Austin Business Journal writes, "Austin’s Rainey Street is about to emerge from a construction cocoon — solidifying its longtime transformation from a once sleepy, residential street into one of the densest areas in Texas, if not the country.
The district in downtown Austin has been years in the making. It was a hub of late-night entertainment and barhopping in the 2010s, and a flurry of high-rise construction in recent years has made it difficult for bars and businesses to bring in patrons.
Once the dust settles, however, the new Rainey Street Historic District will become its own ecosystem. Thousands will call the area home, in addition to a mixture of hotels, offices, retailers, restaurants and a host of both daytime and nighttime activities. Plus, a trail system will connect the area to other parts of downtown.
Most of the current construction work is expected to end by early 2026, yielding a more permanent version of the long-evolving street.
"It's not going to be like the homogenous city street with bars in it that Rainey was — that I fell in love with in 2012 – it's not going to be that,” said Ben Seigel of longtime Rainey bar Banger’s. “But man, it's going to be something really cool. (It's) going to be an amazing thing for residents of the city, people visiting the city, to kind of interact with and get a real interesting taste of Austin."
The new Rainey
About 7,500 residents will live in the small district that spans about a three-block radius, and it will serve approximately 10,000 people when calculating hotel guests.
The Rainey Street Historic District has about 2,600 finished condos and apartments — and about 2,100 more coming online, according to Urbanspace CEO Kevin Burns, who has played a significant role in the transformation of the area. High-rises under construction in the district include 700 River, Waterline, Travis and Paseo, in addition to the already built 44 East Ave, Vesper Residences, The Quincy and more.
The area will have plenty of parking, Burns said, though the district is ideally a place for people to walk to or use rideshare.
More food and beverage concepts are also on tap, from coffee shops aimed at bringing in more daytime traffic to restaurants and bars that buzz at night. When all is said and done, there will be more bars in the district than there were before, according to Burns.
Burns' company, Urbanspace, had the first condo tower listing in the early 2000s with the 13-story Milago. He credits the boom of development along Lady Bird Lake's shore in the district to the success of Milago and the city's foresight to rezone the once-residential area into the Central Business District.
Milago "proved that people were willing to buy condos in the area," Burns said.
Burns purchased a site in 2006 that now houses his 56-story The Modern condo tower, and Urbanspace brokered more than half a dozen different sites in the district over the years, he said. The Modern, set to be complete this summer, will have over 300 condos designed to cater to a variety of customers, from the two penthouse suites to its 20 affordably priced units. Additionally, Urbanspace is contributing $1.3 million to the city's affordable housing fund, as well as $500,000 to The Trail Foundation to complete the Rainey Street trailhead.
Texas’ tallest tower, Waterline, will come online in the summer of 2026. It will feature the luxury 1 Hotel, as well as 700,000 square feet of office space, more than 350 apartments and about 30,000 square feet dedicated to retail, food and beverage business. Even a nominal percent of retail space plays a massive part in the tower because that's what gives the building personality, said Seth Johnston, executive vice president of Lincoln Property Co., which is one of the tower developers.
Johnston said 1 Hotel will have its own restaurant. Meanwhile, the tower also has space for two restaurants on the ground floor that will be marketed and leased by Lincoln, though it's still looking for restaurateurs. He said they're looking for a restaurant with a "local feel and flare." It would be ideal to have a place offering lunch and dinner, or it could be a late-night concept where, as the night draws in, the restaurant dims its lights, turns up the music and brings in a late-night crowd, he said.
“People call Austin an 18-hour-city — not quite yet a 24-hour city — but I think that this neighborhood could turn into a 24-hour neighborhood,” said Johnston.
Johnston declined to comment on how much a square foot of retail space will cost tenants.
Burns said for his tower, retail will go for about $50 to $60 per square foot, plus a percentage of sales. This is on par, if not cheaper, than retail rents in downtown Austin. “It’s a shared risk, shared reward,” he said.
The district is also supposed to be better connected to downtown soon through a phase of the Waterloo Greenway trail. One phase of the project is expected to connect Fourth Street to Lady Bird Lake — near Cesar Chavez Street — and be complete in the first half of 2026, said John Rigdon, chief planning and design officer for Waterloo Greenway.
Growing pains
For the past two years, activity on Rainey Street has come to a grinding halt. Getting into the district became cluttered and difficult — and good luck finding parking.
