The Downtown Alliance presented its final “Urban Renaissance” luncheon at the Hyatt Regency on Monday, the last of four programs in 2012, this one titled, “The State of Downtown.” Three speakers presented snapshots of the visitor industry, the trends in center city commercial real estate activity, and the robust growth of center city residential developments.
- The center city is alive with cool new residential venues with more projects ready to leap off the drawing boards and into construction. About 1,500 new units have been built or are under construction since the SA2020 goal of adding 5,000 new units was announced. Still, everyone goes to sleep at night wishing for a downtown grocery store. So far, lots of dreaming.
- Downtown commercial real estate showed slight gains year-over-year, especially in the five Class A Towers, but 27 percent of the downtown’s five million square feet of space remains available, one-third of it left over from AT&T’s surprise departure for Dallas in 2008.
- The convention and visitor industry remains a stalwart of the local economy, employing 112,531 people, representing one in eight jobs in the city, $12 billion in economic activity and $300 million in taxes and fees to local government. Growth for 2013 is predicted at three percent, and the expansion of the Convention Center by 2016 should keep the city competitive in the national marketplace – but Austin, Dallas and Houston also are making significant investments in their downtown facilities.
“It’s certainly an exciting time to be downtown,” Trish DeBerry, CEO of the DeBerry Group, told the audience in her welcoming remarks. Referring to a big center city project with fierce proponents and opponents, she added, “Streetcars are coming and that will be transformational. Streetcars are coming and coming in a very big way.”
DeBerry was followed by the program’s three followers, Casandra Matej, executive director of the San Antonio Convention & Visitors Bureau; Lindsey Tucker, vice president of CBRE-San Antonio, which represents the Weston Centre and other downtown office spaces; and Dennis McDaniel, president of Austin Fairchild Management Company and developer of the historic Steel House Lofts on South Flores Street.
Matej put up some heartening numbers, as noted above, and spoke to an audience that both embraces the visitor industry but also wants to see a more vibrant center city for residents.
“When visitors come here, they want to go where the locals go, so we are thrilled with all the downtown revitalization,” she said.
Matej said the San Antonio MSA attracts 28 million visitors annually, putting it on par with Chicago and making it one of the nation’s top 15 urban destinations. She cited several projects underway that will help grow the number of annual visitors: The Tobin Center for Performing Arts, scheduled to be opened in the Fall 2014; The redevelopment of Hemisfair Park, scheduled to occur over the next decade; and continued improvements along the San Antonio River and the pursuit of UNESCO World Heritage Site designation for the Old Spanish Missions.
Tucker’s look at commercial real estate trends was a reminder of how seriously businesses were affected by the Great Recession that arrived in 2008. Only months earlier, AT&T stunned city leaders by disclosing closely held plans to move its corporate headquarters to Dallas. More than 430,000 square feet of office space on McCullough Avenue vacated by the telecommunications giant still remains unleased. Still, there has been a net gain of 22,000 square feet leased downtown this year, with new arrivals outnumbering departing tenants. Two corporate relocations to downtown, Argo Group and Visionworks, were notable, and the Weston Centre also is adding several new tenants who will occupy more than 30,000 sq. ft. Geekdom, the technology incubator that now occupies the high-rise’s 10th and 11th floors – was cited by Tucker as exemplifying how traditional office schemes are giving way to more open and collaborative floor plans.
McDaniel described the Steel House Lofts project – which he launched several years ago as a condominium project that changed to loft rentals – as the most challenging and rewarding of his career. The restaurant, Frutería, owned by Chef Johnny Hernandez of La Gloria fame, is set to open in the building on the street level in the next month. McDaniel talked about his own project in the context of many similar developments that have opened recently or will open in the next year: 1221 Broadway, The Vistana, the Can Plant at Pearl, 1800 Broadway, The Mosaic on Broadway, the yet-to-be-named River North residences that Hixon Properties is building across from the San Antonio Art Museum; Embrey Partners, which is building the Can Plant, has another near-Broadway project ready to launch called The Brackenridge, which will be built behind the new San Antonio Children’s Museum on Broadway; and NRP Properties’ Cevallos Lofts in Southtown and the company’s Tobin Lofts at San Antonio College, now leasing and under construction.
It’s a great time for people wanting to move downtown or to one of the surrounding neighborhoods. Increasingly, the center city will be alive with locals mixing with visitors. Will more companies bring their offices and jobs downtown to fill empty office space? That looks like the big challenge for 2013.