A major Austin employer is in the midst of a nearly $900 million project that will bring more than 3,000 additional workers into the heart of downtown.

But it's not Google, Apple, Indeed or some other high-tech heavyweight behind the huge initiative; it's state government.

Hundreds of millions of dollars in taxpayer-backed bonds have been authorized by state lawmakers to fund an ongoing effort to transform the four blocks of Congress Avenue immediately north of the Capitol.

The $895 million development — counting $313.7 million for phase two approved during the just-ended legislative session and $581.2 million for phase one approved in 2015 — will include 1.5 million square feet of space in four new state buildings, below-ground parking and a pedestrian-friendly promenade for public gatherings and festivals that will stretch from Martin Luther King Jr. Boulevard to 15th Street.

The main goal is to consolidate some of the thousands of state employees who work in rented offices throughout Austin into state-owned buildings in the new Capitol complex. Officials say the plan will save an estimated $25 million annually on leases once the two phases are complete, while also helping insulate taxpayers from the sting of rising rents amid Austin's booming market for office space.

'A glorious thing'

An additional aim is to remake the region just north of the Capitol into an inviting public destination, with attractions that include the so-called "Texas mall" promenade and a cultural venue to accommodate live music and other activities.

"When this is done, and done right, it will be a jewel in our downtown," said state Sen. Kirk Watson, D-Austin. "It is going to be a glorious thing — a true gathering place, à la the National Mall" in Washington.

Phase one construction began last year and is expected to be finished in May 2022. Construction on phase two is forecast to start in late 2022 and finish in July 2025. A final phase, which would add a couple of additional state office buildings, is on the drawing board, although it hasn't been approved and a price tag hasn't been estimated.

Still, completion of the first two phases of the project will mean bringing thousands more workers into downtown — a region with severe congestion already — because the bulk of Austin office space currently leased by the state is outside the central business district.

The effort also is a major undertaking by the Texas Facilities Commission, the state agency overseeing the construction, barely 18 months after upheaval in its executive ranks. Harvey Hilderbran, who had been executive director, was fired by the commission's board in January 2018 after a report in the Texas Tribune documenting internal dysfunction under his leadership, and a number of Hilderbran's lieutenants subsequently departed.

The Capitol complex isn't the only big state project underway in Austin that's being managed by the Facilities Commission. The agency is overseeing a whopping $1.24 billion in new state construction in Austin scheduled to be completed over the next six years, including the $895 million Capitol complex and a $348 million project in North Austin that will result in a new headquarters campus for the state's Health and Human Services Commission.

State lawmakers approved the issuance of $161.3 million in taxpayer-backed bonds for the North Austin project during the legislative session that ended in May, on top of $186.4 million approved in 2015. The plans for the campus, at 4601 W. Guadalupe St., across from the Triangle mixed-use development, call for a total of about 708,000 square feet in two state buildings, as well as parking garages.

Watson said the sheer magnitude of the projects, and the amount of state tax money being spent on them, will require lawmakers to keep a close watch. But both he and state Rep. Donna Howard, D-Austin, said the new leadership at the Facilities Commission appears up to the tasks.

"Things are moving forward within budget and within the appropriate time frame," Howard said of the work on the Capitol complex. “There's a sense that with the new administration (at the Facilities Commission) and those involved with the project, that we have people who have experience in this field and know what they are doing. There hasn't been any kind of red flag."

William Allensworth, a retired attorney and former University of Texas adjunct professor of construction law, was named chairman of the Facilities Commission this year, after Gov. Greg Abbott appointed him to its board in January 2018. In addition, the board hired construction industry veteran and former Facilities Commission board member Mike Novak as executive director last November, replacing Hilderbran, who had been a longtime state representative.

"I think we are past the turmoil that was associated with ousting the former leadership," Allensworth told the American-Statesman recently, calling morale at the agency solid in the wake of the management shakeup 18 months ago.

He said progress on the Capitol complex is on track and the project is shaping up "to play a nice role in the urban fabric of the area," although he also noted that unforeseen — albeit surmountable — issues are likely to arise during construction, given the size of the effort.

“So far, it has gone very well," Allensworth said. But "it’s going to be tedious (for the public) while people are waiting for it to get done. And it's a huge project, so there inevitably will be disputes. You can’t get through a project this big without people getting mad about something.”

Traffic issues

One potential anger-inducing element — increased downtown traffic — won't manifest itself until the project is finished.

Combined, the new state office buildings in the first two phases of the Capitol complex are expected to house about 4,700 workers. Many of the estimated 1,400 employees who work in the state's William P. Hobby office building downtown — which the state plans to sell — are likely to wind up in the new complex, but most of the remainder are expected to come from outside the city's core. That means up to 3,300 additional state workers could be heading downtown, although the specific agencies to be moved haven't been determined.

State officials acknowledge the new office buildings could exacerbate traffic congestion but say they're working on plans to mitigate the impact. As part of the efforts, they've met with local transit officials about the possibility of additional service, and they are considering programs to encourage carpooling or provide employee subsidies for mass transit passes.

"It's a problem," Allensworth said. "We are adding to the count of people coming downtown."

Still, the 3,000-plus new state employees in the area once the first two phases are finished equates to a relatively small percentage of the estimated 115,000 private- and public-sector employees who already work downtown. In addition, the figure is expected to grow sharply anyway — so the state employees won't deserve all of the blame for future traffic jams.

According to the Downtown Austin Alliance, the number of downtown workers will climb by an average of about 2,000 each year over the next decade, reaching 135,000 in 2029. The estimate includes anticipated growth in state employment.

The downtown alliance, an organization representing commercial property owners that advocates for the region, supports the state's plans, saying the benefits — including more state involvement in mobility solutions — far outweigh the drawbacks.

"The project looks beautiful, and we are excited about what it is going to do for the north half of downtown," said Casey Johnson Burack, general counsel and vice president of government relations for the alliance. "It is going to bring a lot of life to that whole area."

As for traffic congestion, the state "has been really proactive" in trying to mitigate it, Burack said. “Everybody is realizing that we all have to roll up our sleeves and work together" on the issue.