooms, multiple floors of parking capped by an observation deck and nearly 3,000 square foot ground-floor commercial space that could be used for a restaurant.
For the project to proceed as intended, Pearlstone is seeking approval to participate in the city’s density bonus program, increasing the floor-to-area ratio from 8:1 to 17:1 and surpassing the allowed 15:1 ratio. In exchange for added density, the company has committed to paying $2.2 million in development bonus fees to the Affordable Housing Trust Fund.
Architect Paul Suttles of STG Design highlighted features like overhangs providing shade and the observation deck contributing to the building’s unique skyline presence. However, despite design approval, the commission urged additional changes, expressing concerns about limited street-level activation and excessive parking, the outlet reported.
The property’s previous owners, Sabot Development and Twin Crest Capital, also wanted to build a luxury hotel after acquiring the downtown site in 2020. Those firms sold the property to Pearlstone in 2022.
The proposed tower is along the planned route for Austin’s $5 billion light rail system. Other potential projects in the area include Cypress Real Estate Advisors’ 31-story office tower next to the SXSW Center.
Pearlstone remains bullish on Austin. The local developer has three projects in the works that could equate to a $700 million investment in the city. In addition, the firm has three developments under construction that are expected to be delivered in the next two years.