Imagine CPS Energy, the San Antonio Independent School District and Alamo Colleges all building new headquarters in downtown San Antonio. Imagine the San Antonio Water System (SAWS) selling its headquarters at 2800 U.S. 281 North, the former Valero corporate offices, and moving downtown alongside CPS Energy.
These ideas are not so far-fetched. CPS Energy, SAISD, and Alamo Colleges all have outgrown their existing facilities and operate inefficiently with widely dispersed workforces. SAWS, which acquired the expensive Valero building on U.S. 281 at a steep discount more than a decade ago, arguably could turn a profit on a resale while returning to the central city.
The premise of this proposal, of course, is that taxpayer-supported, white-collar jobs should be located downtown. If all four entities supported that goal, there would be net gain of more than 1,000 jobs added to the downtown workforce and, inevitably, more of the employees would move closer to where they work, adding much-needed residential density to the urban core.
Most major cities concentrate their civic institutions and workers in the urban core. Given adequate and appropriate office space, San Antonio has the opportunity to do the same at relatively little cost to taxpayers. Some civic employees who never should have left the center city can be brought back.
The coming redevelopment of the western/northwestern sectors of downtown, led by the public-private partnership deal among Weston Urban, Frost Bank and the City of San Antonio and the San Pedro Creek Improvement Project, together create a unique opportunity for San Antonio to develop a new downtown Civic District that eventually would include federal and county courthouses, the Public Safety Headquarters, City of San Antonio offices and the above-named organizations.
CPS Energy has been looking for a headquarters solution since 2011, one that would allow the utility to bring hundreds of more workers into the central city. CPS Energy announced the resignation of President and CEO Doyle Beneby last month, but that has not stopped the search.
CPS Energy is said to be looking at a Weston Urban parcel located on or near San Pedro Creek among the three leading downtown parcels its executives are eyeing for a new headquarters. SAISD owns the nearby former Fox Tech High School campus on San Pedro Creek. The campus is large enough to accommodate a new administration building and to showcase a new, high performance high school that would attract young professionals who now hesitate to enroll their children in SAISD public schools. Alamo Colleges has had an on-again, off-again interest in a new headquarters, but as San Antonio’s community college system continues to grow, a new headquarters seems inevitable.
All three entities own real estate assets, including their current headquarters, that can be swapped or sold to reduce the cost of new headquarters. All three would operate far more efficiently with centralized staffs in well-designed venues. That was the primary attraction to the city when it entered into a P3 agreement with Weston Urban and Frost Bank. The City will acquire the existing Frost Bank tower in the deal, allowing it to centralize employees now scattered at multiple locations, and because of its other real estate holdings, it aims to make the move on a “revenue neutral” basis.
The construction of new headquarters and the redevelopment by others of the former headquarters of the three entities would be an economic boon downtown, providing new jobs and adding to the city’s infill development momentum.
The second half of the Decade of Downtown holds the promise of a San Antonio city center we can hardly imagine today. To the east, Alamo Plaza and parts of Hemisfair will be redeveloped. The Henry B. Gonzalez Convention Center expansion will be completed. To the west, the one-mile downtown stretch of San Pedro Creek will be finished, and the new Frost Bank Tower will be built, the first new office tower on the city’s skyline since 1989. The old Frost Bank Tower will be updated and reborn as the new home of city government by then.
Winning the release of long-delayed funds in the U.S. Congress to build the new federal courthouse on Nueva Street, where the former police headquarters stood, would consolidate dispersed federal workers and give the City 4.6 acres on the southern flank of Hemisfair for continued redevelopment of the park.
Weston Urban controls nearly 20 acres of downtown property in or near San Pedro Creek and along Pecan, Travis, Houston and Commerce streets. Some of the properties will become home to the 265 residential units that Weston Urban has committed to develop. That leaves plenty for other projects. Other East Houston Street properties, including David Adelman’s Maverick Building and the seven historic buildings GrayStreet Partners bought from Federal Realty, will add hundreds more residential units. In time, there will be more restaurants, bars, coffee shops, retail, and people, day and night.
