Iris Dimmick / Rivard Report
City Council approved a long-awaited $61.8 million mixed-use development project for the Eastside’s Red Berry Estate on Thursday that includes a 300-unit mixed-income housing project and a new headquarters for hospitality company The RK Group.
Developed by a public-private partnership among the NRP Group, the San Antonio Housing Trust Public Facilities Corporation, and Casey Development, the project also provides for restoration of the Red Berry mansion and recreation amenities around Salado Creek.
"District 2 deserves a 'Class A' housing stock, and I think this project is it," Councilman William "Cruz" Shaw said. "We're talking about diversity and equity. District 2 has asked for this for years."
The City purchased the 84-acre property at 856 Gembler Rd. for nearly $2.3 million in June 2012. Located less than two miles from the AT&T Center, the property includes an 11-acre man-made lake, a swath of undeveloped land, and a historic mansion that belonged to Virgil Edward “Red” Berry (1899-1969). Berry, a state representative and senator who ran successful gambling houses, won the land in a card game, according to legend.
"From 2012 to today we've been working on the redevelopment of the site," Assistant City Manager Lori Houston said of the long-delayed project. "We had several stops and starts."
In 2014, NRP Group teamed with Terramark Homes and Sugar Land-based Wallace-Bajjali Development Partners for a $150 million development project, which the Council approved in August 2014. The project collapsed after Wallace-Bajjali was accused of fraud and one of its executives, former Sugar Land Mayor and developer David Wallace, declared bankruptcy, according to media reports.
"The community identified this project as a catalytic opportunity in 2010, and we worked with the community to come up for a vision for that site," Houston told the Rivard Report.
Based on community input, the redevelopment needed to include the restoration of the mansion, preservation of the grounds and pond, trail connectivity, housing, and commercial development.
Councilwoman Rebecca Viagran (D3) said it's time the neglected property got a facelift, adding that bringing jobs and investment to the Eastside is a good example of supporting balanced growth initiatives in all parts of the city.
The NRP Group, which is involved in other developments such as a $165 million mixed-use project at Hemisfair Park and the new The Kennedy at Brooks apartment complex, and Casey Development will fund $51.3 million – about 83% – of the project. The City and the San Antonio Housing Trust Public Facility Corporation, a nonprofit under contract to the City, will fund $10.5 million, or 17%. The project also will receive City and San Antonio Water System impact fee waivers in the amount of nearly $1.4 million.
"The City is still a partner in this project and there is still land ownership," Houston said. "It's not just all development going to the private developers. We are getting a half-mile extension to the Salado Creek hike and bike trail. The lake will be opened up for the community. These are public benefits that you can't put a dollar value on. We hope to start today on the design and have something under construction in the fall."
The RK Group, a local firm with national reach in the event and hospitality industry, will operate the mansion as an event venue and gain a 169,000-sq.-ft. office building for its headquarters. RK Group President and CEO Greg Kowalski expects to relocate 300-400 employees to the estate once construction is completed and hopes to add 100 new jobs.
"Everyone that currently works in our current headquarters on East Commerce will be in the Red Berry site, and we'll also consolidate our other facilities around the city," Kowalski said. "This will help us continue to grow and bring everybody together. So many people have worked on this for so many years. ... I think we all hope this is a catalyst to continue with this development on the Eastside."
Councilman John Courage (D9) was the only Council member to vote against the plan, calling the affordable housing unit component of the plan "disingenuous." Councilman Rey Saldaña (D4) was absent due to travel and did not vote.
"We need to take a closer look at these housing projects and do something that's truly affordable in a lot of these communities," Courage said.
The completion of the AT&T Center in 2002 was expected to be a catalyst for development in the area, but "it hasn't been," he said. The AT&T Center is located 1.7 miles away from the estate.
"Whatever comes of this I hope it's successful, but those in the community should benefit, not just walk around the trails and look at the beautiful mansion," Courage said.
Mayor Ron Nirenberg said there are affordable housing issues all over the country, and that this development is also about connecting people to opportunities, education, and transportation.
'The reason why it's taken so long [to redevelop] Red Berry is that we've tried to get to the point where we are right now," Nirenberg said. "... We can be proud we're making action happen in the Red Berry Estate."
Houston said that rent for a 1-bedroom unit would cost around $815 a month and would be affordable for someone who makes $30,000 a year. She added the project would be "catalytic" for the surrounding vacant and underutilized properties along the nearby Interstate 10 corridor.
"This really is an opportunity to spur more development, and then you have around 50 acres surrounding the property," Houston told the Rivard Report after the Council vote. "When you add 500 jobs to this area and over 300 housing units, there is going to be an economic impact, and there is going to be growth because there are dollars in that community."