The City of San Antonio and Bexar County are looking for developers and investors interested in purchasing and revitalizing key properties spread over more than eight downtown acres, including the Central Texas Detention Facility, the former Continental Hotel on West Commerce Street, and several surface parking lots.
This particular downtown sector already has attracted hundreds of million of dollars in confirmed private sector and publicly funded projects, including Weston Urban's new Frost Bank Tower and hundreds of residential units, the county's $175 million San Pedro Creek Improvement Project, and the $135 million federal courthouse .
Interest is expected to be keen, although valuations have yet to be determined or disclosed, and there is bound to be a gap between the prices local officials hope to realize and the prices developers hope to pay. The former Continental Hotel, now home to the offices of Metro Health, originally was part of the public-partnership deal with the City, Weston Urban and Frost Bank, but disagreement over its value led the developers to drop it from their proposal.
San Pedro Creek will flow right by and through some properties, with landscaped creek paths, artful lighting and new frontage attractions like restaurants, cafes and bars serving to attract new downtown residents and visitors. Weston Urban and its development partner KDC of Dallas expect to break ground this fall on what will be the first new office tower downtown since 1989. The new federal courthouse was finally funded in the current U.S. budget and final design work is underway. A $60 million apartment complex is proposed nearby.
The for-sale properties are within the Zona Cultural, a cultural district designated by the City and Texas Commission on the Arts, which is attracting street improvements and a coordinated branding campaign to the neighborhood.
Two different requests for interest (RFIs) are expected to be published on the City's website on Wednesday, April 6. Exact dates are subject to change, but the City plans to host a pre-submittal information conference on April 25. The tentative deadline for proposals will be May 24 by 2 p.m. City Council and Bexar County Commissioners Court will likely consider submissions this fall.
“San Antonio has experienced a rapid resurgence of activity in the center city over the past decade ranging from the revitalization of parks and civic space to the redevelopment of underutilized assets in the downtown area,” stated Mayor Ivy Taylor in a news release sent out on Monday. “This new growth is the result of people choosing to live and work in an urban center that celebrates the past, present and future of a vibrant community. Therefore, it is with great excitement that the City of San Antonio and Bexar County have decided to offer an extremely unique opportunity to redevelop these properties located in the heart of downtown.”
San Antonio Metropolitan Health District is moving out of the City-owned historic hotel at 332 W. Commerce St. to join other departments in the Riverview Tower across from Main Plaza, allowing the City to sell the property. The City would like to see proposals for mixed-use workforce housing in the 35,000 sq. ft. building that sits on just more than one acre of land, said John Jacks, interim director of the Center City Development and Operations Department, during an interview with the Rivard Report last week.
"It’s outlived its life for office use,” Jacks said of the 1890s building. "The maintenance and upkeep doesn't make financial sense."
The consolidation of City staff and services to achieve greater efficiencies and improve productivity is a priority. Part of the Weston Urban P3 deal includes the City acquiring the existing Frost Bank Tower once it is vacated.
"This would free up (the Continental Hotel) to be redeveloped into something much bigger and better than city offices," Jacks said, adding that because it's an historic building, demolition is off the table – but the surface lot behind the narrow hotel represents an expansion opportunity.
The other RFI will be for three lots; a surface parking lot, a lot with some parking – both owned by the city – and the largely County-owned block between them that hosts the county jail complex, operated by GEO (formerly Wackenhut) on Nueva St.; Bexar County Fire Marshals office; and a former Bexar County annex building. Casa Navarro, a state historic site that honors José Antonio Navarro, takes up the southwest corner of the block and is not included in the deal.
"We knew the county wanted to move out … and really any surface parking lot is always seen as a potential for redevelopment," Jacks said. The RFI doesn't require a proposal that utilizes all three lots, but the City and County is asking for proposals that include mixed-use – housing and commercial – development. A proposal for the Continental Hotel that includes ground level commercial in addition to workforce housing would also be welcome, he said.
The privatized former county jail will be vacated by 2017 and none of the county buildings are designated historic, offering a rare opportunity for new construction on a sizable lot. There are no limits on density or height, but there is downtown historic and design guidelines that any proposal will have to take into consideration, Jacks said.
The best proposals, he added, would compliment and connect to the nearby amenities, especially San Pedro Creek.
"We would be disappointed in (proposals) that didn't include an opening up to the (San Pedro) Creek," he said. "I couldn’t imagine a proposal that just ignores it.”
Depending on what's proposed, both developments would be eligible for City and County incentives including the City's Center City Housing Incentive Policy, Inner City Reinvestment and Infill Policy, Westside Tax Increment Reinvestment Zone, and County tax abatements.
"If it turns out to be something other than housing," said City Redevelopment Officer Ramiro Gonzales, the City could build a "custom incentive package based on the needs of the project."
"In my opinion, the best use would be housing," Gonzales said. "The constant challenge is where do you put that kind of density downtown? New (housing) construction has better chance of performing (well).”
There is a solid base of public and private investments in the area already including the new Public Safety Headquarters, Children's Hospital of San Antonio's expansion, the aforementioned federal courthouse, and the County's Commissioner Elizondo Tower that represents 1.5 million sq. ft. of new commercial construction, said City Real Estate Manager Ryan Kuhl.
"You don’t get seven acres in the middle of downtown – or a century old hotel for that matter – with (almost) $380 million capital investment next door very often,” Kuhl said. "This quadrant of downtown is really taking off.”
After the RFIs are reviewed by City staff, the City has the option to issue a formal request for proposals this summer or proceed directly into negotiations based on the submitted RFI. Jacks said there weren't any recent appraisals of the properties, which are likely to be worth into the millions, but that process would be activated once a legitimate proposal was submitted or the RFP process began.
"We're leaving it open," Jacks said. "If we get a great submittal from the RFI, we could proceed straight to negotiations. Or if we get three or four great submittals we could invite them to submit RFPs. We always have the option to star over, but with all the interest downtown, I think we're going to see some great proposals."
This story was originally published on Sunday, April 3.
Top image: More than eight acres of prime downtown property, including the Central Texas Detention Facility, surface parking lots, and the former Continental Hotel, are part the City's soon-to-be-released requests for proposals. Photo by Iris Dimmick.