Austin’s Iconic Late-Night Diner Stars Cafe Faces Potential Closure Amid I-35 Expansion Plans

Austin’s Late-Night Gem Faces Uncertain Future

Austin’s dining scene is well known for its variety and accessibility, especially for those out and about after hours. However, one beloved establishment, Stars Cafe, is facing an uncertain future due to the expansion of I-35, which may result in the restaurant having to move or close entirely after more than 58 years at its current location.

An Unsurpassed Legacy

Located at 3101 N. I-35 frontage road, Stars Cafe has built a reputation as “Austin’s original 24-hour diner.” It has been a favorite haunt for late-night revelers longing for a quality cheeseburger or some huevos rancheros, available at all hours. Co-owners Deitrich Armstrong and AJ Johnson, both former DJs in Austin’s entertainment district, bought the cafe out of bankruptcy proceedings in 2022 in an effort to preserve it for other late-night diners.

“It was one of the few places that you could go … for good food and a pretty decent price downtown that was open 24 hours,” said Armstrong, reminiscing about his years as a patron of the diner. “So when we saw the place was up for sale, we just kind of wanted to come in and save it.”

A Looming Displacement

Unfortunately, the cafe’s time at its current spot may be cut short. The I-35 Capital Express project aims to expand the highway by adding more lanes, and while the exact timeline for this construction remains uncertain, it is expected to begin in mid-2027. The Texas Department of Transportation (TxDOT) has indicated that planning and acquisitions for affected properties, including Stars Cafe, are underway.

“We were warned the same way we were warned 15 years ago” about potential highway expansion, Armstrong explained. Despite being aware of this risk when they purchased the cafe, he remained hopeful about its future. Yet with construction activity intensifying around the area, the reality of the situation is beginning to sink in.

The Quest for a New Space

As they brace for change, Armstrong and Johnson are actively searching for a new location where Stars Cafe can continue its legacy. They prefer to stay close to downtown Austin, hoping to retain their loyal customer base who may be deterred by a move to the outskirts. However, the high costs of commercial real estate, especially in this bustling area, complicate their search for a “tenant-friendly” space.

Compounding their challenges is the fact that they cannot move until their current lease expires in 2028—or until TxDOT acquires the property. “We’re constantly just putting in the hours of just looking at new properties, but we have to wait,” Armstrong said, revealing the restaurant’s rent is currently unknown, though rates in the area average $24.75 per square foot.

Stars Cafe at a Glance

Since the ownership change, Stars Cafe has seen a renaissance of sorts. Once generating less than $100,000 a year with only three employees, it now boasts a staff of 22 and generates around $1 million in annual revenue. Though the café has reestablished its 24/7 operating hours, menu prices remain remarkably low, with offerings like the $3.75 breakfast sandwich, named “The Charlie” after a regular who has dined there since 1997.

Community Impact

Over the years, Stars Cafe has become more than just a late-night dining spot; it symbolizes an era of Austin’s unique charm and quirkiness. As Armstrong points out, “I see the kind of chicness that it’s going for, but I don’t think (Stars Cafe) right now represents where new Austin is going.”

The future is uncertain, but Armstrong remains focused on the present, doing what they can to provide a much-needed resource in the heart of the city. “We’re here to be an eatery for everyone in the downtown area,” he added, recognizing the importance of their establishment in a changing landscape.

A Call for Community Support

As the city of Austin continues to evolve rapidly, supporting local businesses like Stars Cafe becomes increasingly vital. The cafe’s journey reflects a broader narrative of community ties and the impact of urban changes that can threaten beloved establishments. While Stars Cafe prepares for what lies ahead, their commitment to staying part of Austin’s vibrant late-night culture remains clear.