Caps have been capped
Austin loses $105M in federal funds for I-35 cap-and-stitch project
Council members are considering visitor and car rental taxes, or a state loan, to replace the funds
Millions of dollars in federal funding for a major project in Austin are now off the table.
According to city memos, the city of Austin learned Wednesday, August 6, that Austin will no longer get $105 million in Neighborhood Access and Equity (NAE) Grant funding for the Interstate 35 cap-and-stitch project.
The caps were meant to connect East Austin and Downtown Austin with parks and other spaces over the roadway. The caps were set to run from Cesar Chavez Street to Fourth Street, Fourth Street to Seventh Street, and 11th Street to 12th Street, and would have also included two pedestrian bridges to be installed near 41st Street to connect to CapMetro's Red Line rail.
The city says the funds were part of a grant program that was cut in the "One Big Beautiful Bill" that was signed by President Donald Trump last month.
But city leaders knew that grant funding was on the chopping block and had different ideas on how to pay for it.
In May, the city council approved a proposal that committed $104 million for four sections of caps and stitches.
"We also passed a resolution that asked staff to go look at some of these alternative funding options," Councilmember Ryan Alter said.
Alter said the intention is not to pay for this project through property taxes or local taxpayers. Instead, council members are considering visitor and car rental taxes, or a state loan.
Alter said he does not envision the city paying for the entire project, and expects the city could also bring in money from private philanthropy.
"As TxDOT told us, we don't need to come up with additional funding until 2029," Alter said.
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