The sale of a 58-unit condo project overlooking Lady Bird Lake is now final, paving the way for more high-rise residential development in the Rainey Street area on downtown Austin’s eastern edge.

More than 80 percent of the owners of the decades-old Villas on Town Lake condominiums — the statutory requirement for a sale to occur — agreed to sell their units at the 2.3-acre waterfront property, which is tucked at the foot of Red River Street adjacent to the hike-and-bike trail.

The sale closed June 30. The share of proceeds to the 54 owners was determined by individual unit appraisals. Owners must be out no later than the end of this year.

Dallas-based Genesis Real Estate Group is the new owner of the Villas property at 80 Red River St. Two apartment towers are in store for the site, Gordon Ip, president of Genesis, told the American-Statesman in an exclusive interview.

"We’re excited to be in Austin," Ip said. "This is a great property. I’ve been looking at sites in Austin a long, long time — at least three years — but there are very few sites" that weren’t already spoken for, or that had development restrictions to protect views of the Capitol.

Preliminary plans for the first phase call for a tower of about 40 stories with approximately 400 apartments, Ip said. A second tower would be timed to market demand, Ip said.

Genesis will be required to get a site plan approved by the city of Austin before starting construction. Ip estimated it could be sometime next year before the project breaks ground. The cost of the project has not been determined, and Genesis will have to obtain construction financing.

Founded in 1987, Genesis has developed high-profile towers in cities including Houston; San Francisco; Long Beach, Calif; and Dallas, where it is building the Katy, a 30-story, 463-unit high-rise in Victory Park.

Genesis bought the Villas property from the Sutton Co., based in Austin, for an undisclosed amount. Sutton had the property under contract last year for $50.8 million.

Sutton previously had teamed with Dallas-based Koa Partners on a proposed project to build two high-rise towers on the site, including one of up to 60 stories, which if built could have become Austin’s tallest building to date.

Sutton Co. and Koa Partners are no longer the developers, but retain a partnership interest, Ip said. Sutton Co. also owns nearby land on Waller Creek where it plans more high-rise development.

Ip said Genesis has "no desire" to build the tallest building in Austin, nor does it aspire to be "the hippest property."

"We want to respect what’s around us, which is Waller Creek and Lady Bird Lake," Ip said. "We want to do something that’s respectful and appropriate and allows residents to enjoy access to Lady Bird Lake."

Under entitlements obtained by Sutton Co., the site has city of Austin approvals to build a project with as much as 1.5 million square of space, although Ip said Genesis does not plan to build the maximum square footage allowed.

The first phase would likely have about 400,000 square feet of space, not including parking, Ip said.

After meeting last fall with Sutton partners Mac Pike and Wally Scott and KOA Partners, "we were able to convince them we were the right people for them to let go of the property. Sutton did lot of work to get it to this point. Now the baton is passed, and we’re going to take it to the finish."

In late 2015, amid a booming real estate market, local broker Robert Knight began soliciting offers for the Villas site on the owners’ behalf. The site is one of the last downtown tracts available for development on the north side of Lady Bird Lake between Interstate 35 and North Lamar Boulevard.

Several Villas residents contacted by the Statesman declined to say how much money they received for their units, although they said it was more than they would have made had they put them on the open market.

In 2016, Sutton Co. offered owners of two-bedroom units about $925,000 to $930,000, while owners of one-bedroom units stood to net just under $500,000. A subsequent lawsuit resulted in the share of proceeds being recalculated, and ultimately distributed, based on individual unit appraisals rather than each resident’s percentage of ownership in the condo project.

After the new appraisals, owners said some residents received less and some got more than under the earlier calculation.

One resident, Michael Abraham, said $3.5 million in value was shifted from predominantly two-bedroom owners to one-bedroom owners.

Abraham said he received about $925,000 — about $50,000 less than his previous estimated payout, he said.

Owners interviewed by the Statesman said they had mixed feelings about leaving a condo project where they formed a close-knit community through the decades.

But Old Austin bumped against New Austin when a surge of development washed over the Rainey Street area in the past dozen or so years, bringing with it bars, nightlife and high-rise residential and hotel development — and traffic bottlenecks that some Villas homeowners said often made it nearly impossible to access their units.

"It’s a struggle just to go a block to get to my house," said Villas resident Phyllis Fletcher, a fixture on her daily walks on the hike-and-bike trail.

Abraham said Villas owners "have been dealing with this sale two to three years now, and most are willing to let go and move on. They realize the neighborhood has changed."

Lora Herring, a Villas resident and a real estate agent with Berkshire Hathaway, echoed that feeling.

"I would say everyone is just really happy it’s over with," Herring said. "Whether they were pleased with the amount they got, I think they’re happy the whole process is over."

While the money owners received might seem like a lot of money to some people, Herring said other downtown condo projects are much pricier, "and unless someone’s going to move to somewhere in a much less expensive area, I don’t know that anyone really netted a big wad of cash," Herring said, adding that "a lot of people are getting socked with hefty capital gains taxes."

After calling Villas on Town Lake home for 30 years, Fletcher said: "I’m going to miss it. I love being here. Sometimes it’s just time to move on."