Two long-abandoned building complexes on the East Side in downtown San Antonio made headway toward redevelopment this week.

It has been a year since the historic G.J. Sutton Building, a 112,000-square-foot landmark, was demolished to make way for its sale, and now that phase of its story has begun.

Half a mile east, owners of the nearly century-old Friedrich buildings said they are set to begin the long-awaited demolition at the end of the year of non-historic structures on the former manufacturing site to clear the property for a $68 million multifamily housing project.

The American South Real Estate Fund (ASREF), a California-based fund focused on revitalizing distressed communities, announced Wednesday it is providing $10.6 million in equity necessary to fund the $68 million Friedrich Lofts project.

With construction scheduled to start in early 2021, the 6-acre site at 1617 East Commerce St. will be turned into a 347-unit multifamily housing development consisting of units ranging between 625 square feet and 1,000 square feet. Half of the units will serve low- or moderate-income families and the other half will be leased at market rates, according to the ASREF announcement. The project also includes a 725-spot parking garage.

Friedrich moved its air conditioner manufacturing operations out of the area in 1971.

The original 1923 Friedrich building and others that were added on to the structure through 1956 are listed on the National Register of Historic Places. But City Council in 2015 approved the property owner’s controversial request to have the local historic designation removed from the buildings that weren’t original. Those will be demolished to make way for the apartment complex.

“The plant closure not only eliminated 600 jobs for San Antonians, it delivered a debilitating economic blow to the community,” stated Deborah La Franchi, ASREF managing partner. “Today, boarded-up retail and manufacturing still plagues the commercial corridor, contributing to a tragic 36 percent poverty rate. The Friedrich development will be an economic catalyst that reverses this decline and transforms it into opportunity for the local community.”

With ASREF as equity partner, the project is being developed through a public-private partnership between Dallas-based Provident Realty Advisors and the San Antonio Housing Trust Public Facility Corporation.

In September 2018, City Council approved a $2.3 million incentive package for the mixed-income housing project that includes $1,745,000 from the Inner City Tax Increment Reinvestment Zone, $500,000 in SAWS impact fee waivers, and $97,670 in other fee waivers associated with the Inner City Reinvestment and Infill Policy, which is aimed at encouraging development in underutilized areas in the urban core. 

Pete Alanis, interim executive director of the San Antonio Housing Trust, said the partnership had struggled to find equity investors to fill a gap in funding needed to close the deal. “There have been many attempts over the years to redevelop the site and transform it into a catalyst for East Side revitalization,” he stated. “The equity ASREF brought to the table was critical to closing this investment.”

The Friedrich Lofts project is ASREF’s fourth investment in San Antonio, La Franchi said, with the fund also investing in Haven for Hope, San Antonio Lighthouse for the Blind, and the San Antonio Food Bank.

Sutton Building

Ten million dollars is the asking price for a historic state-owned property now up for sale on San Antonio’s East Side. Commercial real estate firm JLL recently began marketing the two parcels of land that were home to the G.J. Sutton building at 303 N. Center and 715 E. Crockett streets. 

The three-story Sutton building, constructed in 1912, was razed just over a year ago after the state passed legislation that allowed for its sale and demolition. 

Demolition of the Sutton Building along Cherry Street took place in August 2019. Credit: Scott Ball / San Antonio Report

Named in 1982 for Garlington Jerome Sutton, the first black official from San Antonio elected to the Texas House of Representatives, the former manufacturing complex was acquired in 1975 by the State of Texas. The industrial-scale building was used for state offices until 2013 when it was vacated due to serious ongoing maintenance needs and safety issues.

Texas House Bill 2944 requires that any new structures built on the property must retain the name “G.J. Sutton.” At the time of the demolition, which caught local preservationists by surprise, architect Everett Fly said having Sutton’s name on a state building gave context to his legacy. But putting it on a different building might cheapen its significance, he said.

“The site presents a prime development opportunity in the city’s emerging urban core that is experiencing a resurgence of growth from residents and companies alike who are choosing to live and work downtown,” stated Robert Arzola, multi-housing director for JLL, who is representing the Texas General Land Office in the sale.

In marketing the property, JLL advertises the 5.9-acre site as being situated within walking distance to St. Paul Square, the Alamodome, and Hemisfair Park.

“We are marketing the property for the highest and best use, which we feel is multifamily in today’s market,” Arzola said. “We have plenty of interest from several developers, multifamily, commercial, mixed use … you name it. A couple of local groups and some out of state developers. No offers yet as our call for offers date is at the end of next month.”

In recent years, the long-neglected area has seen a resurgence of development that includes new residential and commercial properties, hospitality and office spaces, VelocityTX, a nonprofit tech accelerator program, and a mixed-use development known as East End that will replace the RK Group’s offices and its parking lot near Sunset Station.

District 2 Councilwoman Jada Andrews-Sullivan said several universities have discussed using the G.J. Sutton site for an Eastside campus extension. “The vision in mind for the G.J. Sutton property is to see a form of higher education institution with multifamily and retail use,” she said.

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Shari Biediger

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