I interned at the Statesman in college (a long time ago) and I'm familiar with the area. While it is close to downtown but separated by the river, I think the area is best served by building residential with retail. Big arenas should be geographically near downtowns generally, but I think east of 35 might be a better location, with a rail transit station next to it. Like where it say E. Riverside on this map.
Sorry it's so big. Is there code I could add to post it at 30% or so?
http://centralaustincdc.org/images/1...ment_rev01.jpg