By Richard Webner | @RWebner | Heron contributor
Last month, San Antonio joined the ranks of American cities whose newspapers have sold their historic offices, built during the industry’s heyday, to be redeveloped as condos or hotels.
A partnership led by Sutton Co. of Austin, a firm with more than 20 years of experience rehabilitating historic buildings, purchased the former San Antonio Express-News headquarters at 301 Avenue E last week from Hearst Corp., the newspaper’s parent company, county deed records show.
In a phone interview on Thursday, Sutton’s chairman, Mac Pike, described the firm’s ambitious plans for the 2.14-acre property, which will likely include elements of multifamily housing and retail accompanying an upscale boutique hotel “along the lines of Hotel Emma,” he said.
Though the project is in its early planning stage, the firm expects to demolish the additions made to the building since it was constructed in 1929, Pike said. The historic building would be converted into a hotel, with condominiums attached which would share the hotel’s brand. A multifamily tower would be built beside it, and there would likely be a retail component.
There could also be an event venue with a capacity of about 3,000 people, he said, likening it to the Moody Theater in Austin, where Austin City Limits is filmed.
The partners are talking with three architectural firms about working on the project, and will likely choose one within the next two months, he said.
“I would consider it a fast-track project,” Pike said, though the firm plans to apply for historic tax credits, which often takes a while. “It’s going to take some time. I would think construction would not start before a year or so.”
The project is not yet well-defined enough to offer an estimated cost, he said. “Any time you go vertical, it’s expensive in today’s world,” Pike said. “It just depends on what we wind up building.”
The structure of the Express-News building allows it to be converted without too much difficulty into a hotel, he said. The width of its bays—in other words, the distance between its supporting beams—are “suitable for hospitality,” he said.
“Obviously, any type of reuse is always somewhat difficult, but it’s such a great building,” he said. “I hate to describe it this way, but it’s got great bones. It’s a very solid building. It was built in the late ’20s, but it’s in really, really good shape. The Hearst Corp. has done a great job of maintaining it.”
Sutton Co., which formed in 1989, has been tackling historic rehab projects for nearly 30 years. Its projects are dotted across downtown Austin, including Avenue Lofts, in a former state office building that had been constructed in the 1940s. It also built the 12-story, 150,000 square-foot The Plaza Lofts.
The firm has been working in San Antonio since the early ’90s, Pike said. Among other projects, it converted the former First United Methodist Church in Alamo Heights into offices and townhomes.
“I think what attracts us is the difficulty,” Pike said of historic rehab projects. “The barrier of entry is higher, and we like that. We like challenges, and we like to be able to be creative.”
Sutton most often sells its developments after completing them, but it might do differently with the Express-News building because it is within a federal Opportunity Zone, which offers developers breaks on capital gains taxes, he said.
The Express-News is expected to move into the Light building—the former headquarters of the San Antonio Light newspaper—between April 11 and April 18, the newspaper’s publisher, Mark Medici, said in an interview. Local developer GrayStreet Partners has spent the last four years converting the building into high-end office space, and is close to getting a temporary certificate of occupancy, he said.
“It’s very symbolic for us to be moving into a more high-tech, technology-focused environment at the Light building,” Medici said. “That space that we’re in is going to be more conducive to the next great run of public-service journalism from the San Antonio Express-News.”
“It was more space than we needed,” he said of the Express-News building. “The fact that the Sutton group bought it and will maintain (the historic building) gives me a lot of peace of mind.”
Over the last decade, newspapers across the U.S. have been selling their historic office buildings. In 2016, the Tribune Tower in Chicago, the longtime home of the Chicago Tribune—which served as a model for the Express-News building—was sold to a developer from Los Angeles with plans to convert it into a mixed-use development. That same year, the Los Angeles Times building was sold to a Canadian developer.
In Austin, the offices of the American-Statesman are set to be transformed into six high-rise towers.
For the Express-News building project, Sutton’s partners include Michel Issa, president of Austin-based Universal Realty, who has also worked with the firm before, Pike said. Another partner is Jimmy Nassour, a real estate attorney who has been involved with nearly all of Sutton’s projects.
“He’s not only an attorney, but he’s a very knowledgeable real estate person, so we always like to have him on board,” he said.
Pike doesn’t expect the ongoing disruption in the global supply chain, which has driven up the prices of steel, timber and other construction materials, to pose a significant threat to the project.
“We always look beyond short-term issues, and we believe all of those are short-term issues,” he said. “The dynamics of San Antonio have been changing fairly rapidly in the last several years, and it’s all good. It’s all trending in the right direction.”
Editor’s note: Richard Webner is a freelance journalist who does reporting for the Express-News, owned by Hearst Corp., as well as the Heron. Follow him at @RWebner on Twitter
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