St. Edward's University plans restaurant at former El Gallo site

St. Edward's University is getting into the restaurant business.

The Austin Catholic liberal arts school purchased the former site of El Gallo restaurant at 2910 S. Congress Ave. -- directly across the street from the main campus entrance -- about 18 months ago.

At the time, St. Edward's officials said the one-acre property would likely be redeveloped to include residential development with commercial space. But for now, the university has hired CBRE, a commercial real estate and investment firm, to lease the site as a restaurant.

El Gallo, a family-run Tex-Mex restaurant, closed its doors in January 2017 after 60 years of business.

"The university received advice from our real estate broker that a restaurant on that site would be a sound decision," said Sandra Zaragoza, St. Edward's University communications manager. "As far as housing, with the opening of our newest residence hall, we are now able to provide housing for about half of our student body. We are not presently looking to add more housing on this site."

The property has 6,759 square feet of restaurant space and 1,469 square feet of attached patio space, along with on-site parking, according to CBRE.

Eric Dejernett, senior vice president with CBRE, said the property is part of a new wave of development on South Congress in the Oltorf Street area.

Grocery chain H-E-B purchased the Twin Oaks Shopping Center, a 10-acre property at South Congress Avenue and Oltorf Street, three years ago. The San Antonio-based company has not yet announced a redevelopment plan for the property, which has only a few remaining tenants.

Meanwhile, a boutique hotel called the Colton House is under construction at 2510 S. Congress Ave., just south of Olforf. Amenities at the 90,000-square-foot, three-story hotel will include a swimming pool, rooftop space, coffee bar, library and an outdoor lawn for weddings and other events.

"Riverside Drive to Oltorf has just exploded with activity and development, and we feel like this is a continuation of that," Dejernett said. "There's a demand for quality services and retail in this area and we're thinking there will be a lot of interest."

Dejernett said a restaurant makes the most sense for the former El Gallo property considering that St. Edward's doesn't currently have a redevelopment plan.

"If they're holding onto it as an investment, at the end of the day, the numbers are pretty compelling to put in another restaurant that services the St. Edward's community and the neighborhood community, just like El Gallo did," he said.

The property is the first that St. Edward's has purchased in the past 10 years, Zaragoza said. St. Edward's has about 4,600 students at its 160-acre campus, where it offers undergraduate and graduate programs, including MBA programs and a master's degree in counseling.

The university could make additional purchases in the future, Zaragoza said. "Certainly, presented with the right opportunities we would consider properties for future uses," she said. "However, we are not actively looking to acquire properties."