On Thursday, December 12, the Austin City Council approved accepting a federal grant of more than $105 million to help create caps over I-35 between Cesar Chavez and Fourth streets, and approved taking out a $41 million loan for part of the project. They tabled $223 million in funding agreements with TxDOT and will discuss those in the spring.

As TxDOT's work to expand Interstate 35 through Central Austin is already underway, several entities are planning to build land plazas over the highway.

On Wednesday, the University of Texas System Board of Regents also approved $106 million for a project near campus. It involves building a series of caps over the highway between 15th Street and Dean Keeton Street to connect the campus with the other side of the interstate. UT System Board of Regents Chairman Kevin Eltife said it is 10 to 12 acres in front of the new medical complex.

"We believe this is so important because even though they won't be constructed for eight to 10 years," Eltife said, "real estate in front of the medical complex will be desperately needed in the future."

Construction on an MD Anderson Cancer Center and UT Austin Hospital at the UT Media Center is set to start in 2026.

"This gives us the opportunity to cap that area to monetize it in terms of creating revenue from future buildings and medical facilities," Eltife said.

TxDOT broke ground on the $4.5 billion I-35 Capital Express Central project in late October. Planned updates include the construction of two carpool lanes between U.S. 290 and State Highway 71, lowering the main lanes from Airport Boulevard to Lady Bird Lake to remove the interstate's upper decks, making room for the cap-and-stitch initiative that will add plazas above the interstate.

The U-T project is separate from the city project, which could create up to 30 acres of new public space in Central Austin between Holly Street and Airport Boulevard. TxDOT will build the foundation of the decks as it expands I-35, while the city will build what's on top.

In design renderings of what the caps could look like, the cap between Fourth and Seventh streets could see an elevated walkway and outdoor dining space. Another design shows a cap between Cesar Chavez and Fourth streets, and the plan includes a "street promenade" and bike path.

Brianna Frey, who is managing the project for the city, said it will bring new parks, shops and entertainment to Central Austin.

"I think the public is interested in seeing some of those benefits too as it relates to either their business districts or their neighborhoods or where they like to go hang out with their families, or potentially in the future could see themselves hanging out with their families," Frey said.

Austin City Council's plans
Thursday's city council meeting was supposed to be the deadline for council members to decide whether to spend hundreds of millions on the project. The agenda initially contained two items: one for $19 million in design funding and a second item for $265 million in funding for the roadway elements for the caps.

However, in a memo on December 5, City Manager T.C. Broadnax withdrew the items because TxDOT extended the deadline. The memo cited delays in TxDOT's pump station contract award. The deadline has been extended to March 2025, and city staff intend to bring it up at a different city council meeting this spring.

While there was no vote scheduled on those big ticket items on Thursday, the city council did vote on the $41 million state infrastructure bank loan, which Frey said will help cover TxDOT design fees. Those fees could range from $8 million to $19 million, depending on which caps move forward into design. Part of it will also go to the Neighborhood Access and Equity Grant, which the city has to match.

They will also formally accept $105 million from the federal government for the section between Cedar Chavez and Fourth streets. That funding will require a $45 million match from the city. So far, that is the only cap to get funding and is the only cap scheduled for construction. Other caps can be added if the city secures financing.

The price tag for the full build of the project has ballooned to nearly $1.4 billion. It has increased by 50 percent to 80 percent due to building material costs and adjustments as crews have advanced the design and further fleshed out the elements.

"A lot of that has to do with the fact that some of these caps are going to create a tunnel-like system that needs to be supported by more voltage in electricity. There will need to be a lot more fire, life, and safety components that just weren't in the design at the schematic level," Frey said. "These are new added elements that they've priced out for us that we previously hadn't received yet."

With the cost estimates as they are, the city is evaluating plans to move forward with only some of the caps.

--

Read the full story and watch the video at KVUE.com.