City Council members voted overwhelmingly in favor of supporting a developer’s application to the State for a 4% tax credit to acquire, rehabilitate, and refinance the Robert E. Lee Apartments at 111 W. Travis St. Some Council members expressed concern over whether the apartments will remain affordable once the renovations are complete.
RELEE Preservation Associates, the owner and developer of the building, was formed in mid-June by JHM Group President John McClutchy and Principal Todd McClutchy. The development firm is based in Connecticut.
City Council’s Housing Committee approved the application for tax credits by RELEE in July.
Mayor Ivy Taylor said that she wants to ensure that the apartments remain affordable.
“Many of the people that do live in this property are not anywhere near that 60% of area median income. They’re probably living on fixed incomes with very, very small monthly incomes – so if there is a possibility that (rent will rise), they may not be able to reside there,” Taylor said.
“(However), if we were to oppose this developer making improvements, all that means is that we stand by and watch the property continue to deteriorate. Yes, people will (continue to) be able to pay a very low amount – unfortunately here in the United States of America that has been our affordable housing policy: that deteriorated, substandard housing is what is available to the poorest of the poor.”
Taylor also acknowledged that the owner could sell the building to a hotel or market rate housing developer, but added that she doesn’t think leaving “a very visible building in the middle of downtown to deteriorate is a very palatable option.”
The City previously decided to renegotiate a 20-year loan agreement made to the building’s owners in 1995 that is now technically in default.
Assistant City Manager Lori Houston stated in a previous interview with the Rivard Report that while the City has a lien against the property, it is in the best interests of the City and the building’s residents for the historic building to be renovated and for the repayment terms to be extended.
The 72-unit, 10-story former hotel was built in 1922. Its iconic neon sign served as an indicator to passers-by that it was one of the first buildings in San Antonio with air conditioning. The hotel closed its doors in the 1970s.
The building, which now houses low-income residents, many of whom are elderly or disabled, was renovated for use as apartments in the mid-‘90s.
Councilwoman Rebecca Viagran (D3) asked what a vote against the application for tax credit would mean for the building.
Houston replied that support of the Council was necessary for the application to move to the State, and cautioned that inaction could mean that the current owner will sell the property.
Viagran remained concerned that disabled senior citizens would be at a disadvantage regardless of whether the project receives the tax credit.
“I’m kind of at a loss right now with this,” she said, adding that she felt that Council members had been backed into a corner on the matter. “You’re telling me … no matter what … not everyone is going to be able to stay there?”
“We would have no control over whether or not (it remains affordable),” Houston said. “It could be sold for a hotel; it could be sold for a market rate apartment project. This allows us to continue with the developer as a local housing partner and to make sure we keep these units affordable – 60% or below area income.”
RELEE has agreed to ensure that no one is displaced, Houston said, and that the building will be renovated, including the ground floor which will be activated with retail space.
Todd McClutchy said in an interview with the Rivard Report in July that potential renovation projects would include new mechanical equipment, cabinetry, carpeting, fresh paint, low-flow faucets, and energy efficient features.
Councilman Ray Lopez (D6) said that there are three possible outcomes for the building: either the building stays as it is, it gets turned into something else, or the Council supports the application.
“This is the best we can do for them to make sure that these apartments are successful,” he said in support of the third option. “These are the most vulnerable people in our community.”
Councilman Ron Nirenberg (D8) said that he passes the building each morning on his commute.
“What I see is a deteriorating facility with a distressed landlord in the crucible of growth (downtown),” Nireberg said. “I’m very happy that the City is exerting its authority in providing this resolution for a tax credit.”
The City and County are leading the effort to transform nearby San Pedro Creek into a linear park, and the City is working to bring housing back to the city center through the Center City Housing Incentive Program (CCHIP). The Robert E. Lee’s owner, however, will not qualify for CCHIP as it is renovating the existing units, not building new ones.
Efforts by multiple developers are underway to bring more businesses and housing to the area, including the planned Frost Tower.
Councilman Rey Saldaña (D4) said that he did not have any issues supporting the application for tax credit, but that he wanted to be sure that the agreement with the owner is clear.
“I just want to make sure we’re not being presented with a false choice,” Saldaña said.
Houston said that if the Council did not support the tax credit application, the building would list at market rate and the City would have no control over pricing.
Saldaña asked that Houston report back to City Council with a timeline for the allocation process and the retention rate for residents in the apartments.
City Council voted to support the tax credit application. Viagran cast the sole vote against the measure.
Managing Editor Iris Dimmick contributed to this report.
Top image: The Robert E. Lee Apartments at 111 W. Travis St. in downtown San Antonio. Photo by Scott Ball.