Clanks, clashes and sounds of drilling and welding have been overpowering. It’s an environment that’s less than ideal for bars and restaurants wanting to attract customers.
Every bar on Rainey Street saw liquor sales slide at least 40% from 2022 to 2023, according to Matt Wolski of Pursuit Concepts, who opened the bar Idle Hands in 2020. His lease for Idle Hands has about five years left on it and the future for him in the district is unclear past that.
But Wolski is staying as long as he can to see the changes through.
"If you've made it this far, or batten down the hatches of the past 18 months … you’ve gotta see it through," Wolski said.
Siegel, on the other hand, hasn’t seen a dip in business amid construction because his restaurant and bar host events. Banger’s has also opened a sandwich shop onsite, a smokehouse, a sausage house and a beer garden with room to add more to evolve with the street, he said.
“We're doing shockingly well considering the kind of headwinds that we're facing,” Siegel said.
It’s not the first time the area has experienced significant change.
In the late 2000s, entrepreneurBridget Dunlap came onto the scene with a vision of late-night fun and barhopping, after the city of Austin rezoned the area into a CBD. She said she saw a lot of drug paraphernalia and encampments for those experiencing homelessness around one of the homes she ultimately turned into a bar. Slowly, the street and district transformed into a destination for boisterous partying.
Dunlap was to Rainey Street what Liz Lambert was to South Congress Avenue. Both women propelled these areas into hotspots for the creative class, which ultimately enticed deeper pockets to invest in these previously overlooked areas. Dunlap’s Lustre Pearl was the first bar to open on Rainey Street, the hype boomed, and the bar owner went on to open Clive, and the now-closed Bar 96 and the renowned Container Bar, made up of containers on a property owned by Burns that is now the Modern.
In 2006, Burns thought to turn the site into six townhomes, but the plans stalled with the oncoming housing crash. Dunlap eventually asked Burns to use the space for Container Bar, which was one of the street's most popular hangouts, but from its inception it was intended to be a temporary project, he said. The bar was such a success, Dunlap began paying Burns a percentage of sales and it eventually became a win-win, Burns said.
"I basically just shelved doing anything for a while, and then finally I decided to put my big boy pants on and say, 'You know what, I'm gonna go and do my first big project.' And in the meantime, I bought 92 Rainey Street. I bought that in 2015, so nine years later, and that was enough to be able to have a development site for a tower," Burns said.
Burns likened the massive changes in the district to Paris, a city that was rebuilt in the mid-to-late 1800s. Though Dunlap, on the other hand, hasn’t been as thrilled with the transformation in the area.
“Once they gave eight or nine commercial licenses at one time on that little street, it kind of blew everything up. And it didn’t make it very like, ‘Hey I want to go down to Rainey Street and have some fun.’ (It made it) a morgue,” Dunlap said.
Light at the end of the tunnel
Wolski and Seigel said they believe there will still be a place for the bungalow bars and things, but that won't be the only style of entertainment.
For example, Palace Laundry is one of the bars planned for the district. The new bar co-owned by Jason Steward, Nick Adams, Sean Fric, Troy Cramer and Benjamin Cantu will open at 96 Rainey St. Palace Laundry will offer a place to imbibe for daytime and nighttime traffic offering live music, happy hours and DJs.
“We feel really strongly about this concept,” Steward previously told the ABJ. “And the way Rainey Street is moving ... all the construction will be finished, and all the new people living on the street, we feel like Rainey 2.0 is going to be even stronger than the first round."
For those who have held on during the heavy construction phases, the payoff could finally come through. Though a lot of changes are happening on the street, there is still hope for the local business operators. Some of the businesses lost include Icenhauer's, Reina and Bungalow.
Dunlap is holding on. She owns some dirt in the district, and though she has funneled her savings into her bars — losing about $5 million in the past year and a half — she is hopeful.
The bar owner has also expanded her business outside of Rainey District, adding a Lustre Peal in South Austin, another in East Austin, one in Houston and spanning out of state into Portland and Denver.
“I feel like it will come back and it will be rejuvenated and there will be happiness and fun to be had again. It was just a matter of being able to hold on,” Dunlap said."
Source: Austin Business Journal
Written by: Sahar Chmais
Published: February 18, 2025
Posted by Grossman & Jones Group on
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