Pilot Program Takes Aim At Downtown’s Vacant Buildings

Print Share on LinkedIn Comments More
A large, vacant historical home on Nolan Street, right across the street from Dignowity Park. Photo by Iris Dimmick.

A large, historical home sits vacant on Nolan Street in District 2, right across the street from Dignowity Park in June 2013. Photo by Iris Dimmick.

A pilot program proposed by the City of San Antonio would create new tools and a more comprehensive ordinance to bring back to life many of the city’s vacant buildings that diminish the quality of life in neighborhoods, contribute to urban blight and crime, and represent disinvestment.

Lori Houston, director of the Center City Development Office. Photo by Al Rendon.

Lori Houston, director of the Center City Development Office. Photo by Al Rendon.

A presentation of the proposed pilot program and new ordinance  was made Wednesday by Lori Houston, director of the Center City Development Office, to the City Council’s Governance Committee, which includes Mayor Julián Castro and key inner city council members. Click here to see a full committee roster.

The new ordinance, which will be presented to the full City Council in B Session on June 4 and come up for a City Council vote on June 12, would take effect Jan. 1, 2015, giving city staff time to hire a small team to oversee the new program. The new staff would be funded by fees and fines that are part of the pilot program.

Click here to see the full presentation.

Director of the Office of Historic Preservation Shanon Miller

Director of the Office of Historic Preservation Shanon Miller

A task force of key city directors has been meeting since late 2013 to study the issue and craft a responsive ordinance, including  Shanon Miller, director of the Office of Historic Preservation and John Dugan, director of Planning and Community Development. Both were part of Wednesday’s presentation.

Vacant downtown structures and dilapidated residences in inner city neighborhoods have been a blight on the city’s many initiatives designed to revitalize the urban core. Efforts by developers to purchase some of the more prominent buildings have been unsuccessful. Vacant building owners take advantage of an exiting city code that does not requires exterior maintenance,   and outdated property evaluations and low taxes while they await a hoped-for sale to hotel developers.

Hedrick building photo from Google Maps.

The Hedrick Building. Photo from Google Maps.

The owners are not interested in converting their buildings to residential housing, Houston said, because current rent rates of $1.70 per square foot fall short of the $2 a square foot price that would make such projects viable for developers. So the buildings sit empty and detract from the overall appearance of some of downtown’s most important streets.

“Some of the property values are upside down,” Houston told the committee. “We live in a state where the codes favor the property owners.”

The now vacant Herpel-Gillespie Ford Dealership building at 901 E. Houston St. Photo from Regan Turner's report.

The now-vacant Herpel-Gillespie Ford Dealership building at 901 E. Houston St. Photo courtesy of the City of San Antonio.

Miller said there are at least 800 commercial and residential buildings in the downtown area and historic footprint of the city targeted in the pilot program. The owners of those buildings would be subject to a Vacant Building Registration Pilot Program starting in January 2015 that would require owners of vacant single family residential properties to pay a $250 registration fee and all other building owners to pay a $750 registration fee.

Buildings left vacant also would be subject to an annual inspection billed at one cent per square foot with a minimum fee of $50. Property owners who fail to register vacant properties would be fined $500, and those who fail to adhere to tougher minimum maintenance standards would face fines up to $500 a day. The fees and fines would encourage redevelopment, sale and building maintenance, and would fund the pilot program, Miller said.

Under the current code, “A vacant building only has to be secured,” Miller said. “It can be boarded up with plywood, upper floor windows can be broken. We don’t think that is acceptable.”

From the COSA Vacant and Underutilized Building Policy and Next Step presentation.

From the COSA Vacant and Underutilized Building Policy and Next Step presentation.

The pilot program and updated San Antonio ordinance in draft form offers a “carrots and sticks” approach. It would offer an array of incentives and support mechanisms to encourage vacant or abandoned property owners to upgrade or sell their holdings.  Failing that, the ordinance would include recommended measures, including new property evaluations, code enforcement, code enhancements and other tools that would  require property owners to act.

One “carrot” that city staff will highlight is the opportunity for historic property owners to recover up to 45 percent of their costs to upgrade buildings by applying for city and state tax credits.

“We don’t want to punish people, we want to educate people, working with our partners to do that kind of outreach … to make sure these buildings are redeveloped and occupied,” Houston said.

Mayor Castro asked about best practices in other cities, some of which are referenced in the presentation. Houston mentioned a bond program in Phoenix that helps fund historical building protection, and said the San Antonio ordinance is modeled on best practices already in place in El Paso, Dallas and Fort Worth.

Dugan said Baltimore has one of the nation’s most progressive vacant buildings programs.

Director of Planning and Community Development John Dugan

Director of Planning and Community Development John Dugan

The task force is not recommending adoption of a “Public Shaming” program like the one in place in Syracuse, NY. where the owners of blighted building are “outed” as a form of pressure to sell or improve their properties. The city’s new registration program, however, would require all vacant building owners to post their names and contact information on the outside of their buildings.  

