The Frost Motor Bank. Photo by Scott Ball.
The Frost Motor Bank, where Weston Urban will construct Frost Bank's new office tower. Photo by Scott Ball.

After more than 25 years without a major change to the San Antonio skyline in the otherwise fast-growing Sun Belt, it’s understandable that every public discussion of Weston Urban/Frost Bank‘s far-reaching downtown redevelopment proposal is accompanied by public accolades, predictions of central business district transformation, and general exclamations of urban core glee.

Of equal interest with each new public consideration of the first-ever “unsolicited public-private partnership,” or so-called P3 project, in San Antonio are the emerging details in what appears to be the biggest downtown real estate play since HemisFair ’68.

The Frost Bank Building. Photo by Scott Ball.
The Frost Bank Building (right). Photo by Scott Ball.

Such was the case at City Council’s Wednesday B Session when Lori Houston, director of the Center City Development and Operations Department and Weston Urban CEO Randy Smith pulled back the curtain and revealed more details about the evolving P3 deal, and development opportunities that will spin out of the complex, three-party proposal that could accelerate other major changes in the downtown landscape.

Smith said his company now feels the new tower “will be the first of many” to be built as part of what Councilmember Rey Saldaña (D4) called the “downtown renaissance.”

The start of Wednesday’s briefing was pro forma, with Houston reviewing familiar details of the proposal for Mayor Ivy Taylor and City Council members, yet plenty of new gleanings emerged as the session continued.

For interested citizens, the City Planning Commission will consider the proposal at its May 27 meeting, and there will be a 9 a.m. public hearing at City Council’s May 28 meeting at the Municipal Plaza Building. City Council will vote on the matter at its June 4 meeting.

As the complex deal now stands, Weston Urban will build the first new Class A office tower in the city since the Weston Centre opened in 1989. The new tower, its height and design still undetermined, will serve as the new corporate headquarters of Frost Bank, one of the city’s pioneering businesses and most valued downtown corporate tenants. Frost Bank will occupy approximately 250,000 sq. ft. of the new 400,000 sq. ft. building, leaving 150,000 sq. ft. of much-needed Class A office space to attract other downtown tenants.

Weston Urban’s acquisition of the Municipal Plaza Building and the San Fernando Gym from the City, as well as vacant lots and surface parking lots acquired from both the City and Frost Bank, will allow for development of at least 265 new residential units in the western downtown area. All parties agree that is a conservative number. Given improved market conditions, Smith and Houston both said some planned rentals could become condominium units for sale.

Map of future tower and 265 housing units.
Map of future tower and housing units.

The City of San Antonio, in turn, will purchase the circa 1975 Frost Bank Tower and its 732-space parking garage, spend millions on upgrades, and then consolidate at least 1,200 employees now inefficiently scattered among multiple leased or city-owned locations. The rents the City no longer pays will more than cover a 30-year note on the building. The City also will derive revenue by renting 4-6 floors of the 18-floor building and some of the parking spaces to future tenants of the Municipal Plaza Building. Once the building is fully paid, it will be a debt-free City asset.

Of greatest interest Wednesday, however, was Houston’s presentation of how the City will take a deal that now promises to save taxpayers at least $1.2 million over the 30-year period and potentially add millions more in savings through related real estate transactions by the City.

As previously disclosed, the City withdrew the historic Continental Hotel from the original Weston Urban-Frost Bank proposal when the parties could not agree on a fair market value. The City, Houston said, believes that the current home of Metro Health will balloon in value in the coming years with the San Pedro Creek Redevelopment Project, the 2012 bond work along West Commerce Street, and the Cultural Corridor improvements there.

Houston also noted the possibility that the City will relocate its IT Operations from its South Frio Street location to the Frost Bank Tower, freeing another property for sale.

“We could not come to terms on a price for that property (the Continental Hotel) so we decided to remove it from the proposal,” Houston said. “We believe this property will become more valuable in the next 2-3 years and we plan on doing a RFP to sell it sometime in the next few years.”

City officials believe that this sale alone could add several million dollars to making the overall transaction significantly more “revenue positive.”

The most significant real estate play spinning out of the deal could come in a still theoretical City-Bexar County partnership to jointly offer for redevelopment an eight-acre, one-square block parcel bounded by South Santa Rosa Avenue, Dolorosa, South Flores, and West Nueva Street.

Eight-acre, one-square block parcel along Dolorosa and Santa Rosa.
Eight-acre, one-square block parcel along Dolorosa and Santa Rosa.

