San Antonio – When a 32-story downtown high-rise joins San Antonio’s skyline in spring 2024, its market-rate rents will likely end up out of reach for many residents.
But even though San Antonio’s elected officials have been loudly proclaiming the need for affordable housing, the project is set to get $7.5 million in city incentives through a now-defunct city policy aimed at revitalizing the city’s downtown.
The developer, Weston Urban, held a ground-breaking ceremony Thursday afternoon at the corner of Main Street and Travis Street for its upcoming residential tower, “300 Main,” which will be built upon 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 “aimed at the working, young professionals downtown.”
“So if you’re a banker at Frost, if you’re an attorney downtown, if you walk to work at the city or the county, you’ll be able to afford to live in this building,” he said.
The tower will include a six-level parking garage and 6,275 square feet of ground-floor retail space. Other high-profile Weston Urban developments, including the Rand Building and the new Frost Tower, are within a few blocks.
In a fitting touch for what Smith said would be the city’s tallest apartment building, the ubiquitous golden shovels for ground-breaking ceremonies were eschewed in favor of a pair of excavators with gold-painted buckets -- with San Antonio Mayor Ron Nirenberg and Bexar County Judge Nelson Wolff at the controls.
The city and county are doing more than dumping dirt on the development. Combined, they are providing more than $8.2 million in incentives through rebates for property taxes and SAWS impact fees for the projects, which is expected to exceed $107 million.
The building’s construction is getting underway at a time when Nirenberg and city council members have been stressing the need for affordable housing projects, even including $150 million for housing in the upcoming 2022 bond election.
The 300 Main project does not fit that bill. However, it was one of the final developments to receive city incentives through a now-defunct program called the Center City Housing Incentive Policy (CCHIP).
CCHIP was created in 2012 and was aimed at increasing housing density in the urban core during former Mayor Julian Castro’s “Decade of Downtown.”
Projects that fit its criteria could get incentives like city and SAWS fee waivers, a local property tax rebate and development loans and grants, without the need for council approval.
The policy expired in Dec. 13, 2020, just two days after the agreement for 300 Main -- called “305 Soledad” in the city’s documents -- was executed.
The project’s CCHIP agreement provides a 100% tax rebate on city taxes for 15 years, but the developer is required to pay 25% of that rebate into an affordable housing fund, ultimately netting it $7.5 million.
The agreement also includes a SAWS impact fee waiver of up to $1 million, but the city council in May 2021 had to approve reimbursing the money out of the Houston Street Tax Increment Reinvestment Zone (TIRZ) instead since there was no more SAWS funding available.
Nirenberg said a project like 300 Main would not receive this kind of help from the city in the future.
“That program (CCHIP) was created in order to stimulate a market that didn’t exist down here. Ten years ago, when we were talking about housing in the downtown area, there really wasn’t any. And there certainly wasn’t any new housing being built, rehabilitated,” Nirenberg told KSAT. “That’s what you’re seeing here, is about a decade’s worth of work in articulating that priority for us to have a healthy economy and a healthy housing market downtown. That program was created.”
“The market is beginning to prove up on its own. So we’ve eliminated that program and now we’re focused on the units that are being created that wouldn’t be created by the market alone.”
Neighborhood and Housing Services Department Deputy Director Veronica Garcia confirmed the 300 Main project, or one like it, would be unable to get those incentives through a normal, administrative process now.
The current city fee waiver program requires at least 50% of the units in housing development projects to be affordable housing, she said, and there’s no longer any city policy that would allow a tax rebate for a housing project -- affordable or otherwise.
A project could still get help through a special incentive package, but it would require city council’s approval.
Smith said CCHIP was “never meant to be an affordable housing tool,” and praised it for helping the 300 Main development possible.
“I will tell you, this project couldn’t have happened without it,” Smith said. “So to the extent that CCHIP’s mission was to incent housing downtown, mission accomplished.”
Though 300 Main’s apartments will be rented at market rate, its CCHIP agreement still includes a cap on how much it can charge.
Bexar County has also proved a six-year, 40% tax rebate worth an estimated $714,000, in a deal that commissioners approved on Feb. 8