AUSTIN — The Texas Department of Transportation is warning the City of Austin that it must approve a proposed funding agreement for a $25 million boardwalk along Lady Bird Lake — or risk losing the project entirely.
The boardwalk would replace a narrow section of the Ann and Roy Butler Hike and Bike Trail in front of the Hyatt Regency, between South First Street and South Congress Avenue. The area often floods during rain, creating congestion along the popular trail.
In a Feb. 5 letter to Mayor Kirk Watson, TxDOT said it will remove the boardwalk from the environmental approval for the I-35 expansion if City Council declines the advanced funding agreement.
The boardwalk was introduced in 2023 as part of mitigation efforts tied to the $4.5 billion I-35 Capital Express Central project, which is already under construction. Federal law requires agencies to offset parkland impacts from highway expansions.
Unlike other required mitigation funds already accepted by the city, TxDOT classifies the boardwalk as optional.
The proposal has also sparked debate over transparency and oversight, with questions about the role of nonprofit partners in managing public parkland. City Council approval would be required before any construction moves forward.