SAN ANTONIO – Initial plans to rehabilitate the historic Spaghetti Warehouse building at 1226 E. Houston St. may be hitting a snag as the developer contends with the realities of the current economy.
“With the current lending market, it’s a very inopportune time to get debt capital,” said Richard Gottbrath, managing partner and chief investment officer of Value Creation Strategies Holdings, an Austin developer which purchased the building in April for an undisclosed amount.
Value Creation Strategies Holdings intends to redevelop the property for what it calls “creative loft offices,” and is scheduled to break ground before year-end — but the timing of those plans is far from set in stone.
“We already own the building, but we’re trying to figure out a construction loan,” Gottbrath said.
The building served as headquarters of the historic Hugo, Schmeltzer & Co. wholesale grocery, which had it built in 1907 and moved its offices there after selling its Alamo Plaza headquarters. The building’s layout is roughly 42,000 square feet.
Its most-recent owner was Spaghetti Warehouse, an Italian-restaurant chain that bought the building in 1978 and operated at the site before it shuttered in 2020 amid the Covid-19 pandemic.
“We’re working with architects and historical consultants to do a full historical rehabilitation of the building,” Gottbrath said.
Editor’s note: This story was published through a partnership between KSAT and the San Antonio Business Journal.