Great Crossfire.
On the new arena, I do agree it's gonna be a lakefront arena or somewhere else downtown. The city of Austin obviously has gotten a lot bigger since the Frank Erwin Center was built. And like you said, the new medical school plans that if approved would be tearing down the FEC. It's makes sense for the city to build a multi purpose arena to attract more conventions.
However, it will affect basketball atmosphere. Ohio State is a very comparable university and metro area. They have their own relatively new on campus arena (opened in 1998) and a downtown arena (opened in 2000). They also have a major tenant in each of them. I don't think Austin would have two big arenas in the city. The NBA wouldn't put a team in Austin with San Antonio an hour away. The NHL wouldn't expand to the Southwest and the Texas Stars are in Cedar Park. So the main tenant would be the Texas Longhorns. The campus and downtown are right on top of each other. When they end up building a new arena, which they will, the University is going to have to be actively involve and make sure the arena is near enough to campus so students can get there.
Yeah, the Drum is still going to be there for a few years yet. It has been said that it could be anywhere from four to fifteen years before the land that the Drum occupies is required by the Medical School Complex. I would not put it past the University to try to do their own thing, and that might end up being the best solution for basketball. However, I read that the property owners that own the land where the state offices are next to the Austin American Statesman,want that land and the American Statesman land to be a part of something big for the future of the downtown area. Also, don't forget that those parcels of land are the largest pieces of developable land that could be put together for a large development project adjacent to the downtown area. Of course, that does not include the Brackenridge tract which is not adjacent to downtown and any mixed use venue would be pretty far from downtown.
Also, don't forget that the City has been asked to consider what would be necessary to house a national political convention which would need a capacity of 25,000 or more. Placing a mixed use venue on the Austin American Statesman land and having the land currently occupied by State office buildings would create a lot of synergy around the lake with the University, the medical center corridor, the soon to be re-development of the Waller Creek Corridor which will include something akin to the San Antonio River Walk, and the Convention Center District all being tied together by by street trolleys and/or light rail. From an urban design standpoint, it probably makes too much sense to ask, the City, the University, and the State to work together for the common good. And, then again, some might question whether such a facility would really represent the common good at all.
Don't forget that they are also taking a look at what might come from covering all or part of the sunken part of I-35. It just seems to me that there are a whole lot of people that have an interest in having a say in what downtown Austin will look like in 50-60 years, so I would not be a bit surprised to see a basketball facility get wrapped up in some part of all the urban design schemes that seem to be floating around. I am also not convinced that a multi-purpose facility could not be designed that payed proper respect to a basketball arena function. Contrary to what people think, it could be done with enough money, and there are going to be a whole lot of bucks involved in downtown projects over the next few decades.
Again, I am not saying that such a scenario is the best solution for anything, I am just saying that there is a whole lot of momentum from several directions that could come together to make some surprising things happen ...or not. That is what makes the discussion interesting.