How RedLeaf Properties is transforming Austin’s old Highland Mall
When completed in the next several years, the redevelopment of Highland Mall in North Central Austin into a mixed-use community could be a nationally recognized prototype for success in the tricky niche of public-private partnerships.
Until now, most of the publicity has centered around Austin Community College and its ambitious renovations to the obsolete regional mall — creating academic spaces that cater to a range of disciplines.
“People have a misconception about Highland because they think it’s all ACC,” said Matt Whelan, founder and principal of RedLeaf Properties LLC.
In fact, Whelan and his team set the project in motion. All of the construction activity today had its genesis in Whelan’s “what if” mentality, which dates back to the aftermath of the 2008 mortgage meltdown.
“At the time, investors were raising funds to buy distressed properties,” Whelan said. “We were working with Dillards — the mall property was a complete mess.”
A former executive with Catellus Development Group, which had just started the redevelopment of Austin’s former municipal airport into a master-planned community, Whelan was looking to break out on his own with another big-picture challenge.
He needed only to look across I-35 from the old airport to see a rundown regional retail center and an adjacent neighborhood tethered to the economic decline.
As it happened, Whelan was in touch with Dillards, one of the anchors at Highland, about what to do next. There was no easy solution, given the hodgepodge of national retailers and private investors with stakes in the regional mall.
“It was very complicated ownership with the department stores owning their properties,” Whelan said.
Still, Whelan observed potential and poured his energies into starting RedLeaf Properties — a corporate vehicle for revitalizing the mall and also saving the neighborhood.
“We needed support from the community and I thought the best way would be to go with the planning that was already there,” Whelan said.
RedLeaf would not pursue a huge infill rezoning. Yet the question remained: Who would want an obsolete retail fortress?
Whelan approached Austin Community College. It was a fortuitous move.
“They said they wanted to own [property] and had some significant square footage needs,” Whelan said. “They saw opportunity with this site to do all they wanted.”
Another bit of serendipity: Voters approved ACC’s $386 million bond measure in November 2014 for a capital improvement expansion. Access to big capital helped move the project along.
RedLeaf agreed to handle the due diligence — assembling the properties and crafting the mix of uses for the project. ACC purchased the property and in turn sold some parcels to RedLeaf.
“Each piece had to make sense on its own,” Whelan said. “We did all the groundwork and it took six years for the first projects to start to deliver.”
The 81-acre parcel is under extensive development. ACC has delivered Phase I, transforming the former JC Penney store into a math emporium and classrooms, and is well underway with Phase II of the mall’s retrofitting.
RedLeaf, in the meantime, lured national multifamily developer Greystar to build the first apartment complex — the Elan Parkside project near Airport Boulevard and Koenig Lane. Completion of the 300-plus-unit project is expected this summer.
RedLeaf is poised to create even more apartment housing, significant retail and break ground on office buildings.
Open space — including three signature parks — round out the plan.
“It’s all real and very connected,” Whelan said. “We’re going right according to script.”
Source: Austin Business Journal
Jan Buchholz, Senior Staff Writer