Thursday was the last day City Council met before its month-long break from official business, and district representatives along with the mayor got plenty of work done in the way of center city development – among other sectors of city government.
Council approved a $7.4 million incentive package for an 18-story downtown hotel with four adjacent housing units, cleared the way for the demolition of a large building on Dwyer Street where a 272-unit mixed-use housing project will be built, and voted against the historic designation of an early 20th century home slated for demolition near the Broadway corridor.
All of these decisions, while made on the unique merits of the case, represent the growing market for real estate in San Antonio’s urban core as part of the city’s so-called “decade of downtown.” Developers of housing and commercial projects downtown are seeking approval almost every week, while City Council members are trying to balance infill development with preservation of neighborhoods and cultural corridors.
The Future of Two Prominent Downtown Corners
Property owner and developer Chris Hill, who owns the Esquire and various restaurants and residential projects downtown, will transform the Alamo Fish Market and Witte buildings, both long-vacant historic buildings on the same blighted block of East Commerce Street and the River Walk, into a 19-story hotel and a mixed-use development, respectively.
Hill hopes to finish the $60 million hotel by the City’s 300th anniversary in 2018, and the $7.5 million mixed-use development by 2019.
Through various City incentive programs, Hill will receive a $7.4 million incentive package for the two projects that include historic preservation, four housing units, 195 hotel rooms, several restaurant and retail spaces, and River Walk infrastructure and access improvements.
(Read More: Esquire Owner’s Boutique Hotel Design Approved)
The incentives , which include fee waivers, tax rebates, and forgivable loans, come with several provisions on how the hotel is operated and interacts with the River Walk. The operator Hill has hired to manage the new Hilton franchise hotel that will be marketed to the Millennial traveler, pays hourly employees top-quartile wages, allows employees the right to unionize, and maintain and operate an elevator and staircase that connects the River Walk to the street for the public to use – not just hotel or restaurant guests.
If any of these or other stipulations of the agreement are violated over the next 15 years, a clawback clause would allow the City to recover up to $6 million of the incentive package.
Though not technically part of the agreement, Hill and the project design team are working closely with VIA Metropolitan Transit and the City on what will become of the busy bus stop on Commerce Street.
About a dozen hotel union members protested the incentive package, citing the track record of White Lodging, the hotel operations company that Hill has hired. There were back-and-fourth lawsuits in Austin over the wages of 13 electricians subcontracted for work on a 1,000-room J.W. Marriott Hotel that sparked picket lines and protests for months.
In 2010, White Lodging paid at least $40,000 to settle a religious discrimination lawsuit after “the company failed to provide an accommodation to four Somali women of the Muslim faith by not allowing them to work while wearing their hijab or head scarf, as is their custom of their faith,” according to the U.S. Equal Employment Opportunity Commission. One union member accused White Lodging of having ties to anti-LGBTQIA legislation in Indiana.
“These are serious allegations,” said Danna Schneider, organizing director for Unite Here. “This whole process seems rushed.”
Councilwoman Shirley Gonzales (D5) suggested that the vote be delayed until these concerns were more thoroughly reviewed, but most Council members were comfortable with the deal since the incentive package is going to Hill’s Crockett Urban Ventures rather than White’s Lodging. Hill is a native San Antonian and respected local businessman.
City staff pointed out that on top of the non-discrimination clause in the agreement, the City has a non-discrimination ordinance that was enacted in 2013.
“I’m a gay man, just so you know,” Hill said, motioning to the union members. Earlier in his testimony, he said he hopes the projects will “become a symbol of urbanism in downtown. … I’m certainly confident that I have the wherewithal to oversee White Lodging to live up to the agreement that we’re signing with the City, it’s a pretty big hammer, that $6 million.”
Councilmen Joe Krier (D9) and Ray Lopez (D6) recalled walking down that block often and thinking, every time, that something needs to be done. The blighted stretch is one block from Main Plaza, City Council Chambers, and the Zona Cultural Arts District.
“Yet this is one of the most blighted blocks in downtown San Antonio,” said local attorney Frank Burney who is representing Hill.
The measure was approved with no votes from Gonzales and Councilman Cris Medina (D5).
Big plans for Former housing center, office building
The City and Landbridge Partners had originally received approval in 2014 to enter into an incentive package for a mixed-income housing development at 307 Dwyer Ave., the former center for transitional housing operated by the City. Instead, the City will be selling the property to the development company for $800,000.
The mixed-income agreement fell through because the market rate for housing in the area is too high to make it economically feasible, according to Assistant City Manager Lori Houston. Developers of a large housing project several blocks away are seeking Bexar County incentives.
The building and land were appraised at $1.9 million in 2012, Houston said, but because the structure needs to be demolished and the San Antonio-based developer will pay $800-900,000 in SAWS impact fees, the City will charge only $96,000 less than the land value. Proceeds from the sale will go directly to the Haven for Hope Endowment Fund. The housing center has been vacant since the Haven for Hope opened in 2010.
“We don’t have a lot of market rate housing in the downtown core,” Houston said, adding that in this case, the City only owns 25% of the total project area.
Landbridge will be redeveloping the block, including the vacant Heritage Plaza commercial building, except for a small historic home at 315 Dwyer Ave.,
Heritage Plaza, a vacant office building (right), stretches north down South Main Avenue. Photo by Iris Dimmick.
Councilman Rey Saldaña (D4) said any agreement that leaves out mixed-income housing is “short-sighted,” pointing to downtown Austin, where there is a lack of affordable housing and plenty of market-rate.
“I’m disappointed that we can’t ask for more,” Saldaña said, before casting the only no vote against the property sale.
Mayor Ivy Taylor defended the deal and supported City staff’s conclusion that the project will not support affordable housing. While it’s a “worthy policy goal, practically for this project (a mixed-income component) would not work.”
There will be more robust discussions about the logistics of increasing affordable housing in the urban core in the future, she added.
Home in Westfort Alliance Neighborhood to be demolished
The long-vacant home at 255 Brahan Blvd. was under consideration for designation as a historic landmark. It’s located in the tiny Westfort Alliance Neighborhood across Broadway Street from Brackenridge Park Golf Course, which is eligible to become an historic district. The century-old Craftsman bungalow was designed by Charles T. Boelhauwe, the architect who designed the Sunken Gardens Theatre, and it’s located at a prominent intersection in the neighborhood.
A developer intends to purchase the property, demolish the house, and build four single-family homes on the half-acre lot. The Historic Design and Review Commission approved a request earlier this month to ask City Council to designate the home as historic. Several neighbors attended that meeting on June 15, but none were signed up to speak up on behalf of the historic home on Thursday.
City Council voted unanimously to deny the historic designation. The developer will proceed as planned.
If the Westfort neighborhood is designated as historic, said Councilman Alan Warrick (D2) whose district includes the neighborhood, the home would win stronger consideration. Since the request in this particular case was intended to prevent a property owner from selling the property, Warrick said, “that’s an infringement on property rights.”
He cited the more than 80 other historic homes in the neighborhood that will still contribute to a historic district designation.
“Hopefully, this will be a lesson to the neighborhood to get the designation,” he said.