City Manager Sheryl Sculley on Tuesday approved the controversial mixed-use project north of the Hays Street Bridge on San Antonio’s near East Side after nearly a year of rejections, revisions, and divisiveness.

Sculley’s decision would allow construction of a proposed five-story building at 803 N. Cherry St. The project will feature retail space on the ground floor in addition to approximately 147 apartments. It also will include a .2-acre pocket park, open to the public, next to the historic Hays Street Bridge.

After the City’s Historic and Design Review Committee twice denied the project approval, Sculley in March overruled the committee, granting administrative approval with 11 conditions. Of those, eight remain with the three omissions being among the most important to the project’s opponents.

While developer Mitch Meyer of Loopy Limited said he believes he will finally be able to move forward with the start of construction in six months thanks to Sculley’s latest approval, opponents of the project await court decisions they say could still stop it.

“I approved the project after recommendations from my [Office of] Historic Preservation staff and my downtown development team, who had recommended this project, which the [City] Council had approved several times,” Sculley told the Rivard Report on Wednesday. “I gave them 11 conditions and said go negotiate with the neighborhood. They did that and they’ve reached an agreement, and so I approved it [Tuesday].

“The eight conditions that remain are really related to construction as they go forward.”

Some space between the restaurant and leasing office as part of the project would remain "public space," according to developers.
This rendering shows the proximity of the Hays Street Bridge to the proposed apartment complex. Credit: Courtesy / Loopy Limited, GRG Architecture

The Dignowity Hill Neighborhood Association (DHNA), which represents residents most affected by the project, has given its approval after a series of meetings and discussion in May with Meyer. The DHNA gave its approval even though Meyer was not willing to meet several key concerns, including a public portal in the design of the building be repositioned so the public can have a view of the bridge.

“What you see is what you get but there is a lot more behind the scenes, a lot more on the inside and a lot more work to be done that people don’t realize,” said Meyer, who partners with Alamo Beer Company owner Eugene Simor on the project. The $8 million brewery, one of the first major investments in the East Side, sits on the other side of the bridge. Supporters of the mixed-use development have said it would help improve the area’s tax base and mitigate crime and vagrancy issues.

Meyer said changes are being made, including addressing the facade on Cherry Street, breaking up the canopy, and adding “an industrial component on the side of the apartments that faces the bridge, so they talk to each other.”

The land on which the project would be built is the subject of a lawsuit brought against the City by the Hays Street Bridge Restoration Group. The group says the City violated a memorandum of understanding it agreed to when the previous owner donated the land to the City. The agreement called for the land to be turned into a park, according to the restoration group.

That “open space,” Sculley wrote in a July 3 letter to Meyer, “is critical to the consideration of the request.”

In 2014, a Bexar County jury issued a split decision, agreeing with the restoration group that the city “failed to comply” with the memorandum of understanding. It also sided with the city saying the property at 803 N. Cherry was not “owned, held or claimed as a park.” A judge ordered the city to apply all funds from the sale of the Cherry Street property to bridge restoration costs. The city complied with that order.

But later the Fourth Court of Appeals overruled that decision saying the City could not be sued because it is protected by governmental immunity.

The Texas Supreme Court will hear oral arguments in the case Sept. 13 and would likely issue a decision later in the fall. In the meantime, an attorney for the restoration group also has filed a motion in district court asking the City to refrain from issuing any approvals for the project and to issue a stop-work order on any approvals that have already been issued.

However, District Court Judge Laura Salinas on Monday denied a request by the group to delay construction permits for Meyer’s project until the court rules.

In a July 3 letter to Sculley, City Attorney Andy Segovia said the restoration group’s legal action “in no way” restrains the City “from proceeding with issuing any decision with respect to the project.”

Amy Kastely, the restoration group’s attorney, said the district court decision could come within days. Kastely said she had little faith in the process outside of the courts.

“We continue to be angry and frustrated by the City’s obvious corruption and obvious lack of any transparency, even any integrity in making these decisions,” Kastely said. “It’s clear that the developers will get whatever they want despite what’s good for San Antonio and what’s good for the community. Any reasonable person watching this City government is going to conclude that the City government is for monied interests and not for the community.”

The HDRC, an advisory body to the Office of Historic Preservation, rejected the project on two separate occasions after some Dignowity Hill residents and others who don’t live in the area protested that it would block views of the historic bridge and boost rising property taxes in the area among other complaints. But Sculley then took the unusual step of overruling the HDRC and giving conditional approval provided it met the 11 stipulations she outlined at that point.

About 40 people attend a vigil at the Hays Bridge.
Protesters gathered on the Hays Street Bridge to voice concerns over an apartment complex proposed for the adjacent lot in March. Credit: Scott Ball / Rivard Report

Sculley said she has only overruled the HDRC twice in 12 years as city manager with this case being the second time.

“I understand and respect that there are different points of view among the neighborhood reps, but we’re trying to do what’s good for the community and that I am sure is subject to interpretation,” Sculley said. “But in the end, this is something that was worked out with the neighborhood leadership.”

In the midst of the controversy, the DHNA went through leadership changes. Its current President Chris Barrows, who took office on April 1, replaced the existing six members of the association’s Architectural Review Committee shortly after Sculley gave the initial approval in March.

Meyer said he is not worried about the remaining legal challenges because he doesn’t believe they will prevent the project from moving forward regardless of how they are decided. He said if he had it to do over again, he might have done some things differently since he first unveiled his plans, but he is happy to have received the go-ahead from the City.

“I didn’t realize I was walking into a blast furnace,” Meyer said Wednesday. “But my job is to see these things through. Yes, it was a lot more problematic than I ever anticipated but I think we have a good project.

“I think it’s great for the East Side. I think it will completely spark that area.”

Hanna Oberhofer contributed to this report.

Kyle Ringo

Kyle Ringo is a freelance journalist based in San Antonio. He has covered business, college athletics, the NBA, NFL and Major League Baseball for numerous publications and websites.