City of Austin to consider buying downtown Salvation Army property for $15.05M
Published: Thu, 10/26/23
Exclusive: City of Austin to consider buying downtown Salvation Army property for $15.05M
Kellie Alexander, who has been homeless for two years, walks to the Salvation Army homeless shelter Thursday March 2, 2023, where she has been living for two months.
Jay Janner / American-Statesman
Austin American-Statesman
Ella McCarthy and Shonda Novak, Austin American-Statesman
October 24, 2023
The Austin City Council will consider purchasing the Salvation Army's downtown property for $15,050,000 in order to continue operating the homeless shelter on a long-term basis, the American-Statesman has confirmed.
The nonprofit closed the shelter in April. The City Council then approved a lease agreement with the Salvation Army to allow the city to reopen the shelter downtown for one year starting July 1.
The property includes two buildings and a parking lot — the Salvation Army shelter at 501 E. 8th St., along with a 1,500 square-foot retail building at 718 Red River St. and a nearly half-acre surface parking lot at 700 Red River St.
An item on the Nov. 9 city council agenda will be to "authorize the negotiation and execution of the documents and instruments necessary to purchase The Salvation Army's real estate holdings located in Block 88 in downtown Austin," according to an internal memo sent to the mayor and City Council from Michael Gates, the city's real estate officer, through Ed Van Eenoo, the city's chief financial officer.
"If approved, this purchase would allow for the reestablishment of that critical service on a long-term basis, save funding allocated for the remaining term of the lease authorized by Council on June 8, 2023, and allow the City to fully realize the benefit of building repairs currently being made to the facility," the memo states.
According to the Travis Central Appraisal District, the shelter building alone is valued this year at $12.5 million — up from the nearly $10.7 million it was valued at in 2022. In 2023, the retail building on Red River Street was valued at nearly $470,000 and the parking lot was valued at nearly $1.6 million.
CBRE, the commercial real estate services firm, was hired by the Salvation Army to market and sell the property which was put up for sale in May. CBRE declined to comment on the city's intent to purchase the building.
According to the memo, "Staff moved immediately to provide Council an opportunity to acquire the property and preserve the downtown shelter space provided by the former Salvation Army Downtown Center."
The Salvation Army first opened the downtown Austin shelter in 1988, regularly maintained at least 100 shelter beds and had long served as the only dedicated shelter in the downtown area to serve single women experiencing homelessness, according to the memo.