San Antonio: Days 3 & 4

We started out in San Antonio by meeting with the city officials. It really seemed that there was not a consistent vision for the downtown riverwalk area. Developers and city officials seemed to not be aligned with each other to accomplish their goals. One of the city officials was very determined to change this and was talking to us about offering new market tax credits, and city financing as incentives to work with the city for a more urban feel in downtown. We were told that this could be even tougher in San Antonio then most other cities, because tourism is such a big part of the city's economy and hotels are the projects that seem to do the best. The officials told us that UTSA has really helped the economic development of San Antonio but city officials were encouraged by a few projects that promoted downtown living. We talked to city inspectors for a while and they were relatively conservative with regards to adaptive re-use projects and the zoning and inspections that those projects would require.

After the meeting with city officials we met with Ed Cross. Ed Cross was the developer behind the Vistana, a mixed used development with bottom floor retail and multi-family living above. The Vistana takes up a whole city block and is a gorgeous development. Ed admitted that they were sucking wind on the retail part of the development, but were doing very very well in the residential being 96% leased. He told us the total cost of the project was around $60M and that on his original proforma he only had a 7% return. Relatively low, but since the completion he told us he has realized a bigger return. He told us he had many stories, but summed up his real estate philosphy by investing in projects and buildings that have low capital expenditures. He realized that office takes a lot to maintain and that he would rather invest in a warehouse type space because then all you need to do is sweep when tenants change.

The next day we started at Friedrich Air Conditioning Lofts. This is a massive building that is in serious disrepair. There is an office that is very tastefully done on the first floor, but the rest of the building is still yet to be redeveloped. The building was built in the 1920s and is located in a major incentive zone in San Antonio. It is in a TIF district, and a developer could also receive historic tax credits and new market tax credits. There is still much work to be done on the over 500,000 SF bulding. It will be a major challenge for any developer and architect to lay out this building as the massive cavernous inside feels more like a cave at times and you cannot have aparments or condos without windows, so figuring out what to do with all that space will be very tough.

After the Fred Lofts, we had a brief meeting with Alamo Architects. They had redeveloped an old industrial building that manufactured trailers. They earned a LEED silver rating because they were able to reuse many materials from the industrial building. Some of the materials they re-used were the wood from the old building and even concrete which they turned into a quite cool and funky fence.

We then had lunch with Marty Wender, and he filled us in on his history in the development industry. He assembles land in mass quantities and then sells the land to companies for development. He told us of the many deals he has done, but pointed out how important it was for him to know how the developer was going to use the land as their intended use would directly affect the value of the surrounding land, which he also owned. He was a very interesting man and is a natural salesman and it showed in the meeting.

For our final stop in San Antonio we met with the Riverwalk Authority. We walked a couple miles up and down the riverwalk as we were told how the community is finally buying into the idea of the revitalization of the riverwalk and the city is now offering incentives to developers. One of the incentives is one would not have to pay property taxes on the increased value along the riverwalk for 15 years and that money saved would then go into reinvesting in the riverwalk redevelopment.