With its classy rehab design, the West Elm furniture store on East Grayson Street blends into the Pearl so well that it would be natural to assume it was built by the Pearl’s developer, Silver Ventures. But it was actually among the first projects to be completed by another ambitious local builder, GrayStreet Partners.
And in some ways, it doesn’t quite fit in at the Pearl, which has avoided national brands such as West Elm in favor of local ones such as Niche, Feliz Modern, Dos Carolinas and The Twig Book Shop.
An upscale national retailer will be more at home at the Broadway East community across Broadway from the Pearl, which GrayStreet and its partner, San Antonio-based Fulcrum Development, hope to fill with well-known luxury brands such as Louis Vuitton, Gucci, Ralph Lauren, Rolex and Chanel Beauty, according to a new brochure for the project.
Those brands are listed with more than two dozen others in a “merchandising vision” published on the website of Shop Companies, a Dallas-based real estate firm that is handling the project’s leasing.
The list of brands — featuring other boutique names such as El Paso-based Lucchese Boots, which sells men’s cowboy boots for between $525 and $1,895 — indicates that the vision for the project has evolved since GrayStreet first announced it in 2017, after buying a 14-acre plot from the San Antonio Independent School District to serve as its core. That year, GrayStreet’s development director, Peter French, told the San Antonio Report that the community would be more “approachable” than the Pearl, where rents and retail prices are out of reach for many San Antonians.
Kevin Covey, GrayStreet’s founder and general partner, told the San Antonio Express-News at the time that the roughly 23-acre Broadway East would have less focus on fine dining than the Pearl and less luxury than is seen at Pearl projects such as Hotel Emma and the Cellars apartments.
Two dozen retail outlets
The new retail approach is less of a surprise, however, than GrayStreet’s continuing involvement itself. In 2020, the firm signaled that it had pulled out of the project after selling the land to Fulcrum. Covey told the San Antonio Heron that the COVID pandemic had had a “dramatic effect” on its plans. The firm had been seeking a partnership with a regional pension fund to provide the needed construction capital, but the fund pulled out, he said.
Asked for comment, French directed questions to Covey, who didn’t respond to an email on Tuesday. Calls to representatives of Fulcrum and Shop Companies on Wednesday were not returned.
Referring to the project as BESA District, the new brochure states it will break ground in the third quarter of next year, with the first phase set to be complete in early 2026. The first phase will feature 175,000 square feet of retail, according to the brochure; the second phase will offer a mixture of offices, retail and hospitality.
The brochure shows plans for more than two dozen retail outlets in two-story buildings. The plan also includes a 15-story office building and several other buildings between seven and 13 stories.
Skeptical neighbors
From the start, residents of Government Hill, the historic neighborhood where the Broadway East community would sit, have feared that its construction will further drive up their property taxes, which have already surged with the growth of the nearby Pearl. In phone interviews, several of them said they didn’t think the presence of upscale stores would benefit them.
One resident, Cindy Tower, said she had been a fan of GrayStreet’s original plan, which had included “normal things to support the little people.”
“It’s not about the people that live here,” she said. “Who’s the city for? … Cities are supposed to be about people and keeping cultures alive.”
Beatrice Cortez, 85, a longtime Government Hill resident who now lives elsewhere but still owns a home there, said she read some of the retailers’ names aloud at a gathering of a group of seniors at St. Patrick Catholic Church on Willow Street on Tuesday and “they all laughed — we never heard of them.”
“I guess we don’t shop there,” she said. “You know, these people come in, the city turns around and gives them a big break. … We’re the ones who are having to pay for this.”
In 2021, San Antonio’s City Council approved a $7 million incentive package through the Midtown Tax Increment Reinvestment Zone for a $90 million apartment complex which Dallas-based Encore Enterprises is building as part of Broadway East. GrayStreet and its prior development partner for the community, the Houston firm Midway, asked in 2020 for another $8.9 million through the Midtown TIRZ to cover infrastructure costs for the project, but those incentives don’t appear to have been awarded.
Government Hill residents say they are concerned about the direction of the neighborhood — where many families have lived in the same home for generations — especially with the recent news that Pershing Elementary School was among 19 schools the San Antonio Independent School District has designated for closure.
“You’re pushing out families,” said Denise Gutierrez-Homer, a neighborhood resident who in 2021 launched a bid for the mayor’s office. “They’re not going to hire locally. I don’t see anybody in my neighborhood working for Rolex or Chanel. In order to work for those retailers you have to know their products or wear their products.”
Many of the stores included in the “merchandising vision” for Broadway East have locations in places such as South Congress Street in Austin — including Parachute, a home furnishings store; Alo Yoga, a yoga apparel company; and Le Labo, a fragrance store — a street formerly known for its quirky shops and music venues that has filled up with high-end boutique brands. Several of the stores have locations in upscale shopping areas such as the Shops at La Cantera and Highland Park Village in Dallas.
A lengthy timeline
GrayStreet has always said it would take a long time to develop Broadway East, especially given the improvements that would have to be made to the area’s infrastructure, including roads, drainage and utility lines.
After the project’s unveiling in 2017, representatives of the firm met with Government Hill residents to court their support. An attorney for the firm said that year it would work with the neighborhood’s homeowners to make investments in their homes. It’s unclear whether the firm still plans to do that.
In 2020, after GrayStreet partnered with Midway, it said the project would cost a total of $560 million and would feature 1.6 million square feet of mixed-use development, according to the San Antonio Heron.
Another of GrayStreet’s projects in the area also hasn’t come to fruition: In 2019, the firm said it would build a 20-story W Hotel on Broadway at Newell Avenue. Yet the firm has continued to make investments in the area, including by buying the site of the Pig Stand diner on Broadway earlier this year.
