Hopes that the old Lone Star brewery in South San Antonio would finally be redeveloped after nearly a decade were dashed this week with the announcement that the property is on the market once again. 

Houston-based developer Midway said Wednesday it is looking to sell all or part of the 35-acre former brewery it owns with San Antonio developer GrayStreet Partners, even as demolition and other work continues at the site on Probandt Street and Lone Star Boulevard.

Midway often considers land sales throughout the development cycle of its projects, stated Don Quigley, vice president, investment and development for Midway, in an emailed statement.

“While we remain eager to work in San Antonio, [the brewery property] is first and foremost a land investment,” he said. “We constantly evaluate current market opportunities on our investment in order to maximize value for our investors.”

GrayStreet Partners executives Kevin Covey and Peter French did not return calls for comment.

Midway and Graystreet acquired the dilapidated industrial site in April 2020 through a bankruptcy sale for $14.45 million.

Together they launched what they said would be a $709 million, multiphase plan to convert the vacant complex into a mixed-use development reminiscent of the Pearl with retail, hotel, restaurants and multifamily housing. 

A website promoting the development called Midway and GrayStreet “master developers” and invited other partnerships to “create an enduring and remarkable destination in San Antonio.”

In support of the project, the San Antonio City Council approved in May 2021 an economic development agreement to reimburse the developers up to $24 million in infrastructure improvement costs over 15 years. 

“I know there’s been a lot of attempts to do something at Lone Star, and something I want to stress is that these projects are immensely complicated,” Quigley said at the time.

The Chapter 380 agreement requires the developers to notify the city within 30 days of if they have any intentions of selling the property. The developers also are required to notify the city if they receive a buyer’s offer they are considering, according to a city spokeswoman.

Because the owners stated they want to remain involved in the overall development, the agreement would not be automatically terminated following any sale of the property, she said. Also, the agreement is based on reimbursement of completed work, so the city has not yet paid out any funding for the project.

In August 2021, the city approved the developer’s plan to raze a number of the aging and graffiti-covered structures.

The demolition would be done in phases, said French, director of development for GrayStreet Partners, at the time, with a goal of “making the site less of a hazard.”

The 89-year-old Lone Star property has been the object of several failed redevelopment proposals in the last decade. Plans by a partnership between San Marcos-based Aqualand Development and Tennessee-based CBL & Associates Properties fell through in 2018 when a dispute between the two groups brought the project to a standstill. 

Last spring, a two-alarm fire damaged portions of a building at the site, which the beer maker vacated in 1996.

GrayStreet recently completed a rehabilitation project on the historic Light Building property on Broadway Street for office space. The developer’s plans for a large-scale, mixed-use project near the Pearl began to unravel in January 2021 when it put portions of the 15-acre site it had amassed on the market.

This article has been updated to clarify the requirements of the Chapter 380 agreement with the developers.

Shari Biediger

Shari Biediger is the development beat reporter for the San Antonio Report.