Pre-leasing has begun at the 323-unit Acero apartment complex on San Pedro Creek south of downtown. The first residents are expected to move in as soon as November.
The $56 million project is a partnership between Cleveland-based developer NRP Group, one of the most active builders in San Antonio, and the San Antonio Housing Trust, a City of San Antonio nonprofit that’s governed by five council members. Cornerstone Holdings, a Colorado-based investment company, is providing an unknown amount of equity.
The complex consumes nine acres of land where West Cevallos Street meets San Pedro Creek. This farther-stretch of the multimillion creek transformation project, which is currently in the planning phase, is near where channel connects with Alazan and Apache creeks at Interstate 35.
Rents start at $1,080 for a one-bedroom unit and go as high as $2,150 for a two-bedroom. According to its website, there’s a single three-bedroom going for $2,460.
Half of the units will be priced at market-rate, while the other half will be rented to people making 80% of the area median income (AMI) or less. Of those units, 32 will be rented to people making 60% AMI or less. NRP Group has contributed $250,000 of its own dollars to make the 60% AMI rents possible. The company, along with the rest of the partnership, is also benefitting from a full property tax exemption granted under state law to properties owned by public facility corporations, which the Housing Trust has and is using to own this land. In the partnership, NRP Group and Cornerstone Holdings own 85%, but their split of the 85% is unknown; the Housing Trust owns 15% of the development.
Under the partnership agreement, NRP Group can charge up to 35% of a household’s income on rent.
In an email exchange, NRP Group declined to answer questions about profit. Pete Alanis, the trust’s executive director, said the Housing Trust PFC will receive a $25,000 annual administrative rent and 15% of net cash flow from the project.
Assuming NRP Group holds the largest ownership stake, and assuming NRP Group sells its share in the near future, the Housing Trust PFC can choose between 15% of net proceeds from the sale or 15% net cash flow for the remainder of the lease.
In September 2019, NRP Group sold its majority stake in The Baldwin on the near East Side to a minority owner for a $10 million profit. The Housing Trust PFC is providing a property tax exemption for that project, as well.
[ Scroll down for a chart showing AMI levels. ]
Acero
» Address: 419 W. Cevallos St.
» Development partnership: NRP Group (Cleveland), Cornerstone Holdings (Denver) 85% ownership; San Antonio Housing Trust, 15% ownership
» Property Owner: San Antonio Housing Trust Public Facility Corp.
» Occupancy: N/A
» Rent or Buy: Rent
» Height: 3-4 stories
» Land size: 9 acres
» Total units: 323
» Market rate: 161
» 80% AMI: 129
» 70% AMI: 0
» 60% AMI: 32
» 50% AMI: 0
» 40% AMI: 0
» 30% AMI: 0
» Student Units: N/A
» Section 8: Yes, accepts voucher
» Retail (s.f.): N/A
» Office (s.f.): N/A
» Parking: 502 spaces (garage and surface)
» Construction start date: Unknown
» End date: November 2020
» Architect: Davies Collaborative (Austin)
» Cost: $56 million
» Investors: Cornerstone Holdings (Denver); amount unknown
» Financing: BBVA (Birmingham, Ala.), construction lender; PGIM (Newark, N.J.), permanent debt
» San Antonio Incentives: $99,999 (at least)
» Tax Increment Reinvestment Zones (TIRZ):
» SAWS Fee Waivers: $99,999
» City Fee Waivers: Unknown amount
» City Loans: N/A
» Est. City Property Tax Rebate: N/A
» Bexar County Incentives: N/A
» Texas incentives: Property tax exemption; 75-year lease
» Federal incentives: N/A
» Other: N/A
» TOTAL PUBLIC SUBSIDY: $99,999, at least
» Return on investment: NRP Group declined to provide. Housing Trust PFC receives $25,000 annual administrative rent and 15% net cash flow.
Timeline
March 20, 2020
The Acero receives design approval from the Historic and Design Review Commission. Read more.
5 steps to understanding public facility corporations, or PFCs
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Heron Editor Ben Olivo can be reached at 210-421-3932 | ben@saheron.com | @rbolivo on Twitter