Here's where Austin's light rail plan could displace businesses and eat up real estate

The business disruptions- redevelopment opportunities - that can be expected from Austin's new light rail system are coming into focus.

Buildout of the 9.88-mile system will require the displacement of at least 59 businesses. It will entail over 300 property acquisitions totaling 85 acres, an estimated 277 of which will be partial acquisitions of parcels and 27 of which will be full-property acquisitions. That's according to a draft environmental impact statement from the Austin Transit Partnership, the entity overseeing the multibillion-dollar project, that was released in January.

The figures and addresses could still change because they're based on designs from May 2024, and ATP continues to refine the plans, said Jennifer Pyne, ATP's executive president of planning community and federal programs. She said ATP is doing what it can to reduce or avoid property impacts as the design work continues over the next year.

The latest maps and address lists don't just foreshadow potential business closures - they can help landowners and developers position nearby properties for upscaling opportunities. Many old buildings and underused sites will suddenly be even more primed for big-city development when the commuter train and its stops come to fruition.

As things stand, businesses along major streets such as Guadalupe Street and East Riverside Drive could be looking for new homes, based on the latest design.

•                                                                                        The latest route for light rail was released in January.
•                                                                                         AUSTIN TRANSIT PARTNERSHIP

ATP has said it will work with the city of Austin to help disburse $300 million in anti-displacement funding that was approved by voters to aid those affected by the buildout, although the city of Austin's Housing Department will lead the way on the effort. In addition to the $300 million for people living in the areas, Pyne said ATP is also putting together a budget to assist businesses that could be impacted in other ways by the light rail buildout, which could be launched in 2026, she said.

Property acquisitions and construction of the light rail system are both slated to start in 2027, she said.

ATP intends to build 15 stations, as well as three park-and-ride locations that each would have a parking lot or garage.

The largest acquisition would total about 62 acres for ATP's operations and maintenance facility, which is proposed to be in an industrial park near the intersection of U.S. Highway 183 and State Highway 71. Based on a map provided by ATP, it appears the operations and management facility would be on Airport Commerce Drive and likely displace businesses at the Airport Commerce Park. About 24 businesses at the Airport Commerce Park are expected to be impacted, though ATP notes that it may be possible to relocate them to other light industrial and commercially zoned properties in the area.

•                                                                  A look at the Austin Transit Partnership's proposed operations and maintenance facility for
•                                                                  light rail. -  AUSTIN TRANSIT PARTNERSHIP

The remaining 35 businesses that stand to be displaced include restaurants, shops, automotive and healthcare facilities in other areas of the city, according to the study. These acquisitions are needed to accommodate parts of the light rail and other infrastructure components required for the buildout, Pyne said.

One of the park-and-ride sports is planned at the intersection of 38th and Guadalupe streets and would have 300 parking spots, as pictured below. It's expected that three businesses at the intersection will need to be relocated, though ATP declined to disclose which. Businesses that operate at the intersection include Starbucks, Jiffy Lube, City Vet, and Wild & Beautiful Natural Aesthetics.

Both the Jiffy Lube and Wild & Beautiful are on the list of properties that could be fully acquired to accommodate the buildout.

What's a small business to do?

Olman Quesada, who started the med spa Wild & Beautiful in 2023 along with his wife, Jennifer Quesada, said neither he nor his landlord have been contacted by ATP about the possibility that the property will need to be acquired.

"Obviously, my concern is just our livelihood and the fact that we poured our life savings into this business," he said.

Alex Gale, ATP's senior vice president of real estate facilities and IT, said ATP records show that it has reached out to the property owner where Wild & Beautiful is located but hasn't received a response. He also said ATP has made attempts to reach out to all property owners and has been relying on them to pass along the information to tenants.

"Out of respect to the tenants, we do rely on the property owners to share the information with their renters and lessees," Gale said.  "However, we are open to engaging with the tenants in addition to the property owners who are interested in learning more about potential impacts."

Wild & Beautiful moved into its current location in June 2024, and Quesada estimates he and his wife spent $145,000 to renovate it and spruce it up with murals, neon signs, and decorations. Quesada said the location has been "phenomenal" for business, with reasonable lease payments, plenty of parking, good visibility along a busy road, and enough size to host after-hours events.

"We wanted to just be more than a med spa, we wanted to build a community," he said.

He's not looking forward to searching anew for a location, saying it took eight months to find the current one. He also worries that he won't be able to find another spot with the same amenities.

"There's so many nuances to a business that affect our revenue," Quesada said. "I don't think I can just find something exactly like this, apples to apples."

Austin's retail market is about 97% occupied, yielding a very challenging environment for tenants seeking space.