Austinites in the path of wider I-35 prepare to be pushed out

Along Interstate 35, the notices have arrived. The highway expansion has been off and on for years. But now it’s actually happening. People who received letters or phone calls will have to leave. They have a few months, maybe more.

“It’s hard,” said Dina Flores, the owner of Spanish-immersion day care Escuelita del Alma. She still doesn’t know when she’ll have to relocate her business. “I’m losing a lot of sleep.”

Houses, apartments, restaurants, health care providers, barbershops, strip clubs, gas stations, a tattoo parlor, a lingerie store, a vape shop and many other small businesses – including The Austin Chronicle – are getting swept away to make space for the highway.

By the state’s count, 111 households and businesses will have to move. The number fluctuates based on how you define a displacement.

The Texas Department of Transportation will buy the properties and pay moving expenses. But TxDOT won’t pay for everything. Definitely not the lost sleep.

Some people in the path of the highway are still sleeping soundly, because they don’t know they’re getting pushed out yet. By law, TxDOT must give renters at least 90 days’ notice to vacate. But there’s no immediate requirement to inform renters when the state gives the green light to pave over apartments.

TxDOT oversight

At first, TxDOT didn’t realize people were living in the building behind West China Tea House. The agency thought the structure was part of the business serving more than 200 types of Chinese tea.

It was not.

The two-story building houses 22 apartment units. It’s part of the Village at 47th complex between I-35 and Airport Boulevard. Some one-bedroom apartments rent for about $1,000, affordable by Austin standards.

Nathan Bernier/KUT. This two-story apartment building behind West China Tea House is part of the Village at 47th apartment complex. At first, TxDOT didn’t realize anyone was living there. The apartment building and the West China Tea House will be destroyed for the highway project.

State officials caught the mistake in time for their final environmental report released in August. Much of the area will be cleared to store highway construction machines and the materials they use.

“It is messed up that they haven’t told us anything,” said Kennadie Kusbel, a chemical engineering student at UT Austin who lives in the building. “The fact that I’m being told this by a reporter and not my landlord is unfortunately not surprising and of course upsetting.”

“I really do appreciate you telling me,” she added after being informed of her rights. She would get at least 90 days’ notice. Her moving costs would be covered. She could receive money to pay the difference of renting a comparable apartment for up to three and a half years.

TxDOT has an idea to lighten the blow of losing 22 lower-cost apartment units. The state could require any future owner of the property to build affordable housing. The land, the agency estimates, could support at least 100 units. But that wouldn’t happen for years.

TxDOT. This TxDOT map shows the new highway in green, yellow, orange and blue. The shaded magenta area will be part of a construction staging zone. TxDOT says some of the area could be used to build affordable housing after the highway is built.

I-35: Past and future

Interstate 35 opened through downtown Austin in 1962. Back then, superhighways were popping up everywhere. They were new and exciting. The National System of Interstate and Defense Highways, as it was formally known, had been funded by Congress just a few years earlier.

Texas Highways Magazine/TxDOT. I-35 in downtown Austin was officially dedicated on March 29, 1962.

The federal government encouraged highway planners nationwide to carve interstates through city centers. The driving assumption: Highways would bring waves of customers to boost downtown business. In many places, including Austin, those concrete barriers would also harden racial segregation.

Since the freeway opened, the only major change to I-35 in Austin was in 1975. That’s when the upper decks were added.

But now, TxDOT is planning the biggest transformation of I-35 in Austin’s history. The $4.5 billion project is formally known as I-35 Capital Express Central or CapEx Central for short.

TxDOT. A technical drawing showing a cross-section of the I-35 expansion near 40th Street. The cross-section shows 20 lanes and two 10-foot-wide sidewalks for pedestrians and cyclists.

CapEx Central spans 8 miles along one of the most congested roadways in Texas: I-35 from Ben White Boulevard to U.S. Highway 290 East. TxDOT plans to add two lanes in each direction. The lanes would be reserved for vehicles with at least two passengers.

The upper decks will be torn down. What’s left will be fattened up to make room for the additional lanes. That’s why most people being pushed out are along the stretch of I-35 from Dean Keeton Street to Airport Boulevard.

