BACKGROUND

The site is one of the last owned by the City of Austin downtown that is designated for redevelopment.  It consists of two parcels – 1215 Red River Street and 606 East 12th Street – summing to 1.73 acres of land near Interstate Highway 35, the State Capitol, and the University of Texas at Austin.  The northeast district of downtown Austin blends iconic live music clubs, world-class parks and open spaces, and respected healthcare institutions. 

Through a series of acquisitions from 1952 to 1976, the City purchased the site at 1215 Red River.  In 1988, the City offered the land to Brackenridge Hospital to attract Rehab Hospital Services Corporation (RHSC), a physical rehabilitation provider.  RHSC executed a ground lease with the City through February 28, 2063, and constructed the four-story facility, which opened in 1990.  RHSC assigned the ground lease in 1995 to HealthSouth which developed a parking garage with 62 spaces at 606 East 12th Street to serve the facility.  In 2016, HealthSouth closed this facility, and sold to the City its leasehold interests as tenant and title to the parking garage on February 28, 2017. 

PROJECT TIMELINE

 

2024

October

  • On October 17, 2024, Interim Housing Director Mandy DeMayo sent a memorandum to Mayor and Council in response to Resolution No. 20230921-101 sharing two additional scenarios requested by Council regarding the redevelopment of 1215 Red River and 606 East 12th Streets (the former HealthSouth Hospital and Parking Garage) as an inclusive, mixed-use development in collaboration with the Austin Economic Development Corporation (AEDC).
February 
January

  • On January 31, 2024, Interim Housing Director Mandy DeMayo sent a memorandum to Mayor and Council in response to Resolution No. 20230921-101  regarding City Council’s desire to consider detailed scenarios and explore the feasibility and costs of redeveloping 1215 Red River and 606 East 12th Streets (the former HealthSouth Hospital and Parking Garage) as an inclusive, mixed-use development in collaboration with the Austin Economic Development Corporation (AEDC).

 

2023

September
  • On September 21, 2023, Austin City Council approved Resolution No. 20230921-101 directing the City Manager to provide detailed scenarios for recommendation and further deliberation regarding the redevelopment of 1215 Red River Street and 606 East 12th Street by January 31, 2024.  
  • On September 15, 2023, Assistant City Manager Veronica Briseño sent a memorandum to Mayor and Council in response to Resolution No. 20230720-132 regarding the redevelopment of City-owned properties located at 1215 Red River and 606 East 12th Street — the former HealthSouth rehabilitation hospital and garage (HealthSouth Property).  The memorandum provides a summary of community engagement efforts and of staff’s briefing for Council’s Housing and Planning Committee as well as staff recommendations. 
  • On September 14, 2023, Austin City Council approved execution of a contract with AAR, Inc. for the structural demolition and proper disposal of improvements located at 1215 Red River Street and 606 East 12th Street, for a total contract amount not to exceed $471,615.  
  • On September 6, 2023, staff provided a briefing for Council’s Housing and Planning Committee as directed in Resolution 20230720-132.  
August
  • The former HealthSouth hospital site is one of the last City-owned downtown properties designated for redevelopment. The City seeks input on what the public would like to see on this site. Please visit Speak Up Austin before September 1, 2023 to share your opinions.
July
  • On July 20, 2023, Austin City Council approved a resolution regarding next steps for the redevelopment of 1215 Red River Street and 606 East 12th Street known as HealthSouth.  Resolution 20230720-132
  • On July 18, 2023, during Executive Session, Austin City Council discussed real estate matters related to the purchase, exchange, lease, or value of an interest in two parcels located at 1215 Red River Street and 606 East 12th Street in Austin Texas, known as the HealthSouth site. (Real property - Section 551.072 of the Government Code) under Item E002.

