Lone Star Brewery Redevelopment at Standstill, But Neighbors Remain Hopeful

Nearly two months after it was supposed to go on the foreclosure auction block, the former Lone Star Brewery site remains inactive, the grand plans for its redevelopment in limbo.

Behind the scenes, at least one of the high-profile tenants for the proposed mixed-use site – entertainment chain Punch Bowl Social – has bowed out. But while redevelopment plans are idled at least for now, the Edwards Aquifer Authority (EAA) does want to see some action at the site, in the form of capping abandoned water wells.

Neighborhood residents and business owners, meanwhile, are optimistic the former brewery eventually will be redeveloped into something that complements the area’s culture and history.

“Whatever happens, it’ll be a great asset,” said Andy Benavides, an artist and director of Southtown The Arts District (STAD). “It’ll be one more thing to boast about in our neighborhood.”

Houston-based NCC Financial had determined that its $7.4 million loan to Lone Star Brewery Development was in default, and a foreclosure auction was scheduled for Nov. 7 at the Bexar County Courthouse. But NCC ordered a halt to the auction. Local attorney Dale Weyand, the trustee for NCC Financial, said the company told him not to release additional information, according to local media reports.

Lone Star Brewery Development was the venture created to oversee the transformation of the brewery originally built in the mid-1930s. San Marcos-based Aqualand Development and national retail developer CBL & Associates Properties were to be partners on the project that was to feature office and retail space, restaurants, a movie theater, a boutique hotel, and multifamily housing. The first phase of redevelopment on the 35-acre site was supposed to have started in late 2018.

But CBL withdrew from the project after getting an anonymous letter claiming Aqualand’s president, Mark Smith, had spent time in federal prison and filed questionable lawsuits against former business partners.

Houston-based Parkview Capital Credit bought Lone Star Brewery Development over the summer, according to filings with the U.S. Securities and Exchange Commission. Representatives from Parkview did not answer a request for comment.

Scrapping its plans to open a location at the old brewery, Denver-based Punch Bowl Social, which has locations in Austin and Dallas, has decided to instead explore options on the Northside.

“While we strongly considered the Lone Star Brewery site as a possible location for Punch Bowl Social, we determined many months ago that it was not an optimal location for our brand,” said company founder and CEO Robert Thompson.

Representatives from Plano-based movie theater operator Cinemark, which currently has two San Antonio locations and was identified as a future tenant of Lone Star in 2016, did not respond to requests for comment on whether they still plan to build a theater at the site.

Meanwhile, the authority overseeing the Edwards Aquifer recently published a formal notice asking the brewery owner to plug three wells on the brewery property. EAA staffers have been identifying Edwards wells across the authority’s service area, seeking to cap abandoned wells to avoid seepage of surface pollution.

Roger Andrade, the EAA’s groundwater protection manager, said the three wells are considered abandoned because they have not been re-permitted for operation for years. Still, the authority would like to examine the wells for any potential of aquifer contamination.

“Currently their classification is mostly an administrative [permitting] issue,” Andrade said. “The EAA is seeking to more thoroughly evaluate the physical attributes of the wells, which would include an inspection of the wells’ surface conditions and downhole geophysical evaluation.”

The property owner is required to do the geophysical evaluation of downhole conditions and submit the results of each well to the authority.

Despite the uncertainty surrounding the redevelopment, Lone Star area residents and merchants are confident that something positive will happen with the property while seeking to ensure that any redevelopment is compatible with the neighborhood.

For Boyan Kalusevic, co-owner of Dorcol Distilling & Brewing Co., any effort to return an underutilized property to its potential is welcome. Dorcol is less than one mile west of Lone Star.

“The degree of the project’s success and long-term impact will ultimately be judged by the public-private vision and leadership,” Kalusevic said. “Identifying those players might need to be the first step in this long-running effort that’s been eluding multiple [City] administrations.”

Kalusevic said the City and neighborhood residents and businesses will need to be wholly engaged to help guide any redevelopment to fruition.

“A bit longer attention span will need to be committed to see Lone Star through, especially if the hope is to reinforce the much-needed urbanization efforts in the area,” he said.

At the same time, Kalusevic said he and fellow community business owners are not waiting for something to happen at Lone Star to spur business growth. Celebrating the business’ fourth anniversary last weekend, Dorcol’s owners recently expanded the distiller’s production capacity and plan to enlarge the facility on South Flores Street.

“Lone Star development or not, we believe in what we are doing here long-term, and we believe in the support our neighborhood has shown us,” Kalusevic said.

Benavides said he and neighbors initially were excited by Aqualand’s concept for the brewery complex. Southtown The Arts District and other neighborhood groups were impressed that Aqualand kept them in the loop about redevelopment plans.

Benavides said Lone Star and the other neighborhoods that make up Southtown are unique in San Antonio in that the local creative class is leading an economic and cultural revival of the area.

“The groundwork for the redevelopment of Lone Star is already in place,” Benavides said.

The surge of economic and creative redevelopment in the area includes a new microbrewery, Künstler Brewing, Freight Gallery and Studios, 10BitWorks, Carnitas Lonja restaurant, El Luchador bar, and the EPIcenter, a new energy innovation center.

While many have said the Lone Star property has the potential to become the “Pearl of the South,” business owner Jody Bailey Newman said there’s a key difference between Lone Star and the housing, dining, hotel, and retail success of the Pearl.

The Lone Star project will not be “a gift from a billionaire to the city of San Antonio,” said Newman, who co-owns The Friendly Spot and other area businesses.

That “gift” was from Kit Goldsbury, who made his fortune with the sale of Pace Foods to Campbell Soup in 1994, purchased the derelict site 15 years ago, and convinced the Culinary Institute of America to open a culinary school in 2010. He poured millions of dollars into the Pearl through his private-equity firm Silver Ventures.

“There’s no way it can be the Pearl of the South,” Newman said, without a major, debt-free investment. “[The cost of the redevelopment] has to be paid back. … That’s the obstacle.”

Another challenge for the area is transportation infrastructure, she said. Lone Star doesn’t have a main artery road like Broadway Street to allow easy access to its grounds. There are “new, multi-family [projects] coming in every quarter,” she said. “Our streets are exactly the same when I moved here pretty much in 2003.”

However, stretches of Probandt Street, Lone Star Boulevard, and Roosevelt Avenue – all of which are adjacent to or near the former brewery – are included in the City’s 2017 bond at $5 million, $5 million, and $13 million in street improvements, respectively.

Al Arreola Jr., president and CEO for the South San Antonio Chamber of Commerce, said mere talk of reviving the Lone Star Brewery has made it attractive to a range of redevelopment ideas.

“It makes a project more viable, especially with all the investment in infrastructure happening in the area,” Arreola said.

Arreola said Lone Star’s revitalization could be inspired by the Pearl, but it does not need to be a carbon copy.

“Pearl was able to present a brand unique to San Antonio,” Arreola said. “I’d love to see Lone Star be redeveloped in a way that pays homage to the local history and culture.”

Managing Editor Iris Dimmick contributed to this article.