San Antonio City Council unanimously approved a 45-year lease agreement between Hemisfair Park Area Redevelopment Corporation and local developer AREA Real Estate on Thursday morning for a proposed 163-unit mixed-use apartment complex that will overlook Hemisfair’s multi-million dollar park transformation project.
The agreement allows the developer to start right away on more detailed plans for the building that will replace a surface parking lot on 1.1 acres, AREA principal David Adelman said after the vote. The project includes 180 parking spaces for tenants and 238 public spaces for park visitors and at least 3,200 square feet of street-level retail/restaurant space.
Preliminary design renderings were released in December when the deal was announced (see images below), but the final design will go before the Historic and Design Review Commission and City Council for approval in the coming months.
“(The City) will be engaged long before we get there,” Adelman said. “It’s a very collaborative public and private project.”
David Lake of Lake/Flato Architects and Fred Wilson of WGW Architects in Houston are designing the project and AREA will be in close contact with City and Hemisfair staff throughout the process, he said.
Construction is planned to begin in late 2016 and is expected to take about 20 months, Adelman said. The goal is to have the project completed in late summer of 2018, in order to associate itself with the city’s 2018 Tricentennial celebrations.
Part of AREA’s deal with Hemisfair requires that 50% of the units be offered with income restrictions to people earning 80% or less than the median income, which was $50,075 in 2014.
These “entry-level workforce” units will be aimed at attracting downtown service industry, office workers, and other downtown employees that make anywhere from $30,000 to $45,000 a year, Adelman said, with monthly rents around $1,000.
For such a prime location downtown – nestled amid the recently completed Yanaguana Garden playscape, eight-acre Civic Park (also coming in 2018), planned Tower Park, new retail and restaurant tenants in the small historic cottages, La Villita, and Southtown – it’s likely that the project will have no problem finding tenants.
“Affordability is certainly going to be a challenge because having design projects and affordability sometimes don’t go hand in hand,” he said, but the AREA team worked with the City to create a strategy that will allow both.
Because the Hemisfair Park Public Facility Corporation (PFC) essentially owns the land and income limitations are associated with half of the units, the land and improvements made to it are exempt from property taxes. This means they can offer lower rents for lower-income tenants.
Council members expressed their confidence in Adelman’s ability to deliver a high-quality project. AREA has a solid downtown track record and several ongoing projects including the historic Maverick building on East Houston Street and a 305-unit multifamily project at 815 Avenue B.
“As a developer in this community you are are cognizant of making sure that this project in particular is going to be accessible to all San Antonians,” said Councilman Rey Saldaña (D4). “It should be a decade of downtown for every San Antonian.”
AREA has committed to maintaining the affordability element of the project, Adelman said. “The challenge is to maintain focus and maintain fortitude – to get it done regardless of what happens in the financial (or) leasing markets.”
To further realize the benefits of bringing development – housing and commercial projects – to an area that has sat stagnant for years save for special events, the City plans on creating a Tax Increment Reinvestment Zone (TIRZ) just for Hemisfair’s property. The Inner City TIRZ, which uses enhanced property tax revenues to reimburse developers for infrastructure improvements, will have to give up Hemisfair parcels to create the new zone. City staff said that process could take up to six months.
*Top image: View of AREA Real Estate’s housing complex from Civic Park looking South. Preliminary design rendering courtesy of Hemisfair.