Hays Street Bridge Trial: Restoration Group Cites ‘Breach of Contract’

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View of future Alamo Beer brewery from Hays Street Bridge. Rendering courtesy of Lake/Flato Architects. The Hays Street Bridge Restoration Group said the property was supposed to be used as a public park rather than for economic development.

View of future Alamo Beer brewery looking south from the Hays Street Bridge. Rendering courtesy of Lake/Flato Architects.

The Hays Street Bridge trial continued on Wednesday with opening statements from lawyers representing the City of San Antonio and the Hays Street Bridge Restoration Group about the City’s sale of a 1.7-acre property near the historic Eastside bridge to Alamo Beer Co. to build a brewery. Group members testified that the property at 803 N. Cherry St. should be public park land and the group’s attorney also argued the sale breached a contract.

The focus of the day was the memorandum of understanding between the two groups, a 2002 contract the parties agreed to in order to secure funding for the bridge restoration project.

Opening Arguments

Amy Kastely, representing the Restoration Group as well as Eastside resident Beatrice Valadez, presented an 18-year timeline of the Hays Street Bridge, starting with the 1994 formation of the Hays Street Bridge Restoration Group, including the 2002 contract known as the memorandum of understanding between the Restoration Group and the City of San Antonio, and ending with the sale of the property for $295,000 to Eugene Simor, owner of Alamo Beer Co., in 2012.

The Restoration Group petitioned the City to put the property transfer to a vote, but the petition was rejected as the property was not a park nor ever intended to be one, according the City. So the Restoration Group filed suit.

Amy Kastely, attorney for the Hays Street Bridge Restoration Group and Beatrice Valadez. Photo by Adrian Ramirez

Amy Kastely, attorney for the Hays Street Bridge Restoration Group and Beatrice Valadez. Photo by Adrian Ramirez

“A deal is a deal, and all the (Hays Street Bridge Restoration) Group is asking is that the City lives up to it,” Kastely said, adding that the City’s incentive package for Alamo Beer to develop the land makes the sale a “wash” after receiving an infrastructure improvement grant.

Deborah Klein, representing the City, said the bridge restoration project was irrelevant to the case, since the only property being debated was the North Cherry Street property.

Alamo Beer is no longer developing that property. To avoid the land under dispute, construction of the brewery is underway south of the bridge along Burnett Street.

The memorandum of understanding was drafted in 2001, after the National Highway Traffic Safety Administration awarded a TEA-21 grant, which provided 80 percent of the project’s funding, about $2.9 million, as long as the City of San Antonio paid the other 20 percent, about $718,000, of the funds in monetary and in-kind donations. The project totaled $3.6 million.

After Union-Pacific donated the bridge, appraised close to $370,000, the city had a bill of $349,000 remaining.

When City officials expressed concern over that expense, the Hays Street Bridge Restoration Group entered into the contract with the city, agreeing to raise funds for the project.

However, the property under the bridge – which was not available for sale for another three years – was neither subject to the memorandum, nor a part of the restoration project, Klein said.

While there was marked consideration in the property’s 2007 donation for the land to become a park, the City never approved funding to make it a park. The property owners, Berkeley and Vincent Dawson of the Anheuser-Busch franchise BudCo, only requested that if the land were used as a park it would carry their last name.

“In that deed, there’s no restriction for the property to be turned into a park,” Klein said. Since it was in the city’s inventory but neither allocated for any projects nor on the Parks and Recreation Department’s inventory, the City considered it “surplus land.”

When the City approved the land for economic development as opposed to park space, the Restoration Group called foul, claiming a breach of the contract.

“(The Restoration Group) may not like what we did, they may not appreciate it, they may not feel they had a choice, but the City did not breach the contract,” Klein said.

The keg pull at the construction site for the $8 million, 18,000-square-foot Alamo Beer Co. brewery just south of the Hays Street Bridge. Photo by Miriam Sitz

A keg pull in December 2013 kicks off construction for the $8 million, 18,000-square-foot Alamo Beer Co. brewery just south of the Hays Street Bridge. Photo by Miriam Sitz

Plaintiffs Call Witnesses

Douglas Steadman, a structural engineer and member of the Restoration Group’s fund committee, was called as the plaintiffs’ first witness.

“San Antonio has history,” Steadman said. He had become concerned with saving the bridge from deterioration, calling the bridge a “structural gem.”

Steadman was one of the major proponents of the bridge’s restoration, and helped lead fundraising and donation efforts as early as 2002, including the establishment of a San Antonio Area Foundation fund for donations.

Steadman was one of three Restoration Group members who approached the Dawsons in 2005 for the donation of BudCo’s property, but was not involved in the 2007 negotiations between BudCo and the City. Though the Restoration Group successfully solicited the property’s donation, they held no ownership over it, as it was transferred directly from the Dawsons to the City.

