Austin has to commit funding for phase 2 of caps and stitches sooner than expected

AUSTIN, Texas – There has been a change in how fast the city has to commit funding for caps and stitches over I-35. The project will create real estate for parks and buildings over the highway. 

It’s split into five phases, and Austin City Council approved funding for the first part earlier this year. 

Austin’s cap and stitches project

The backstory:

The Mobility Committee met on Thursday to hear an updated timeline from Transportation and Public Works staff as to when they need to commit funding for the second phase. There was concern about how fast it was coming. 

In May, Council voted to fund roadway elements, the bottom part. They approved $104 million, which was a compromise. Some of that comes from a bank loan and some from a bond. 

The city is responsible for any cost overruns. 

The Texas Department of Transportation does the design and permitting for the project. It’s part of a larger expansion which will eliminate the upper and lower decks near the UT campus, lower the roadway, and add more lanes. 

Now, the timeline for committing funding for the next part, the decks, has moved up to May, instead of November. This will be included in a bid package that goes out in 2029. There’s so much lead time because TxDOT needs to know what to design. 

Transportation and Public Works briefed committee members. 

“The city must pay for all cost overruns over a very long period of time. We have estimated, at that time, a 25% contingency,” staff members told the committee. “Those costs that council approved for roadway elements that we presented, which amounted to $104 million, were based on a 30 percent design, based on very generic examples from other cities in the state of Texas prior to tariffs, prior to any of the current pricing markets.”

The city had hoped to get to 60 percent design of roadway elements before paying TxDOT, but that progress won’t be reached until 2027.

“The city’s risk profile has increased,” staff said.

Council Member Paige Ellis says this is concerning. 

“This puts the city in a very tough spot when we’re at a moment of having to make some very tough decisions about our own city budget and trying to make sure we’ve got the dollars available to accommodate all of this need. It’s not helpful to have our timelines moved up, and for us to be committing to funding when we’re only at 30 percent design,” she said.

What’s next:

Meanwhile, the two northern stitch alternatives have yet to be picked. Those will run from 41st Street to the Red Line. 

The city recently had open houses to look at options. The budget for those is $24 million, and they’re expected to pick the stitches this month. 

In February 2026, staff will present a financing plan for the decks and amenities.