City Council votes to apply for state loan to help fund Interstate 35 "Cap & Stitch" projects

AUSTIN (Talk1370.com) -- Austin city leaders continued Thursday in their quest to come up with hundreds of millions of dollars to fund an effort to cap and stitch parts of Interstate 35 through the central part of the city.

Council voted Thursday to apply for a $191 million loan through TxDOT's State Infrastructure Bank to help fund its "Our Future 35" project. Those funds, along with $105 million in federal grants from the U.S. Department of Transportation, will help to fund nearly $870 million in estimated development and construction costs.

Under the current plan, Austin would build a total of 10 stitches and caps, stretching from Holly Street north to Airport Boulevard and creating more than 27 acres of space. The largest cap would stretch from Cesar Chavez to 7th Street, with another large stretch from 38 1/2 Street north to Airport Boulevard.

The University of Texas is also planning to build three caps of its own along its campus frontage.

The TxDOT loan works similar to bonds issued by the city; funds would be repaid by the city over a period of 20 years at an interest rate of 3.75%, meaning the funds would carry an interest cost of about $84 million.

City staffers are looking at a variety of funding sources to help bridge the gap towards the $870 million total. One of those sources will very likely be a bond election for Austin voters, which could take place in November 2026.

Staffers are also looking at public-private partnerships, donations and naming rights deals, leasing options, civic fees, and tax increment financing options.