Many residents find the plans unconscionable, saying they would alter the city's landscape and the history that Austin and the university have built together.
The proposals have spurred protests from Grammy winners, golf pros, thousands of petition signers and the City Council.
At its heart is the banal cause of so many strained relationships: money.
The state, facing its own budgeting catastrophe, already has told UT to cut $29 million over the next 18 months. UT is slashing 200 positions and fears losing ground in the competitive world of top-tier universities. One of the biggest, and most divisive, proposals is to sell or lease the land called the Brackenridge Tract, home of an idyllic public golf course. Preliminary plans would add retail and 9,000 residents on prime property near downtown but congest an area of established neighborhoods.
August W. Harris III, a financial consultant and chamber of commerce leader, recognizes the land's value. But not in the same way UT does.
"What would Dallas be without White Rock Lake?" he asked. "Austin is a fast-growing city, and the opportunities for urban green space are critical to maintain because once they're gone, they're gone forever."
He and others believe that what UT might gain upfront would be offset by the loss of long-term relations, including some disgruntled donors.
UT President William Powers said the Brackenridge Tract is a valuable piece of land, and the Legislature has ordered regents throughout the state to examine universities' assets.
"The board does have a fiduciary obligation to think through what its obligations are," Powers said. "For them not to do it actually would be something that would be inappropriate."
He said the persistent recession and cutbacks by the state have presented the university with some of its biggest financial hurdles in decades.
"These are challenging budgetary times. We'll be working through these for a time to come," Powers said.
He pledged that UT would continue to work with the Austin community, and the university announced a change Wednesday that would keep the beloved music venue, the Cactus Cafe, operating. Even with strong opposition to changing programs and land use, Powers said, the marriage of city and campus would endure. But if altering music and informal classes has been a bump, development of the Brackenridge Tract is a full-blown fight over contentious issues such as zoning, clean drinking water and Austin's struggle to preserve its sense of community.
The large swath of land west of downtown was donated to the university in 1910 by long-serving UT regent George Brackenridge, who wanted it used to further education.
By 1928, much of the tract was converted into Lions Municipal Golf Course. Other portions are used for a biological lab, graduate student housing and some 90 acres south of the river was sold for residential development.
Lease agreements with the city and commercial interests earns UT about $1 million a year. University officials have declined to say how much UT stands to gain by redeveloping the land.
The lines of city leaders at numerous public hearings attest to the feeling that "Muny," as it's called, is not just any 18-hole course. Ben Hogan once said it sported the best par 4 hole he'd played on a public course.
It was the first public course in the South to be integrated in 1951, and it's the most popular course in the city, hosting 70,000 rounds of golf a year.
"Yes, I am an Austinite who laments each situation like the one Muny now faces," pro golfer Ben Crenshaw wrote. "Each time we lose one of these places, we lose a bit of our identity as a community. Let's not rip the heart and soul out of west Austin."
Travis County Judge Sam Biscoe recounted that as a child, he worked as a caddy at various courses. But Muny was the first place he could play a round of golf as a black man. "For many of us, it has huge historical significance," he said.
"This goes beyond golf," said Peter Barbour, founder of Save Muny. "It's historic and iconic land."
The city lease for the land expires in 2019, but either UT or the city can break the arrangement with six months' notice. The UT System has spent $5 million for master plans of the site, a step not taken lightly.
State Sen. Kirk Watson, a former Austin mayor who counts both the university and the city as constituents, said the two have always been intertwined. Austin is a unique place where great, vibrant thinkers want to come, and the university is an "economic tool that just hums," Watson said.
The Democrat blames the state for not providing enough higher-education funding.
"The state leadership over the past decade has put great institutions such as the University of Texas in harm's way," he said.
A highly skilled and educated workforce is the future of the state, and part of what people seek when looking at colleges whether to attend or teach at is the surrounding community. "That includes public golf courses and music venues," Watson said.
The Cactus Cafe, part of the Student Union, is an intimate 150-seat room with great acoustics that has attracted musical talent on their way to record deals and arena concerts. On Wednesday, the university announced it would keep the venue open but end its independent management so that public radio station KUT-FM can operate it in conjunction with student-based programming. The Cactus had been losing about $33,000 a year.
Wiley Koepp, a musician and co-founder of Save the Cactus Cafe, said he raised that much on his website in 10 days.
The closure plans were a "PR flop," Koepp said, adding that UT "doesn't have any understanding of what an international gem they have."
For artists such as Sara Hickman, the Cactus Cafe is home.
"I will always feel a pinch of nervousness mingled with enthusiasm when I have an impending Cactus show it's a sacred space, a place to share my songs, my words, my thoughts, my self," she said.
Powers said the Cactus change is evidence that UT hears the community's concerns, and he said the decision on informal classes will be revisited.
"With all that's going on, there are thousands and thousands of Texans and Austinites on our campus at art events, lectures, participating in UT activities and athletics," he said. "The good far outweighs these particular controversies."