Former Mayor Julián Castro made residential density a cornerstone of his Decade of Downtown. That initiative has led to the development or planned development of a few thousand new residential units along Broadway through downtown and as far south as the Mission Reach of the San Antonio River.
San Antonio is poised to exceed the SA2020 goal of 7,500 downtown residents by 2020. As we hit the halfway point of the decade heralded by Castro, there is now opportunity to drive a surge in new downtown jobs and even envision a second Decade of Downtown starting in 2020. Why stop in five years?
One missing element on the downtown drawing board, and it’s a big one, is a high performing high school. SAISD has done a commendable job establishing higher performance in-district charter schools and magnet programs, but they are largely focused on K-8. A new headquarters with a high performing high school would signal a new era in inner city public education, a school where expectation are set high, where achievements exceed expectations, and where parents fight to enroll their children.
In the process, the school district would sell its portfolio of coveted Southtown properties, including the former Burnett Elementary School campus. That patchwork of properties is ill-suited to its own mission, but highly desirable to developers, The transaction would set off a new wave of development in Southtown and drive even greater residential density south of Cesar Chavez Boulevard.
CPS Energy may be #1 among the top 10 U.S. cities for energy affordability, #1 in Texas for solar and wind generation and reliability, but it projects a second-class image from its twin office spaces that bookend Navarro Street on the River Walk. Hundreds of employees who should be working at headquarters work elsewhere, reducing efficiency and robbing the urban core of employees consigned to distant offices.
Beneby rightly sees CPS Energy as a best-in-class national municipal utility, even as local media have fixated more on his executive pay, creating a situation where CPS Energy is more admired nationally than it is by many of its own ratepayers. That national profile deserves a skyline presence in this city. CPS Energy and its workforce should be housed in a building that attracts national attention for its energy efficiency. It doesn’t need to be tall or designed by a starchitect, but it does need to reflect our city’s status as the nation’s leading municipal energy utility.
Before Beneby resigned, sources tell the Rivard Report, informal merger talks were held between CPS Energy and SAWS, the city’s water and wastewater management utility. The talks were known to trustees of both boards, Beneby and SAWS CEO Robert Puente, and Mayor Ivy Taylor and City Manager Sheryl Sculley. The two utilities have very different histories and cultures, but the economic savings from such a merger, said one individual directly involved in the talks, could negate the long-terms costs of the Vista Ridge water purchase and pipeline project deal. If true, a merger could be a billion-dollar reduction in energy and water costs for the city in the coming years.
Unique circumstances in 2004 led SAWS to move north to its present two-building campus along U.S. 281 near the intersection of Mulberry and North St. Mary’s Streets. Valero Corp. had acquired Ultramar Diamond Shamrock in 2001, and Valero CEO William Greehey decided to sell Valero’s 12-acre campus and consolidate operations on the 200-acre Diamond Shamrock suburban campus along Loop 1604 East near I-10 West. A building expansion was completed in 2004, and with no other buyers in sight for the vacant headquarters, he made SAWS an offer the City and its board could not refuse.
SAWS paid $27.25 million for two buildings and a parking garage on 12.62 acres, with more than 300,000 square feet of office space, about half the cost of what Valero spent to develop the campus. The marble and granite executive suites of the building are certainly impressive Class A office space, but they seem too posh for a municipal water utility. Keeping the public water utility outside the urban core is inconsistent with the City’s stated goals of downtown development.
With the economic recovery well underway and the city continuing to grow, could SAWS sell its campus at a profit and use the money to return downtown? Could the San Antonio Economic Development Foundation use the SAWS campus to attract an outside company looking at San Antonio as a possible destination?
The possibilities are intriguing. If SA Tomorrow, Mayor Ivy Taylor’s comprehensive planning initiative, becomes a tool for strategic urban planning, a downtown Civic District could become more than an intriguing possibility.
*Top image: A section of San Antonio’s skyline near the San Pedro Creek Improvements Project footprint featuring the Frost Bank tower (right). Photo by Scott Ball.