The main lanes of I-35 will be lowered for much of the distance from Oltorf Street to Airport Boulevard. The city and the University of Texas could then cover parts of the sunken highway between Cesar Chavez Street and Airport. Buildings could be constructed on top, creating valuable new real estate around some of the priciest land in Texas.

But TxDOT won’t pay to cover the highway. The state estimates the city’s cost to be at least $542 million. UT would have to pay at least $394 million. The latest numbers are included in a TxDOT schematic quietly updated earlier this month.

The construction timeline for the entire CapEx Central project stretches out a decade. A baby born today would be in fifth grade by the time the highway is done.

How many affected? Depends how you count

Growing the highway’s footprint will require expropriating more than 54 acres of Austin into the state’s right of way. TxDOT tried to catalog the widespread disruption this will cause. The document, required by federal law, is called a final environmental impact statement (FEIS).

The FEIS and its chunky appendices are more than 18,000 pages long, a marvel of modern bureaucracy in PDF format. But even with all that paperwork, a solid count of how many people will be uprooted is hard to pin down.

TxDOT officially counts 111 homes and businesses to be displaced. Fifty-one households will be forced to move: five single-family homes and 46 apartments. Fifty-nine businesses will be pushed out. A vacant two-story office/retail building at I-35 northbound and East 31st Street is the 111th property.

The count does not include land without buildings or buildings without occupants.

One such example is the former home of the First Workers’ Day Labor Center. The building on I-35 southbound near 39th Street is vacant and not being advertised, so it’s not a displacement, according to TxDOT.

Nathan Bernier/KUT. This building at 4916 North I-35, the former home of the First Workers’ Day Labor Center, will be seized and torn down for the highway project. TxDOT doesn’t count this as a displacement, because no one is currently renting the building.

TxDOT’s list of displacements is missing at least four businesses in the path of the highway.

• Short Stop Burgers at Delwood Shopping Center
• EZ Auto Insurance at Delwood Shopping Center
• Firestone Auto Care at Hancock Center
• Wendy’s at Hancock Center

Those businesses operate in standalone buildings that will be demolished. TxDOT doesn’t consider them displacements because the businesses could – in theory – lease space elsewhere in the shopping centers.

Nathan Bernier/KUT. The Short Stop hamburger restaurant in the parking lot of the Delwood Shopping Center will be bulldozed to make space for a wider I-35. But the restaurant is not considered a “displacement” by TxDOT because the business could theoretically relocate elsewhere within the shopping center.

“Property owners have options for businesses to continue operating on the remainder of the property,” TxDOT spokesperson Brad Wheelis said in an email.

An economic analysis by TxDOT found the affected businesses employ almost 500 people.

That count does not include the employees of a gas station at the corner of I-35 and 38 1/2 Street, because it was being renovated when the state conducted the analysis. It’s now a Valero, given a fresh face just in time to be steamrolled.

Eminent domain: uncompensated costs

Patricia Lim/KUT. TxDOT agreed to lower the highway when the upper decks are demolished to allow a covering, either from 32nd Street to 38 1/2 Street or from 38 1/2 Street to Airport Boulevard. Buildings could then be constructed on top.

TxDOT is seizing properties through a process known as eminent domain – a legal authority used by the government to take private property for a public use. People are entitled to be paid for their real estate. But the compensation rarely makes up for all the losses, eminent domain attorneys say.

“I think it’s the case that almost everybody does not come out whole in the eminent domain process,” said Chris Clough, a lawyer who helped the South Terminal at Austin-Bergstrom International Airport secure an $88 million settlement with the city.

People pushed into the eminent domain process often have to hire lawyers, appraisers or others to secure fair compensation from the government. Those costs are not reimbursable.

However, business owners can get up to $2,500 to pay back their time spent looking at new locations. They might also qualify for some expenses to prepare the new location for the operation of their business.

But a business owner forced to move won’t be compensated for a loss in revenue if its customer base has to be rebuilt. Nor would the owner be paid for lost revenue while the business is moving locations.

“People lose established locations, and when they relocate, if they’re able to relocate, they don’t have the same ability to operate their business as they did before,” said Clough, a partner at Barron, Adler, Clough & Oddo. (Former Mayor Steve Adler left the firm in 2012, but the company kept the name.)

“Property owners must do their best to be paid,” Clough said. “But I think oftentimes, they come up short of being made whole.”

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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