In this week's issue:

  • Austin's $7.1 billion transit project just got stabbed in the back by Texas's own senator — and the plan has been cut in half since voters approved it
  • A $27M foreclosure auction on a prime downtown IHOP parcel that may be the most valuable undeveloped land in the entire city
  • Michael and Susan Dell just became UT Austin's first billion-dollar donors — with an AI-native hospital to prove it
  • Tesla robotaxis are no longer just an Austin thing

Let's ride.

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Top Stories

Feature #1

Cornyn Kills Project Connect's Federal Lifeline

Austin voters approved a 20% property tax increase in November 2020 to fund Project Connect — at the time, a sweeping light rail vision covering as many as 20.2 miles of track. What they're actually getting is 9.8 miles, 15 stations, and a Phase 1 that's already been stripped of its airport connection, its underground downtown segment, and a full east Austin line serving the people most dependent on transit. The price tag, remarkably, has stayed pinned at $7.1 billion — same number, half the project. The Austin Transit Partnership (ATP) is now asking the federal government to cover more than half that cost: roughly $4 billion from the FTA's Capital Investment Grant program. That's a significant ask for a project that already looks like a bait-and-switch, and it just lost the support of the state's most powerful senator.

Senator John Cornyn told KLBJ-AM's "Todd and Oz Show" on April 16 — bluntly and without hedging — that he does not support federal funding for Austin Light Rail. "Austin is the blueberry in the tomato soup," Cornyn said, "and obviously the City Council has run amok and needs to be reined in, and maybe this is just the latest example. We don't need this sort of project along with the profligate spending." Cornyn's opposition is politically potent: if he actively lobbies against the CIG grant, ATP's entire financing model collapses. The FTA rated the project "medium-high" in November and approved its environmental review in January, but those milestones become meaningless if Congress and the administration aren't on board. ATP's official response was bureaucratic boilerplate — "Austin Light Rail was overwhelmingly approved by voters and is rapidly advancing through a competitive federal funding process" — with no comment on contingency plans if the federal money doesn't materialize. Contractors Kiewit and Austin Rail Constructors have already been hired, and a $3 billion design-build contract is active. The machinery is in motion. The money is not.

The political context makes this worse. Cornyn is facing AG Ken Paxton in a May primary runoff, and Paxton has separately challenged Project Connect's local funding mechanism at the Texas Supreme Court, arguing it's unconstitutional. Both candidates have reason to torch the project for electoral gain. Meanwhile, ATP handed its critics a loaded weapon last week when it tried to approve a $47 million downtown office lease — $32M in rent plus $15M in renovations — before Mayor Kirk Watson publicly called the move "inappropriate" and forced a retreat. The optics of an agency trying to lock in a luxury office while asking taxpayers for billions in federal subsidies couldn't be worse. On X, @MrScottHendrix put it plainly: "This is in contention for the award as the biggest municipal bait & switch scheme ever foisted upon city taxpayers in U.S. history." That may be hyperbole. But it's also not entirely wrong.

Sources: Cornyn opposes Project Connect federal funding — Austin American-Statesman, ATP halts $47M office plan after mayoral pushback — Austin American-Statesman, Scott Hendrix on X: "biggest municipal bait & switch scheme", Jen Robichaux on X: Cornyn KLBJ statement

Upcoming Events

  • Austin Psych Fest 2026. May 8-10 at The Far Out Lounge, 8504 S. Congress Ave — The Flaming Lips, Thee Sacred Souls, and The Black Angels headline; three-day passes from $92.
  • Bob Dylan at Waterloo Park. June 29 at Moody Amphitheater, with Lucinda Williams and the John Doe Folk Trio — tickets on sale now.
  • BookSpring Fest. May 2, noon–5pm, free — 1807 W. Slaughter Lane; Austin's 4th annual free reading festival featuring 30 community leaders, Mayor Kirk Watson, and youth literacy advocate Orion Jean.
  • Soul 2 Sole International Tap Festival. June 19-20 at the Long Center — Tapestry Dance Company's celebrated festival, this year marking its final run.
  • Dripping Springs Fair and Rodeo. May 22-24 at 1042 Event Center Drive, Dripping Springs — bull riding, bronc riding, steer wrestling, and mutton busting; $15-20 adults.
  • City of Austin Urban Core Open Houses. Public input sessions on the Central City District Plan covering downtown, the UT area, and the South Central Waterfront — check austintexas.gov for dates and locations.

Feature #2

Nate Paul's Rainey Street: $27M Foreclosure Ends a Six-Year Legal Circus

On May 5, a property that currently hosts an IHOP, a parking lot, and some grass will go to auction on the west steps of the Travis County Courthouse. The address is 707 E. Cesar Chavez St. — off Rainey Street, surrounded on nearly every side by the luxury high-rise corridor that Austin's development boom has built over the past decade. It's appraised at $27 million. The debt owed is just over $5 million on an original loan of $2.7 million — meaning the land has appreciated roughly ten times since Natin "Nate" Paul's company World Class Holdings first acquired it. The foreclosing entity, Cesar Rainey Street LLC, purchased 99% of that debt from the original lender and can credit-bid the $5M to take ownership outright. Or it could face a cash bidder who believes, correctly, that this is among the most developable urban parcels in Texas.

Nate Paul was once one of Austin's most prominent young developers — a fast-rising figure in downtown real estate who acquired properties for future sale and development through World Class Holdings. The last several years have been a slow and systematic unraveling. In January 2025, Paul pleaded guilty to one count of making false statements to a lending institution; the DOJ dropped 11 other charges. He separately faces a contempt hearing that could result in jail time for allegedly hiding documents in another case. Two other Paul properties — at Galleria Oaks and Ben White Boulevard — have also recently been put through foreclosure. This is what the end of an overleveraged empire looks like: not a dramatic collapse but a methodical asset-by-asset extraction.

Paul fought this specific foreclosure for six years — four temporary restraining orders, multiple emergency relief applications, injunction requests, Texas Supreme Court appeals, and federal bankruptcy filings, all of which ultimately failed. The Texas Supreme Court denied the delays. A federal judge ruled the bankruptcy was filed in bad faith. His attorney Ron Satija called it "possibly the most valuable piece of undeveloped property in Austin," which is probably right. What matters now isn't who lost it — it's what gets built on it. The Rainey Street corridor is already one of the most densely developing blocks in the city. Whoever walks out of that courthouse auction with the title is going to build something tall.

Sources: Foreclosure looms for Rainey Street site tied to Nate Paul — Austin American-Statesman

Weird Austin

The Exit

One More Thing

Project Connect is half the project voters approved, costs the same $7.1 billion, and just lost its most powerful federal ally. A prime downtown block that's been tied up in Nate Paul's legal circus for six years is finally going to auction — and someone's about to build something on it. This city keeps moving.

If this issue earned a few minutes of your morning:

  • Forward it to one Austinite who should be reading it
  • Reply with your take — especially on Project Connect
  • Share it on X or wherever you actually live online

Thanks for reading. Stay sharp, Texas.

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