Kastely said a section of the memorandum regarding funding ensured the City would use in-kind donations directly for the restoration project’s budget. Steadman replied that had he known the City would have used that donation for another type of project, he would not have solicited that donation.

Klein then pointed out that Kastely had not read aloud the entire section, which continued that only donations raised through the Restoration Group’s Area Foundation fund had to be used for the Hays Street Bridge Project. Since the donated property didn’t go through that fund, she said it wasn’t necessary for the City to use that for the restoration project.

“In fact, that (paragraph) is about funds generated through the San Antonio Area Foundation,” Klein said. Steadman agreed.

The historic Hays Street Bridge at sunset. Photo by Juan Garcia.

The historic Hays Street Bridge at sunset. Photo by Juan Garcia.

Gary Houston, the second witness, joined the Hays Street Bridge Restoration Group because of the bridge’s prominence in the Eastside, where he grew up. In his youth in the Eastside, a water tower, a marker for the area, was removed.

“I had vowed I would protect landmarks on the Eastside,” Houston said. He said he welcomed the responsibilities of the memorandum, and said he donated thousands of hours to the Hays Street Bridge project.

Houston said he served on the fund committee, the part of the Restoration Group directly responsible for soliciting donations. He said the Restoration Group expected the City to protect the bridge in a custodial manner and the City would protect the Group’s interests in the establishment of a park.

“We wanted it to be a community gathering place,” Houston said. “We thought it could have an educational function; educational in the sense that it offers a view of a lot of famous landmarks.”

He said the bridge needed “space to breathe.” A park would bring that space while development would turn the bridge “invisible.”

“The park was to be the final part of the restoration of the bridge,” he said.

Houston attempted to make a case for the park’s use before the Dignowity Hill Neighborhood Association, but said he was cut short.

He said he was alarmed and disappointed when he started to hear about plans for economic development, leading to his eventual involvement in the petition effort. Houston said the land would not have popped up in the City’s economic development sights without the Restoration Group’s work.

Klein probed Houston on the federal grant – if there was funding provided for the creation of a park in the paperwork at all.

“It was a means to an end,” Houston said. “What it led to was not the end of the line; it’s not the end of the process.”

Klein asked again, and outside of landscaping under the bridge, Houston agreed that the Cherry Street property was not actually a part of the TEA-21 grant.

The group did apply for a grant in 2006, before the Dawsons donated the property, for funding to develop the property to a park, but the grant was rejected, and the City received no additional funding to develop a park on that space.

Klein finally asked Houston, “Could you point to me in the memorandum of understanding where it discusses the fundraising by the Hays Street Bridge Restoration Group to be applied towards creating a park?”

Houston answered, “There’s no mention of a park in the document itself.”

Debate Over Language

Before opening statements began, the lawyers representing both parties still had some loose ends to tie up before the jury could even enter the courtroom.

Judge David Canales listened to arguments on a matter outside of the jury, in the use of a timeline by Kastely. Because a previous agreement between the parties limited discussions of the restoration project unless specifically relevant to the North Cherry Street land, Kastely and Deborah Klein, attorney for the City of San Antonio, disagreed on the appropriate use of the timeline as an exhibit.

Klein said that several bullet points on the timeline were written to “gain traction with the jury’s sympathy,” particularly points which made the property’s sale seem free.

ALAMO Beer LogoThe bullet points stated that Eugene Simor “convinced” City Council to “give” him the property, “give” him the right to build a walkway to the Hays Street Bridge, and “give” him the right to use bridge for an outdoor seating area.

“(The timeline) can only be offered for inflammatory purposes,” Klein said, asking that either the timeline be withdrawn or those bullet points be stricken.

Kastely said her use of the word “give” was the most neutral way to discuss the land transfer. She claimed that though Simor had purchased the property, he was reimbursed with $800,000 in incentives for the project.

Canales granted Klein’s request, and Kastely blacked out that language on her timeline before the trial began.

Klein then requested a motion for continuance due to ambiguous language in the memorandum of understanding, as well as a perceived material prejudice. However, Canales denied the motion, since the jury had already been paneled.

“We should have taken this up before we paneled the jury,” he said.

Though Kastely did not get the chance to call another of the Restoration Group’s witnesses due to time constraints, Thursday morning will allow them to continue with witness testimony. The trial will continue Thursday at 9 a.m. in the courtroom of  Judge David Canales on the second floor of the Bexar County Courthouse.

*Featured/top image: View of future Alamo Beer brewery looking south from the Hays Street Bridge. Rendering courtesy of Lake/Flato Architects. 

Related stories:

Hays Street Bridge Trial Begins With Debate Over Defendants

With Little Neighborhood Support, Others File Suit to Stop Eastside Brewery

With a Hearty Keg Pull, Alamo Beer Co. Breaks Ground on Eastside Brewery

A City of Lost Breweries Should Welcome the Alamo Brewery to the Eastside

Progress versus Protest: The Path to Smart Preservation and Development

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