The City of San Antonio has had a lien on the building since 1995, according to Assistant City Manager Lori Houston. The building owner, RELEE Partners, failed to pay back a 20-year term loan, but instead of collecting on the potential sale of the building, the City will absolve the $300,000 loan to make sure the building remains a low-income housing option.
“The City is willing to forgive the loan, provided money goes back into the investment, but it won’t happen until (RELEE Partners) show they have the financing to rehab the building,” Houston said in a recent phone interview. “It’s an affordable housing project and they are planning on bringing in a first-floor tenant. Once they have an architectural rendering, then the City will move forward with the agreement.”
To satisfy the City’s terms of the loan forgiveness, Houston said the owner must apply for and utilize tax credits, such as the state’s 4% low-income housing credit, to renovate the apartments and maintain them as workforce housing.
“The same partners have owned the building for years. It will be like a major home improvement project,” she said. “We don’t want to displace any affordable housing in downtown.”
City Council’s Housing Committee approved the application for tax credits by RELEE Preservation Associates, a company formed in mid-June by JHM Group President John McClutchy and Principal Todd McClutchy.
“We had worked through a number of different scenarios for the building, and we decided to renovate it and create and enhance the street-level space for the property,” Todd said in a phone interview. “A big part of our business, especially with these older buildings, is to not displace current residents. We will try to do as much of the renovations as possible with residents still living there and then we will find off-site housing as needed. Those people will then have the ability to come back.”
Todd listed several potential renovation projects including new mechanical equipment, cabinetry, carpeting, fresh paint, low-flow faucets, and energy efficient features.
The 10-story apartment building was built in 1922 as a hotel. 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 and was renovated for use as apartments in the ’90s.
Michael Guarino, chair of the Historic and Design Review Commission (HDRC), said in a recent phone interview that buildings such as the Robert E. Lee and the Maverick Building are going to form the core of updated workforce housing options downtown. The Maverick Building was purchased in December 2014 by AREA Real Estate and Lake|Flato Architects principals David Adelman and David Lake, respectively, and is expected to be finished this fall.
“The (Robert E. Lee building) is still in fairly good shape. In the earlier work that was done with it in the 1990s, nothing really bad was done to the exterior of it. I think it’s really ripe for this kind of renovation,” Guarino said. “The idea is to maintain the apartments at their current size, which is a good idea because that should keep them within the realm of affordability.”
Guarino said that he is excited about the prospect of a first-floor tenant – one he hopes is a restaurant or a food store, due to the increasing number of office workers in the area. This population is likely to increase in the near future, Guarino said, with the opening of the new Frost Tower slated for 2018 or 2019, and the transfer of city employees from the Municipal Plaza building to the current Frost Tower building.
“The (developers) talked about animating the ground floor, which really desperately needs something going on in it,” Guarino said. “When the Frost Tower is built and there’s more activity around the park there, there’s going to be a fantastic edge to that.”
The planned Frost Tower is not the only change slated for downtown. Efforts by multiple developers are underway to bring more businesses and housing to the area, too.
The developing San Antonio Tech District is taking shape with the offices of Geekdom and Rackspace’s Open Cloud Academy located in the renovated Rand Building, and the announcement of CAST Tech, a technology-focused high school to be located on or near East Houston Street.
The City and County are leading the effort to transform 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).
In June, City Council voted to shrink the boundaries of the CCHIP to focus resources on the Central Business District. Guarino said that this move is a promising step toward revitalizing downtown’s older buildings, especially for developers who are struggling to find state tax credits for redevelopment and renovation projects.
“I don’t know yet what the implications are of the City redirecting its incentives downtown, but I think that’s very exciting. The idea that they may be concentrating those benefits in areas exactly (like) that would benefit buildings like the Robert E. Lee (Apartments),” Guarino said.
The City’s CCHIP gives developers another tax credit option for when state tax credits are not granted, Guarino said, or for when developers “find the (state’s) red tape so discouraging that they aren’t even trying.” CCHIP also encourages lower market prices because the significant cost of construction is lessened by the additional tax credits.
The Robert E. Lee’s owners, however, will not qualify for CCHIP as they are renovating the existing units, not building new ones.
Top Image: The Robert E. Lee Apartments at 111 W. Travis St. in downtown San Antonio. Photo by Scott Ball.