The block will not be an easy one to clear for development. Any proposal would have to accommodate one of the city’s most historic residences, the Casa Navarro at 228 S. Laredo St.. It’s also hard to imagine any reuse of the former county jail, now the Central Texas Detention Facility, leased by Bexar County to The Geo Group, a private detention facility operator that houses several hundreds inmates facing federal charges. The County also has two buildings that house IT staff and the Bexar County Fire Marshal’s office. The city owns a surface parking lot on Dolorosa and the former City Annex site on the other side of the county properties.

Still, the very idea of an eight-acre parcel becoming available in the historic city center will attract attention.

Bexar County Manager David Smith said City officials have proposed working together to explore redevelopment options, but there are no firm plans to do so.

“We are gradually moving people out of that space, but we don’t have anywhere to put the jail,” Smith said. “We do derive some income from it, but we are open to see what developers would bring to us. We’ve told the City we certainly want to see what’s out there.”

Beyond the potential property sales, the City expects to realize significant productivity gains by centralizing all of its administrative staff in modern, open plan office spaces inside the renovated Frost Bank Tower.

Finance Schedule

“Consolidating staff is going to improve productivity,” Deputy City Manager Ben Gorzell said Wednesday.  “We certainly believe many efficiency gains will be realized when we consolidate employees in one building.”

“This is incredibly exciting, an incredibly exciting process for the whole city,” Mayor Ivy Taylor said at the end of the presentation.

She asked Houston if all 265 new residential units would be rentals or if some would be offered for sale.

“It is too soon to tell, but Weston Urban hopes market conditions allow for some units to be for sale,” Houston said.

Mayor Taylor also noted the challenge of providing affordable housing in the mix, a concern echoed by several council members as each spoke in turn.

“I know we don’t have a formal policy on that yet, but I know it’s a question that will be asked by council members and individuals in the community,” Taylor said

“This is supposed to be the ‘Decade of Downtown,’” Councilman Alan Warrick II (D2) said, pressing Houston and Smith for a more ambitious residential unit commitment. Both said the 265-unit figure was purposely conservative.

Houston, noting that Austin now has 12,000 downtown residential units versus 5,500 in San Antonio, said, “We anticipate growing by an additional 5,000 by 2020, reaching our 2020 goal of adding 7,500 new units.”

“We are fortunate, we don’t always get this kind of opportunity,” Saldaña said. “All of us on the council, including the mayor, will be outlived by this project.” Pausing as he reconsidered his words, Saldaña added, “outlived on Council, I mean,” to much laughter.

“There’s no mistake or second guessing it: We are now living the revival of our downtown,” he added. “We may not win a competition for the best skyline in the country, but this means a lot to the whole city.”

From the downtown development proposal by Weston Urban and Frost Bank submitted to the City of San Antonio dated Aug. 8, 2014.
From the downtown development proposal by Weston Urban and Frost Bank submitted to the City of San Antonio dated Aug. 8, 2014.

The San Antonio skyline in coming years, he a said, will look very different to viewers living elsewhere when the Spurs once again are playing before national audiences in the playoffs.

Much of the conversation was about how the San Pedro Creek Redevelopment Project will change the downtown equation.

“That’s an area that will benefit greatly from public investment,” Saldaña said. “It will be a very desirable place to live. The question is: Will it be a desirable place for everyone to live? What kind of control will we have?”

Speaking of the City’s undeveloped parcels, Houston responded, “We will have a lot of control because we own the property.”

Councilmember Ron Nirenberg (D8) commended staff for negotiating the complex deal over the last eight months.

“This was an amazing job, it’s a manifestation of what we’ve been talking about as the Decade of Downtown,” Nirenberg said. Turning to Weston Urban’s Smith, he said, “I’m interested in what the building will look like.”

“We are really convinced that this (tower) will be the first of many in our city … Frost Bank in Austin is not the tallest building in Austin, but it’s the most recognized,” Smith said. “We are unwavering in our commitment, as is Frost – this is their brand on the skyline – to build something the whole city can be proud of.”

Smith said Weston Urban and Frost Bank would conduct a national design competition and travel to visit with experienced tower design firms to see if their culture syncs with Frost Bank and San Antonio.

Councilmember Roberto Treviño (D1), an architect, spoke about past cityscape strategies calling for dramatic spires, while contemporary thinking focuses on designing sustainable buildings that embody the latest technology.

“Some people say the role of an architect is to provide a vision that no one else would have thought about,” Treviño said.

*Featured/top image: The Frost Motor Bank, where Weston Urban will construct Frost Bank’s new office tower. Photo by Scott Ball. 

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Robert Rivard, co-founder of the San Antonio Report who retired in 2022, has been a working journalist for 46 years. He is the host of the bigcitysmalltown podcast.