Primera Partners, the San Antonio-based owners of the 20-story Riverview Towers at 111 Soledad St., submitted a Public-Private Proposal Friday afternoon with the City of San Antonio, one hour before the deadline passed for counter-bids to the Weston Urban-Frost Tower proposal made in June.
“We did receive a competing proposal on Friday at 3:53 p.m., very last minute,” said Debbie Racca-Sittre, the City’s assistant director of the Transportation and Capital Improvements Department. “So far, all I’ve done is schedule a meeting with the committee.”
The City’s so-called P3 Committee, which is made up of representatives from the offices of the City Manager, City Attorney, the Finance Department, Department of Center City Development and others will now meet to review Primera’s proposal and decide whether it merits serious consideration or should be rejected. If it does receive committee approval, the next step will include financial analysis, a building appraisal and other due diligence that could take up to 30 days.
“That’s going to take some time to do our due diligence,” Racca-Sittre said. “If the committee rejects the proposal outright, there’s not a lot to do, but if the committee wants to do financial analysis and wants a building appraisal, it’s open ended. The committee could decide to accept both proposals, just one proposal, or neither proposal.”
The City already has expressed serious interest in the Weston Urban-Frost Bank Tower proposal, which was unveiled at a hastily-called press conference in the waning days of the administration of Mayor Julián Castro in late June that was attended by Mayor Castro, senior City staff members, City Council members, and representatives of Weston Urban and Frost Bank.
This is San Antonio’s first experience with an unsolicited P3 bid. The process has only existed since the 20111 Texas Legislature passed a law encouraging public-private partnership development deals as a means to spur urban core redevelopment. City Council passed its own Resolution in 2012 enabling P3 deals in the city, and since then there have been three solicited P3s.
City employees are now located in five different downtown locations, including Riverview Towers. Primera’s proposal presumably puts the entire Riverview Towers building in play in concert with other City properties, although no details of its proposal have ben made public.
The City posted the Weston Urban/Frost Bank proposal on its website on Aug. 18 at the same time a 60-day period for counter-bids was started. Under the P3 rules, however, the City will not disclose the details of Primera’s counter-bid without permission. In this instance, Racca-Sittre said Primera requested that details not be shared with the Rivard Report.
(Read more: City Releases Weston Urban-Frost Bank Tower Proposal.)
It’s one aspect of the program that may surprise some: Primera gets to scrutinize the Weston Urban-Frost Bank proposal in an effort to better it, while Weston Urban/Frost Bank has no access to the Primera proposal.
“The P3 process requires us to post on the Internet any unsolicited proposal so others can consider submitting better offers,” Racca-Sittre said. “When you get a competing offer, you are not required to post it. In this case, we asked Primera Partners and they had an issue with letting you see it.”
Chuck Brown, the general partner for Primera, could not be reached for comment Thursday morning. Primera is a privately-held partnership that owns and manages commercial real estate properties in San Antonio. Riverview Towers, built in 1982, is the firm’s only major downtown building.
Much is known about the Weston-Urban/Frost Bank Tower proposal that would add the first new Class A tower to the city’s skyline since the opening of the Weston Centre more than 25 years and generate a breathtaking wave of downtown development north of Main Plaza in western downtown.
“This is a major development that literally has the opportunity to change the landscape of downtown,” Castro said at the June conference. “It has been more than quarter century since our downtown skyline has had a new office tower.”
Weston Urban said the project also would add at least 300 new residential units to the downtown market.
Here are the key elements of the Weston Urban proposal:
- The City would convey to Weston Urban, the real estate development business owned by Graham Weston, non-executive Chairman of Rackspace, several historic properties for redevelopment, including the Municipal Plaza Building, the Continental Hotel now occupied by Metro Health, and its parking lots; 319 W. Travis St. (the former San Fernando Gym); and a strip of property on 22 N. Main Avenue.
- Frost Bank would convey the existing Frost Bank Tower and 732-space Garage to the City and its other downtown properties, including undeveloped land and the Frost Motor Bank, to Weston Urban.
- Weston Urban would construct a new office tower to serve as Frost Bank’s new corporate headquarters on the current site of the Frost Motor Bank and its surface parking lot located on the northwest corner of North Flores and Houston Streets. Frost Bank would lease the office space from Weston Urban.
The new tower would include a new parking garage. Riverview Towers does not have a parking garage, which could prove to be a significant deficit in its counter-bid with the City. The lack of Class A office space and parking is often cited as a major hindrance to attracting more companies and professional jobs to the urban core.
For the City, acquisition of the Frost Bank Tower would allow for consolidation of city workers now dispersed in five different buildings, and saving of $3.4 million in annual rental leases. The deal would place 1,100 city workers in three buildings: historic City Hall, Plaza de Armas, and the Frost Tower.
City officials have said that any P3 proposal involving its properties will have to be revenue neutral for the City, meaning it does not want to contribute cash to the deal.
Correction: An earlier version of this story stated that the Weston Urban proposal was the first P3 in San Antonio. In fact, it is the first unsolicited P3. There have been three solicited P3s in the city.
*Featured/top image: From left: view of Frost Bank, Riverview Towers, and the Weston Centre from Main Plaza. Photo by Iris Dimmick.
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Hmmm. Very interesting.