 
June 
  • On June 28, 2023, Assistant City Manager Veronica Briseño sent a memorandum to Mayor and Council to notify them that negotiations with Aspen Heights Partners had ceased as the developer had recently indicated that the Council-approved term sheet is no longer financially feasible due to market conditions. The Exclusive Negotiating Agreement terminated on June 29, 2023, and provided closure to RFP 5500 SMW3002, regarding the redevelopment of City-owned properties located at 1215 Red River and 606 East 12th Street—the former HealthSouth rehabilitation hospital and garage (HealthSouth Property).     
  •  Memo to Mayor and Council – June 28, 2023  
March
  • Per Austin City Council’s direction, effective March 31, 2023, staff executed an extension to June 29, 2023 to continue negotiations in drafting the Master Development Agreement (MDA) for Council review and approval prior to execution in 2023.
February
January

2022

December
  • Per Austin City Council’s direction, effective December 31, 2022, staff executed an extension to March 31, 2023 to continue negotiations in drafting the Master Development Agreement (MDA) for Council review and approval prior to execution in 2023. 
  • On December 8, 2022, City Council directed staff to initiate rezoning of the City’s properties located at 1215 Red River Street and 606 East 12th Street to Central Business District (CBD) and initiating amendments to City Code Section 25-2-586 to include these properties in the Downtown Density Bonus Program. These will be considered concurrently with Aspen Heights Partners’ rezoning application for 614 East 12th Street.  
October
  • Per Austin City Council's direction, staff executed an extension to December 31, 2022 to the exclusive negotiating agreement (ENA) to continue negotiations in drafting the Master Development Agreement (MDA) for Council review and approval prior to execution in 2023.
September
  • On September 29, 2022, Austin City Council will consider Item 12 authorizing the negotiation and execution of a master development agreement with Aspen Heights Partners, or its affiliates, for terms governing the development, construction, and lease of a mixed-use residential development and associated infrastructure on City-owned sites located at 1215 Red River Street and 606 East 12th Street under terms outlined in a term sheet.
  • On September 27, 2021, Council will hold a work session and receive a briefing on Item B003 on the Negotiated Final Terms with Aspen Heights for the Redevelopment of 1215 Red River and 606 East 12th Streets. 
August
  • On August 16, 2022, at Austin City Council’s direction, staff executed an extension to the exclusive negotiating agreement (ENA) to September 30, 2022 to analyze Aspen Heights’ Best and Final Offer received July 27, 2022.  The ENA provides the framework for the redevelopment of the former Health South site (1215 Red River and 606 E 12th St.).  
July
  • On July 28, 2022 during public session, Austin City Council authorized staff to amend the exclusive negotiating agreement (ENA) with Aspen Heights Partners for the redevelopment of 1215 Red River Street and 606 East 12th Street, the former Health South tract, to extend the agreement through September 30, 2022.  
  • On July 28, 2022 during executive session, Austin City Council discussed real estate matters related to the purchase, exchange, lease or value of an interest in real property and improvements related to the redevelopment of the HealthSouth property located at 1215 Red River Street and 606 East 12th Street (Real property -Section 551.072 of the Government Code). 
  • On July 26, 2022 during executive session, Austin City Council discussed real estate matters related to the purchase, exchange, lease or value of an interest in real property and improvements related to the redevelopment of the HealthSouth property located at 1215 Red River Street and 606 East 12th Street (Real property -Section 551.072 of the Government Code).
May
  • On May 18, 2022, staff decided to continue negotiations with the Aspen Heights for the next 90 days in accordance with the executed exclusive negotiating agreement (ENA). The ENA provides the framework for the redevelopment of the former Health South site (1215 Red River and 606 E 12th St.).
  • On May 17, 2022 while in executive session, Austin City Council discussed real estate matters related to the purchase, exchange, lease or value of an interest in real property and improvements related to the redevelopment of the HealthSouth property located at 1215 Red River Street and 606 East 12th Street. (Real property -Section 551.072 of the Government Code).
  • On May 5, 2022 while in executive session, Austin City Council discussed real estate matters related to the purchase, exchange, lease or value of an interest in real property and improvements related to the redevelopment of the HealthSouth property located at 1215 Red River Street and 606 East 12th Street. (Real property -Section 551.072 of the Government Code).
February

