Whole Foods project 'on course'
Source: Austin American-Statesman
By R. Michelle Breyer

Whole Foods Market Inc. is moving forward with plans for its new downtown Austin headquarters and store, even as controversy swirls around city incentives for the developer, and the federal government eyes the site for a new court-house.

"With the economic impact of this project, particularly in these uncertain economic times, it makes all the sense in the world for the Whole Foods project to stay on course," said Jim Sud, executive vice president of growth and business development for the Austin-based natural foods grocery chain.

Sud said he expects the company to break ground in early spring on a 200,000-square-foot headquarters building and 80,000-square-foot grocery store at Sixth Street and Lamar Boulevard.

The latest version of the design includes an L-shaped office tower structure atop a one-story store with a rooftop garden, an outdoor amphitheater and 950 parking spaces -- more than double the number at the existing Whole Foods a block north.

HKS Inc., the Dallas-based architecture firm, has adjusted the plan based on feedback from the city, adding curves to make the facade more inviting and shrinking the office tower from seven stories to six.

The site plans have been submitted to the city and the building plans are nearly done. The store is scheduled to open in early 2005.

"We're way down the road with the building plans," said Brad Schlosser, a principal in Schlosser Development Corp., which has been trying to develop the site for nearly a decade.

Whole Foods' agreement earlier this year to become the major tenant breathed new life into a project that had stalled many times.

But the plans are taking shape against a contentious backdrop. Local activists say Schlosser's plans to add a Borders Books & Music store would threaten BookPeople and Waterloo Records, two nearby homegrown businesses. They've launched a protest against roughly $1.5 million in fee waivers the project could receive from the city, with a City Council vote expected early next year.

Last week Liveable City, a nonprofit group, released a study that it says shows that Waterloo Records and BookPeople are better for the local economy than a Borders would be.

Robin Rather, a director of Liveable City, has made it clear that Whole Foods is not the issue. She contends that Schlosser is leveraging the Whole Foods name to obtain incentives that would benefit the entire project, including the second phase, where Borders would be.

"This has nothing to do with Whole Foods and everything to do with the developers and their attempt to leverage one of the tenants for the benefit of them all," Rather said. "It's a fantastic blessing for Whole Foods to want to keep its world headquarters here."

Schlosser officials point out that the incentives are waived fees and infrastructure improvements -- not money going directly to their company or Whole Foods. They estimate that the project will pay an estimated $300,000 a year in property taxes. That is much more than what Whole Foods is paying now for its much smaller store and headquarters across the street.

"These incentives are for the Whole Foods project," said Gregory Kallenberg, creative director for Schlosser. "That's where the incentives will stay. None of the money will float to Borders.

"We as a city need to refocus on what this project is going to be," he said, "the Whole Foods corporate headquarters, an incredible store and an amazing destination for Austin."

The store will be the biggest by far of the company's 140 stores. Works by local artists will be displayed in the public spaces. "People mover" escalators will transport shoppers and their carts from the store to their cars. The block will include some additional retail and office space.

Executives of Schlosser and Whole Foods have been surprised at the intensity of the opposition to the incentives, especially since Whole Foods is a locally based company, like its two smaller neighbors. The grocery chain has 800 employees in Central Texas, and expects to add 500 jobs in the next five to seven years.

They're less concerned about the recent announcement that the General Services Administration has tagged their site as one of three possibilities for a new federal courthouse. The others are the Hoffbrau restaurant on West Sixth Street and the unfinished Intel Corp. building -- the site many downtown leaders say makes the most sense.

The government has the power of eminent domain, which would allow it to force the sale of the site. Sud, the Whole Foods vice president, notes that his company's plans have significantly raised the value of the site, meaning the government would have to pay more than it would for other locations.

"While I don't want to discount the importance of what the federal government is trying to do, I've got great confidence in the fact that our project is such a win all the way around for the city," he said. "I just feel that logic will prevail here. We're proceeding ahead and looking forward to breaking ground as soon as we can."

mbreyer@statesman.com; 445-3641

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