A representative for the owner of two large, historic building complexes on the city's Eastside – the Friedrich Refrigeration Building and Merchant's Ice & Cold Storage Building – appeared before the Historic and Design Review Commission to request the official historic designations from the City be removed from large portions of both properties.
Commissioners responded with a unanimous "no" on Wednesday, rejecting claims from land use attorney James McKnight that the historic designations are preventing his client, John Miller of Dallas, and other investors, from selling the complexes. Without the option of demolishing some dilapidated structures, which historic designation prohibits, buyers aren't interested, McKnight said.
"That doesn’t provide, in my mind, a significant excuse for demolishing buildings," said Commission Chair Michael Guarino.
The San Antonio Conservation Society and the Dignowity Hill Neighborhood Association sent representatives to the meeting to oppose the requested change that would have resulted in the owner preserving the building facades and demolishing extensive portions of the rest. Both buildings are on the National Register of Historic Places.
The redevelopment of the two complexes would add significant momentum to revitalization initiatives already underway on the Eastside, but the balancing act between development and preservation of the Dignowity Hill Historic District and surrounding areas has been the subject of growing public interest as more and more projects come to light. Generally, community leaders support projects that attract more people and amenities to the historically low-income area, but not at the expense of erasing the Eastside's history or allowing substandard design.
McKnight said after the meeting that Miller will take his request to the Zoning Commission, the next rung on the ladder of City government and, if necessary, to City Council where Mayor Ivy Taylor and the 10 council members have the ultimate say over such proposals.
"This is just a recommendation, it goes to Zoning Commission in two weeks. ... I want to know what the commissioners have to say, what OHP (the Office of Historic Preservation) has to say. We want to hear the comments," McKnight said.
OHP staff already has recommended denial of the request to change the designation and allow partial demolition.
Carrying the matter all the way to a City Council vote, while unlikely to reverse decisions at HDRC or the Zoning Commission, will raise the profile of the properties for sale, which might be McKnight's real intent.
"Both buildings are being marketed now, (we want to see) what that reaction is," he said.
There has been interest in both properties, but not from any buyers with deep enough pockets to pay the asking price or with the patience and willingness to see a very complicated historic redevelopment project through to completion. Some local developers say the properties are too far gone to redevelop "as is" with incurring significant financial loss.
"We’re at kind of our wits' end at this point, and we’re really looking for something to get people to the table,” McKnight told commissioners.
The Merchant's Ice complex at 1305 E. Houston St. was on track for redevelopment into a 262-unit, 120,000 sq. ft. apartment complex last year, but that deal fell through when the developer, Indiana-based Herman & Kittle Properties Inc., was unable to attract a partner or buyer willing to finance the project.
Plans for the so-called Merchant's Ice Lofts were to include units priced below market rate that would have won City incentives, but McKnight said the historic designation proved to be a deal killer.
"They (HKP) told us at the end that 'had the designation not been there, we could have made this work,'” he said, declining to identify any letters of agreement or other evidence of a prospective buyer willing to back HKP.
“I would be much more sympathetic if you had such a letter or such plans,” said Commissioner Michael Conner (D4).
The San Antonio Business Journal reported in July that HKP, which does not have any other projects in San Antonio, "spent more than $450,000 on predevelopment and environmental remediation costs. ... And with most of the planning and heavy lifting already done, whoever steps in won't have to do much, aside from turning the dirt."
Those plans were never presented to HDRC for review, said Commissioner Tim Cone (D1). It is incorrect to characterize historic designation as a “detriment to the project when they’ve never event met with HDRC," he said.
"I’m just really amazed that no one has come to the table with the experience (in taking advantage of) historic tax credits,” Guarino said of local, federal, and (soon) state tax credits available for renovation of historic properties. "It’s a bargain.”
He remembers seeing proposed plans at a local architecture firm for the Merchant's complex, but that apparently never came to fruition. He declined to identify the firm.
The Friedrich complex at 1617 E. Commerce St. hasn't been the subject of any major redevelopment proposals for some years, and its many years of vacancy was used to attack Mayor Taylor during the spring runoff campaign by supporters of former state Sen. Leticia Van de Putte.
Van de Putte held a press conference across the street to give Eastside leaders an illustrative backdrop that, they said, demonstrated then-interim Mayor Taylor's failed leadership.
“It’s been an eyesore in the community for tens of years,” Councilmember Alan Warrick II (D2) said then. “Ivy Taylor had the opportunity as mayor to make a statement. As a District 2 council person she mentioned that this was a catalytic project, and yet she didn’t do anything as mayor to move this project forward.”
Taylor gave a measured response at the time.
“The Friedrich building is a difficult project with an owner that’s been difficult to deal with and I think maybe four mayors and four city managers have tried to tackle that and I certainly gave it a good go,” she said.
Owner Miller and his associates won approval from HDRC in September 2014 to demolish half of the 14 structures that make up the Friedrich complex after presenting plans that showed new construction would preserve the building's exterior and more than half of its overall structure.
Miller has said the site has the capacity to hold a six-story parking garage, more than 500 housing units, and 60,000 sq. ft. of commercial space.
McKnight's unsuccessful efforts to persuade HDRC officials to remove the historic designation probably means any sale or redevelopment of the Friedrich site remains unlikely anytime soon.
*Top image: These buildings that make up the Friedrich Refrigeration complex are designated historic by the City. Courtesy photo.