2021

July-Dec
  • Under the terms outlined in the ENA, City staff and Aspen Heights meet regularly to negotiate proposed terms of a Master Development Agreement (MDA) governing the redevelopment of the City's tracts. The ENA expires on February 17, 2022, however, if the City and Aspen Heights have not yet agreed on essential terms of the MDA, the parties may extend negotiation by mutual agreement to May 17, 2022. If negotiations are still not complete, Austin's City Manager may further extend the ENA term until August 17, 2022. During this time, the City and Aspen Heights will negotiate in good faith to reach agreement on a MDA. Once the City and Aspen Heights reach final proposed terms under a MDA, the proposed terms will be shared with the public and posted for discussion at meetings of the Downtown, Design and Community Development Commissioners prior to seeking City Council approval. The City's Anti-Lobbying Ordinance (ALO), which governs contact between applicants and City officials and staff, expired 60 days after the ENA was executed, on July 17, 2021. For additional information:
June
May
January
  • On January 27, 2021, City Council will consider Item 13 relating to the authorization negotiation and execution of an exclusive negotiation agreement with Aspen Heights Partners, for terms governing a master developer contract for the redevelopment of 1215 Red River and 606 East 12th, the former HealthSouth tract.:
  • On January 20, 2021, City staff provided the Mayor and City Council updates on the process and options available to City Council to select a real estate development team to redevelop City-owned parcels at 1215 Red River and 606 East 12th Streets (Request For Proposals (RFP) 5500 SWM3002).:

2020

December
  • On December 8, 2020, City staff provided the Mayor and City Council responses to questions from City Council members and provided additional information on the process and the proposals received regarding the redevelopment of City-owned parcels at 1215 Red River and 606 East 12th (RFP 5500 SWM 3002) per discussion during Council meetings on December 1 and 3, 2020:
  • On December 1 and 3, 2020, City staff presented staff’s recommendation of Aspen Heights as the development team for 1215 Red River and 606 East 12th (RFP 5500 SWM 3002):
November
  • On November 3, 2020, City staff provided the Mayor and City Council an update on the City’s Request for Proposals for the redevelopment of the City-owned parcels at 1215 Red River and its accompanying parking garage at 606 East 12th (RFP 5500 SWM 3002).
February
January
  • At the January 21, 2020 Council Work Session, several Council members asked staff to provide estimates on costs and timeline to convert temporarily the vacant rehabilitation hospital facility to housing for the homeless. 

2019

November
  • On November 18, 2019, the City released RFP 5500 SMW3002 for the Redevelopment of 1215 Red River and 606 East 12th Streets:
  • On November 5, 2019, City staff provided the Mayor and City Council an update on City staff actions to solicit proposals for the redevelopment of the City-owned parcels at 1215 Red River and its accompanying parking garage at 606 East 12th:

2018

November
October
  • On October 4, 2018, City Council directed staff to initiate a solicitation for the redevelopment of the site to include mixed-income housing that incorporates units with multiple bedrooms serving households earning at or below 60 percent of AMFI.
July

2017

November
August
May
March
  • On March 23, 2017, City Council directed the City Manager to evaluate redevelopment options for the site with respects to its potential to provide affordable housing for individuals and families earning at or below 60 perfect of area media family income (AMFI).

2016

November

 

 

Authorized contacts:

Shawn Willett, Deputy Procurement Officer                        

Phone: (512) 974-2021                                                       

E-Mail: Shawn.Willett@austintexas.gov                             

Lynnette Hicks, Procurement Specialist

Phone: (512) 974-3349

E-Mail: Lynnette.Hicks@austintexas.gov

All questions about the solicitation and plans for former HealthSouth site should be directed to these Authorized Contact Persons.

 

Former HealthSouth Facility

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