Why does a market-rate downtown skyscraper get $7.5 million in municipal incentives?


San Antonio – When a 32-story downtown skyscraper joins the San Antonio skyline in the spring of 2024, its market-rate rents will likely end up being out of reach for many residents.

But even as San Antonio elected officials have loudly proclaimed the need for affordable housing, the project is set to get $7.5 million in city incentives thanks to a now-defunct city policy to revitalize downtown San Antonio. the city.

Weston Urban’s 32-story residential tower is expected to be completed in spring 2025 (Urban Weston)

The developer, Weston Urban, held a groundbreaking ceremony Thursday afternoon at the corner of Main Street and Travis Street for its next residential tower, “300 Main,” which will be built on a former parking lot.

CEO and co-founder Randy Smith said the rents for the 354 apartments, which will average 924 square feet, would be “targeted at young working professionals downtown.”

“So if you’re a banker at Frost, if you’re a lawyer downtown, if you walk to work at the city or the county, you can afford to live in this building,” he said.

A d

The tower will include a six-level parking garage and 6,275 square feet of retail space on the ground floor. Other high-profile Weston Urban developments, including the Rand Building and the new Frost Tower, are within a few blocks.

In a fitting twist for what Smith said is the city’s tallest apartment building, the ubiquitous gold shovels for groundbreaking ceremonies have been eschewed in favor of a pair of diggers with gold-painted buckets. – with San Antonio Mayor Ron Nirenberg and Bexar County Judge Nelson Wolff at the helm.

EXTRA WEB: Mayor Nirenberg and Judge Wolff broke up Project 300 Main

The city and county are doing more than dumping dirt on development. Combined, they are providing more than $8.2 million in incentives in the form of property tax rebates and SAWS impact fees for projects, which are expected to exceed $107 million.

Construction of the building begins at a time when Nirenberg and city council members have stressed the need for affordable housing projects, including even $150 million for housing in the upcoming 2022 bond elections.

A d

The 300 Main project does not fit this bill. However, it was one of the last developments to receive city incentives through a now-defunct program called Center City Housing Incentive Policy (CCHIP).

CCHIP was established in 2012 and aimed to increase housing density in the urban core during former Mayor Julian Castro’s “Downtown Decade”.

Projects that meet its criteria could qualify for incentives such as city and SAWS fee waivers, local property tax rebate, and development loans and grants, without needing council approval.

The policy expired on December 13, 2020, just two days after the deal was executed for the 300 Main – called “305 Soledad” in city documents.

The project’s CCHIP deal provides for a 100% reimbursement of municipal taxes for 15 years, but the developer is required to contribute 25% of that reimbursement to an affordable housing fund, which will ultimately earn it $7.5 million.

A d

The deal also includes a waiver of the SAWS Impact Fee of up to $1 million, but the City Council in May 2021 had to approve the reimbursement of the money from the Houston Street Tax Increase Reinvestment Area ( TIRZ) instead, as there was no more SAWS funding available.

Nirenberg said a project like 300 Main would not receive that kind of help from the city in the future.

“This program (CCHIP) was created to stimulate a market that did not exist here. Ten years ago, when we talked about housing in the city center, there really wasn’t any. And there was definitely no new housing built, rehabilitated,” Nirenberg told KSAT. “That’s what you see here, it’s about a decade of work to articulate that priority for us to have a healthy economy and a healthy downtown housing market. This program was created.

A d

“The market is starting to prove itself. So we eliminated that program and now we focus on units that are created that would not be created by the market alone.

Neighborhood and Housing Services Department Deputy Director Veronica Garcia confirmed that Project 300 Main, or a similar project, would not be able to obtain these incentives through a normal administrative process now.

The city’s current fee waiver program requires that at least 50% of units in housing developments be affordable housing, she said, and there is no longer a city policy that would allow a tax refund for a housing project – affordable or otherwise.

A project could still get help through a special incentive package, but it would require city council approval.

Smith said CCHIP was “never meant to be an affordable housing tool” and praised it for helping the development of the 300 Main possible.

“I’ll tell you, this project couldn’t have happened without him,” Smith said. “So to the extent that CCHIP’s mission was to encourage downtown housing, mission accomplished.”

A d

Although 300 Main’s apartments are rented at market price, its CCHIP agreement still includes a cap on how much it can charge.

Bexar County also proved a 40% tax refund over six years worth an estimated $714,000, as part of a settlement the commissioners approved Feb. 8.

To see a full list of active projects receiving funding through CCHIP, click HERE.

Copyright 2022 by KSAT – All rights reserved.


Comments are closed.