A South Austin address long synonymous with Tex-Mex and live music is entering a new chapter.
On Feb. 22 — National Margarita Day — De Nada Cantina will open its second location at 1302 S. First St., the former home of El Mercado, which closed in December after a 40-year run under the ownership of the Villegas family. The reopening marks both a handoff between restaurateurs and a broader shift in one of South Austin’s most recognizable dining rooms.
El Mercado’s final day of service was Dec. 17, ending a tenure that began in 1985, though the Villegas family has owned the land since 1971. For decades, the restaurant functioned as a gathering place for musicians, neighborhood regulars and generations of diners who watched the surrounding corridor transform.
Rather than sell the property to developers, owner Tony Villegas chose to transfer it to Stephen Shallcross and his 2 Dine 4 Hospitality Group, the team behind Sawyer & Co., Lil Easy and De Nada Cantina on East Cesar Chavez Street. That original De Nada, which opened in 2021, quickly became known for its tacos and margaritas, drawing steady crowds in East Austin.
The South First location will carry the De Nada name and much of the East Austin menu, including handmade tortillas pressed and cooked on a comal, slow-braised meats and a margarita program that has become central to the brand’s identity. Enchiladas and nachos — dishes that nod to El Mercado’s legacy — will also be offered, and the restaurant will continue serving El Mercado’s salsa. Like its sister location, the new De Nada will operate with a fully gluten-free menu and an expanded mezcal selection.
Shallcross’s group closed the restaurant for roughly a month to update the interior. The goal, he has said, was to preserve the building’s character while layering in vintage design elements that align with De Nada’s aesthetic.
De Nada plans to open initially for dinner service, with lunch to follow in the coming weeks and the possibility of adding breakfast or weekend brunch later this year.
For Villegas, who said he wanted the property to remain a restaurant rather than become condos or apartments, the reopening represents continuity as much as change. The name on the façade has changed, but the address remains dedicated to hospitality.
De Nada Cantina opens Feb. 22 at 1302 S. First St. More information is available at denadacantina.com or by calling 512-447-7445.
Dining and Cooking