Over the next 30 days, City Council will consider commercial rezoning requests for two adjacent lots in Government Hill that highlight the neighborhood’s dual, but sometimes conflicting, goals to maintain its neighborly atmosphere and affordable housing stock while attracting investment to the Eastside neighborhood.

In interviews this week, some neighbors said they were open to compromise with a lighter commercial use than proposed. But it’s unclear if the property owners will agree.

While the zoning changes are being considered separately, the landowners – longtime resident Sara Martinez and the Cloma Jackson Living Trust (managed by Frost Bank) – are attempting to work together on a deal.

The Trust’s zoning and associated planning amendment requests for land (roughly 0.7 acres) just south of Martinez’ (1.1 acres) will be considered by City Council this Thursday. Martinez’s requests are slated to be considered later next month. Council could delay this week’s vote in order to hear the requests together.

“Both properties are held under very different circumstances,” said Matthew Badders, a local attorney who is representing Martinez. “Mrs. Martinez is an individual; the trustee of the trust is an NYSE-traded corporation. As an individual, Mrs. Martinez is generally free to quickly make decisions about her property, but the bank has a committee process that is more involved.”

The properties are currently zoned for residential use, but their location at the northwest corner of North Walters Street and the Interstate 35 access road makes them prime commercial real estate, representatives of the property owners have said.

However, Government Hill is already seeing the impacts of gentrification with rising property values and rents, neighbors said. With nine homes slated to be demolished to make way for new development, the rezoning is seen as an encroachment of commercial interests in their neighborhood.

Neighbors were strongly opposed to the original proposal to build a gas station there in January. QuikTrip backed out of purchasing the property in February after the Zoning Commission rejected its request.

In the second proposal, property owners are requesting the same “C-2” commercial zoning as QuikTrip was. They had preliminary plans to bring a Starbucks or other business to lease the property. Neighbors were more open to a Starbucks, but that plan – which would have been brokered by Vaquero Ventures – was nowhere near formalized with the coffee chain.

In July, zoning commissioners, and several neighbors, cited concerns over what business would actually end up on the property.

“This just feels like a gamble,” Joy McGhee, who chairs the Zoning Commission and voted against both zoning changes, said at the time.

Steve Versteeg, who lives across Reno Street from Martinez’ property said the deal felt like a “bait and switch” attempt to get the most profit off the land. The “C-2” commercial zoning requested would allow for higher-intensity uses than a coffee shop. Under “C-1,” gas stations are not allowed.

C-1, or “light commercial,” could be a compromise, Versteeg said. He would prefer a Neighborhood Commercial, or “NC,” designation, but ideally, it would remain residential.

“What happened to the affordable housing crisis? [San Antonio] still has a problem with that,” he said, noting that the people living in those nine houses have had to leave.

As a teenager, Martinez and her father immigrated to the U.S. from Mexico. She’s now in her 70s with a father who needs additional care and is done with being a residential landlord, Badders said.

Not all area residents are opposed to the rezoning from commercial to residential. The City sent 44 notices to property owners within 200 feet of Martinez’ property ahead of the Zoning meeting: 10 were returned indicating their support, eight in opposition. Beyond that radius, however, 16 were returned in opposition and 14 in favor. The Commission voted 7-3 to recommend denial of both requests.

During that meeting, Badders revealed that Starbucks could be a tenant.

Starbucks hasn’t never “seriously engaged” in discussions about this property, according to an email sent to Versteeg and his wife D’Ette Cole from a company representative. “I can confirm that [a letter of intent] does not exist.”

That’s because the letter of intent is between Martinez and Fort Worth-based commercial real estate and development firm Vaquero Ventures, Badders said. That firm works with hundreds of different companies, including Starbucks.

Badders provided the San Antonio Report with a redacted copy of the letter of intent with Vaquero Ventures dated July 21 – the same day Zoning Commission met.

Vaquero Ventures co-founder W.A. Landreth could not be reached for comment on Tuesday.

It’s too early to start seriously engaging commercial tenants for land that’s not yet zoned properly, Badders said.

“In a commercial transaction, you don’t deal directly with your intended end-user, any more than you would have renters lined up for apartments before the apartments are built,” he said.

Councilwoman Jada Andrews-Sullivan (D2), whose district includes Government Hill, said she wants what is right for the community.

“District 2 needs development that will speak to all residents and not a select few,” Andrews-Sullivan said via text. “We need, not only economic development but; amenities that will add a value of life to the residents that live within our neighborhoods.”

“Delaying progress of development and not being willing to compromise will hinder growth of community partners into the district and we cannot continue to do that,” she said. “I’m in support of commercial usage but we must be deliberate in how we move forward.”

Government Hill Alliance, the official neighborhood association recognized by the City, is supportive of the zoning change. Two other groups, including the Government Hill Community Association, are opposed.

Adding to the controversy and confusion is the coronavirus pandemic, neighbor Cole said. That has stunted community engagement and awareness for this second round of proposals.

“I personally resent that,” she said. “We’re working with a community [that is] older, and a lot of them don’t as readily know how to use their computer.”

One silver lining of this battle is that it has brought Cole and Versteeg closer to their neighbors and a better understanding of how local government deals with development, Cole said. “We have relationships with people that I don’t know if we would have ever met. That’s been very beautiful.”

Iris Dimmick

Senior Reporter Iris Dimmick covers public policy pertaining to social issues, ranging from affordable housing and economic disparity to policing reform and workforce development. Contact her at iris@sareport.org