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The owners of the vacant Lone Star Brewery have overcome a significant challenge to what they consider the hardest part of any development: getting started. 

City Council on Thursday approved unanimously an agreement that will reimburse Lone Star District developers GrayStreet Partners and Midway up to $24 million in infrastructure costs over 15 years, putting the redevelopment of the dilapidated brewery on track to start later this year.

“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,” said Don Quigley, vice president of Midway, which with GrayStreet plans to turn the dormant site into a residential, office, and retail development starting later this year. 

The total project is estimated to cost $709 million and will be constructed in phases over a 10-year period.

“Mixed-use centers such as Lone Star have a lot of coordination that is required. It is a significant investment from municipalities, a significant investment from private investors,” Quigley said. “And so there’s a lot of coordination that needs to go into that and Lone Star is a really important project for us. I think one of the challenges that we face whenever we’re starting one of these projects is the actual starting of the project.”

Other developers have made several attempts over the years to start such a project only to fail due to economic obstacles, leaving the 32-acre industrial site on San Antonio’s South Side with untapped potential. 

GrayStreet is excited about the opportunity to “restore what was once a very vibrant, active, kind of beloved part of San Antonio’s heritage to something that can be beloved and active and used again,” said Peter French, director of development at GrayStreet. 

“Think of a great walkable mixed-use place that’s a jumping off point for the UNESCO World Heritage site, added park space … and something that we’re also very excited about is the opportunity to partner with the City Parks department and with the Roosevelt [Park] Neighborhood Association on improvements to the adjoining Roosevelt Park.”

The developer is also projecting the redevelopment will generate over $130 million in new tax increment revenue for the San Antonio Independent School District over the next 15 years. 

Lone Star District will encompass at least 1 million square feet with about 20% of the total 1,282 housing units categorized as affordable, 186 hotel rooms, and nearly 400,000 square feet of office space. Also included in the project are plans to refurbish Lone Star Boulevard with new widened sidewalks, bike lanes, and buried utilities.

Before construction can begin, environmental cleanup of the site, plagued by fires and criminal activity, will be the first job for crews to tackle. 

“Obviously, there’s a lot of undesirable things happening there on that site now that’s literally costing all of us money,” French said. “So we’d like to stop the deterioration and increase the value and make it a place that everyone can love again.”

The agreement approved by council calls for infrastructure upgrades to be reimbursed up to $2 million during the first two years of the project through the Inner City Tax Increment Reinvestment Zone (TIRZ). Starting in 2024, the project would be eligible for tax rebates through the TIRZ and the general fund. 

Reimbursement costs are estimated at $11.5 million in the first phase, $10 million in the second phase, and $2.5 million in the third.

“The truth is Lone Star has been a blight on the city and on the district for 25 years,” said District 5 Councilwoman Shirley Gonzales, who is nearing the end of her fourth and final council term. “And it is sort of my finale going out … hopefully, to see this project come to fruition.”

Shari Biediger

Shari Biediger is the business beat reporter at the San Antonio Report.