Coach's Garage was an planned location for Psychonauts 2 and location from the Motherlobe, more specifically the outsides of it at the Quarry. The deletion of this area has to do with the changes and rework to the story the sequel suffer in its development and budgetary constraints.
Description[]
General concept information from the art book[]
"In one of the game’s early cutscenes you may have noticed Coach Oleander carrying his beloved merman tail from the Psy Jet into HQ. Later on. Raz has a conversation with him in the bowling alley about his Psycho Mech Battle Bot, and Coach grumbles it had been a casualty of budget cuts at the organization. Coach Oleander doesn’t really have a dedicated space in Psychonauts 2 (unless you count the little storage closet next to Sasha and Milla’s respective offices), I can officially confirm plans for his own workshop. It has a large garage shaped like his body, located in the Quarry. And inside that garage, Oleander would be tinkering with his beloved Psycho Mech.
But it gets better. Because Coach O’s obsession with mechs originally had a larger role in Psychonauts 2, including a fully functional mech. And in one early version, it was a mermech."
"Originally this was how the ending was set up: Mecha Coach shows up in the old colony outside the heptadome after Lucrecia’s Lament, and threatens to smash Lucrecia, but has reservations because she’s a sweet old lady. 'Truman' [Gristol’s brain controlling Truman’s body] commandeers the Mech, and turns it on Sasha, Milla, and the others. Psychic warfare ensues. So rather than getting swept up in the cyclone, instead the Psychonauts and Psychic Seven are battling the Mech and Maligula’s attacks during that last state. I think leaving it all up to Raz was a much cleaner call." – Seth Marinello, Lead Game Designer.
To see the notes and concept arts from the book you can check out this video.

Concepts of the Mermech and its plot relevance.
The Mermech and Augustus Aquato[]
The Mermech was the Psycho Mech Oleander was intended to work into instead of the one seen in the blueprints he had back in the Astra Lanes. Some concept art show the closest ideas of how this giant robot would look and how it would have influenced in the third act of Psychonauts 2: The mech would be in construction by Oleander while Razputin is on his mission to fix Ford Cruller’s mind, upon finishing the events at Green Needle Gulch that leads to the reunion of the Psychic Seven in order to help Lucy on beating Maligula, Oleander would arrive with his mech and by sympathize with Nona thanks to her being an old lady, Truman would use this advantage to perhaps trick Oleander and take the Mermech. It seems that Raz wasn’t able to fight this powerful robot thanks to its Hydrokinetic powers and regards to the curse his family had, so to finish with the curse once and for all, Raz must have enter the mind of Augustus Aquato.
With this information it can be interpreted that the Mermech could have been a Boss (or even the Final Boss Fight) of the game and that Augustus was intended to have a bigger role. About how much progress was done for Augustus’ mind was done is unclear but at least it seems to confirm there were plans for it to happen.
Trivia[]
- Even though this entire location as well as the concepts and ideas associated to it were ultimately scrapped, Oleander references the real reason for its deletion with the line "Those penny-pinchers cut it from the budget!"
- An early version of the map for Psychonauts 2 different locations shows indeed, the point where this workshop was planned to be positioned.