District One Councilman Diego Bernal. File Photo.

District 1 Councilman Diego Bernal

“I think it (the pilot program) has just the right balance,” said District 1 Councilman Diego Bernal, whose district includes most of the 800 buildings. “What I like is that it’s not designed to just send a message, but it’s designed to produce results … If we want to go after the big vacant buildings downtown, we also want to go after the crack houses.”

A number of initiatives in recent years have brought an intensified focus on San Antonio’s downtown vacant structures and inner city neighborhood blight. Mayor Castro’s “Decade of Downtown” campaign, the formation of SA2020, and Centro San Antonio, all have contributed to a growing call for action.

Last year, Regan Turner, a San Antonio graduate student at Harvard, authored a thesis titled, “Moving the Market by Way of Policy Incentives and Best Practices: Redeveloping Historic Buildings in San Antonio’s Central Business District.

(Read more: Ghost Buildings Haunt “Decade of Downtown)

Turner’s project, presented to both the Harvard Kennedy School and the Harvard Business School, was prepared for the Office of Historic Preservation and the Center City Development Office.

From the COSA Vacant and Underutilized Building Policy and Next Step presentation.

From the COSA Vacant and Underutilized Building Policy and Next Step presentation.

Turner’s paper has been widely shared in the central city development community and is a must-read for anyone interested in the subject. We have included a PDF here that you can read online or download and print.

Wednesday’s presentation singled out several of the vacant downtown buildings that are carried on the Bexar County tax rolls at absurdly low valuations. Some examples:

  • The Hedrick Building at 601 N. St. Mary’s St. is reportedly for sale for $5 million, but is listed on the rolls at $1,000, with the riverfront property valued at $225,000.
  • The Herpel-Gillespie Ford Dealership building at 901 E. Houston St. is valued at $200 with the land valued at $682,930 (see photo above).

“The issue of assessments always come up, the mystery of why that one building is assessed at $100,” Miller commented.

The power to change the values on vacant buildings rests with the Bexar County Tax Assessor-Collector Albert Uresti’s office.

*Featured/top image: A large, historical home sits vacant on Nolan Street, right across the street from Dignowity Park in June 2013.  Photo by Iris Dimmick.

Related Stories:

Ghost Buildings Haunt “Decade of Downtown

Why I Closed Lunch at Restaurant Gwendolyn

Attacking Urban Decay: Take Back Neglected Property

Is San Antonio Ready for High-End?

13 thoughts on “Pilot Program Takes Aim At Downtown’s Vacant Buildings

  1. Other then his controversial stand creating a “recall” movement, bernal hasn’t done much. But since he and Castro are so close, and he wants to be mayor, I guess its time for him to something. Too little to late. Bring back term limits PLEASE!

  2. Diego Bernal has been the best thing to hit District 1 since forever. He has done amazing work in so many areas. I’m so glad he is my councilperson and he’d be an excellent mayor.

  3. What’s not being mentioned in this story is the simple fact that these blighted properties are keeping San Antonio Rent high. Image if more of the blighted properties came online, more housing would bring the cost down. There’s a reason why we have a housing crisis here in San Antonio, because it was manufactured.

  4. If it was up to me to transform downtown. It would look something like a city with 1 million people. {see photo for example}.

  5. Properties that are listed in the National Register of Historic Places are eligible for state and federal tax credits totaling 45% of total qualified rehab expenses. The new state tax credit was just created and leaves little argument for not investing in historic properties.

  6. An idea whose time has come… The next step is to connect those who are having a hard time financially maintaining their property with organizations that can help like Habitat For Humanity or HUD.

  7. Excellent collaboration between a university student and the city of San Antonio sharing resources to deal with such a pressing issue. Hope to see more cross-collaborating of this nature in the future. Thank you Regan Turner for your outstanding, thoroughly researched contribution and returning to SA to manifest change!

  8. Props to Regan Turner for laying the groundwork for SA progress and prosperity. Glad the city recognizes great ideas, especially when presented so succinctly.

  9. RR–I know that some of these owners are now facing fines, but has there been any update on getting the appraisal district to more accurately value these properties??? Just checked, and Hedrick’s taxable value went from $225,000 to $250,000 from 2014 to 2015. That’s pretty pathetic considering they’re asking $5mm for it for sale. BTW, the actual building is still only valued at $1,000. We need to make sure we are keeping the appraisal district accountable for their end of this problem. The asking sale price of Hedrick is TWENTY times the appraised value! That’s INSANE. It makes sense why the owner has never felt he needed to sell it. His taxes are less than those of most homeowners to just let it rot and wait for the market to improve even more!

Leave a Reply

Your email address will not be published. Required fields are marked *