A consensus between the City and owners of the former Lone Star Brewery site that for over two decades has sat vacant and deteriorating south of downtown could accelerate redevelopment of the blighted property.

Members of a City Council committee reviewed an agreement that, if approved by the full council on May 20, would put the long-awaited project on track for demolition and construction to begin by the end of the year. 

Plans call for converting the vacant complex into a mixed-use development known as the Lone Star District with retail, hotel, office, restaurant, and multi-family residential spaces, and area infrastructure improvements. The first phase will include 50,000 square feet of food and beverage space, according to a website created to promote the development.

The total project is estimated to cost $709 million and will be constructed in phases over a 10-year period, starting with a parcel situated along Lone Star Boulevard set to be completed in 2025. 

A rendering showing a conceptual aerial view of the Lone Star District. Credit: Courtesy / Midway and GrayStreet Partners

GrayStreet Acquisitions, a subsidiary of the development company GrayStreet Partners, purchased the property for $14.45 million in April 2020 through a bankruptcy sale. 

GrayStreet is partnering with Houston-based real estate developer Midway on the project and has requested $24 million worth of public infrastructure reimbursements and tax rebates through 2036.

During the first two years of the project, upgrades would be reimbursed up to $2 million 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. 

“This investment would reactivate a dormant, former industrial site,” said Verónica Soto, director of the City’s Neighborhood and Housing Services Department. It will help accelerate improvements to Lone Star Boulevard and create an additional north-south connection between that street and Steves Avenue, as well as create new public green spaces with access to the Mission Reach of the River Walk, she said.

Phase one of the Lone Star District master plan. Credit: Courtesy / Midway and GrayStreet Partners

Upon completion of the proposed 1,200 residential units, 20% will be reserved for affordable housing, Soto added. As part of the agreement, the City is proposing that the developer contribute $818,000 to the Affordable Housing Fund.

The current assessed value of the site is $10.5 million and the projected assessed value will exceed $700 million, Soto said, “so a big economic impact to the community.”

District 5 Councilwoman Shirley Gonzales said she recalls first talking about Lone Star redevelopment when she was pregnant with her son who is now 7 years old. The most recent of several failed redevelopment plans was one by former owners Lone Star Development after its partnership with Aqualand Development and CBL & Associates Properties fell through.

“So this project is near and dear to my heart, but it also tells you how long we have been waiting for some development at Lone Star,” Gonzales said, adding she’s more hopeful that the current plan will be successful because it’s starting small.

“When you have the right size for the first phase, it creates momentum for the later phases but it allows you to actually get started,” said Don Quigley, vice president at Midway. “When you are starting with something too large, it can be very difficult to get off the ground so I think we are being very practical about what we’re going to do out there in the first days but it is still very significant.”

The first phase is the “biggest ask,” he said, because of the site work that’s required to create access and for environmental cleanup. On April 24, firefighters responded to a call at the property and battled a blaze through the night. Another fire incident in late 2019 also caused extensive damage.

San Antonio Firefighters work to quell the fire and smoke at the Lone Star Brewery
San Antonio Firefighters work to quell the fire and smoke at the Lone Star Brewery Credit: Bria Woods / San Antonio Report

“I think it goes without saying but there are just a lot of hazards on that site today,” Quigley said. “Our plan is to selectively [demolish] the buildings that don’t have any historical significance, that don’t have any real utility long term so that we can expose the history that is there.”

The former swimming pool that many recall from Lone Star’s heyday, however, will not be restored. Instead, the outline of the pool will be marked and water features installed during phase two of the redevelopment. 

The developer has also committed to making improvements to the swimming pool in nearby Roosevelt Park and creating interactive displays and murals at the complex that will pay homage to the history of Lone Star.

“The goal is for somebody who’s been on site before when they were a kid … to walk over to that area, see the outline of the pool and the ground and the hardscape elements that kind of recreate that in a fun way, and say, ‘I remember swimming in that pool before,’ and having that immediate tie to history,” Quigley said. 

The Economic and Workforce Development Committee unanimously approved forwarding the proposal for full council consideration, and on Wednesday, Gonzales encouraged the Council to approve the agreement. 

“This will be a transformative project for the near South Side so I urge my council colleagues to give it a greenlight when it comes before them later this month,” she said.

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Shari Biediger

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