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Bexar County, Weston Urban to partner on apartments at Continental Hotel in west downtown San Antonio

June 19, 2021 By Richard Webner Leave a Comment

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The former Continental Hotel, 322 W. Commerce St., will be sold to a developer for the production of mixed-use, mixed-income housing. Photo taken by Ben Olivo | Heron on Sept. 9, 2019
The former Continental Hotel, 322 W. Commerce St., will become part of a 250-unit apartment project. Heron file photo

A nonprofit arm of Bexar County is set to partner with downtown developer Weston Urban on a 250-unit mixed-income apartment project that would preserve at least the facade of the historic Continental Hotel (West Commerce Street) and Arana buildings (Dolorosa) in west downtown.

The roughly $80 million project would be the first developed by the Bexar County Public Facility Corp., which the county’s Commissioners Court voted to create in January. County Judge Nelson Wolff and the court’s four commissioners serve as the nonprofit’s board. On Tuesday, they approved a preliminary agreement with Weston Urban for the apartment development, with plans to set the terms for a final agreement by August.

Twenty-five of the complex’s units, or 10%, would be reserved for tenants making up to 60% of the area median income (AMI), according to a presentation from the Tuesday meeting. Another 40% of the total units would be for tenants making up to 80% AMI. Rents for below-market units would not be allowed to exceed 35% of the tenants’ incomes, and the rent-to-income ratio for all of the income-restricted units combined would have to be below 30%.

[ Scroll down for a chart showing AMI levels. ]

As is typical for PFC deals, the complex would receive a full property tax exemption for the duration of a 75-year lease. Weston Urban would pay the Bexar County PFC an annual rent of $150,000, and the PFC would receive 1% of the sales price each time the complex is sold.

Weston Urban has committed to preserving at least the facades of the Continental Hotel and Arana buildings, said David Marquez, the county’s executive director of economic and community development, in a phone interview. The firm’s president, Randy Smith, told the Heron last year that the firm planned to refurbish the buildings, not just preserve the facades. Smith didn’t respond to a request for comment on Thursday.

[ » June 9, 2020: Continental Hotel sold to Weston Urban for mixed-use project ]

Smith said last year that the development would include a 432-space parking garage, and that construction would begin in November of this year and last for two years.

A rendering of the project depicts a 12-story building, though Marquez cautioned that it is preliminary.

A rendering shows a 12-story apartment building flanked by development on the site of the current Continental Hotel and Arana buildings, which are both vacant.
Rendering shows a 12-story apartment building flanked by development on the site of the current Continental Hotel (right) and Arana buildings, which are both vacant. Courtesy Bexar County

Unlike the City of San Antonio’s PFC—which has come under growing scrutiny from local residents and activists who question whether the housing it creates is affordable—the county’s PFC has a narrow focus on supporting projects with historical or cultural significance, Marquez said.

“I think this is a game-changer,” Precinct 3 Commissioner Trish DeBerry said of the county’s PFC at the Tuesday meeting. “I am super-enthused about the opportunity that has presented itself. I look forward to other projects that will come to this court. In fact, I had a conversation with the city yesterday and said, ‘Look, if you guys deny the Friedrich building, we’re ready to take it on.’ ”

Weston Urban plans to build mixed-use apartments with retail at the former site of the Continental Hotel, 322 W. Commerce St.
HERON | GOOGLE

The PFC gives the county another tool to spur development along the Mission Reach stretch of the River Walk and San Pedro Creek, which the county and city are in the process of fixing up into a 1.9-mile-long park with walking trails, similar to the River Walk. Weston Urban’s apartment complex would face the creek, across from the 18th-century Spanish Governor’s Palace.

“It was important to us that there be quality development there,” Marquez said. “We’re thrilled to have Weston Urban as a partner, who shares that vision.”

Weston Urban bought the Continental Hotel property and an adjacent parking lot from the city for $4.7 million last year. Built in the late 19th century, the Continental Hotel served as offices for the city’s Metropolitan Health District until 2016.

The firm owns two historic homes on the block where the apartment complex is planned. It has committed to not moving one of them, the De la Garza House, county officials said at the Tuesday meeting. It is not yet clear whether the firm will move the other, the O. Henry House Museum, which stands next to the Arana building, 601 Dolorosa.

A block to the north of the proposed apartment complex, developer James Lifshutz has nearly completed renovation of the Kline’s building into retail and restaurant space, but it’s unclear whether Lifshutz has any tenants lined up. The Kline’s is flanked by two other older commercial buildings—the Leeds building, 345 W. Commerce St., and another commercial building—both with plans to refurbish them, as well. The block sits in front of Texas Public Radio’s new headquarters.

The complex would be just north of the University of Texas at San Antonio’s (UTSA) new downtown campus, where construction of the six-story School of Data Science and National Security Collaboration Center already rises three stories tall next to San Pedro Creek between Dolorosa and Nueva streets. On the other side of the creek, UTSA plans to build its Innovation, Entrepreneurship and Careers Building, an extension of the College of Business.

Frost Tower, which Weston Urban co-built, is on the eastern bank of the creek, at 111 W. Houston St. The firm plans to begin work later this year on a 32-story apartment tower nearby at 305 Soledad St.

…

2021 Area Median Income

Here are the latest area median income (AMI) levels for the San Antonio-New Braunfels region (Bandera, Bexar, Comal, Guadalupe and Wilson counties). Want to know more about how AMI works? Click here.
1 person2 person3 person4 person5 person6 person
120%$62,250$71,150$80,050$88,900$96,050$103,150
AMI$51,900$59,300$66,700$74,100$80,100$86,000
80%$41,550$47,510$53,400$59,300$64,050$68,800
70%$36,330$41,510$46,690$51,870$56,070$60,200
60%$31,140$35,580$40,020$44,460$48,060$51,600
50%$25,950$29,650$33,350$37,050$40,050$43,000
40%$20,760$23,720$26,680$29,640$32,040$34,400
30%$15,570$17,790$20,010$22,230$24,030$25,800
Source: U.S. Department of Housing and Urban Development

Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter.

Contact the Heron at hello@saheron.com | @sanantonioheron on Twitter | Facebook

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Filed Under: Bexar County, Commerce Street, Development, Historic Preservation, Housing, San Pedro Creek, West Downtown, Weston Urban Tagged With: Arana building, avid Marquez, Bexar County, Bexar County PFC, Bexar County Public Facility Corp., Continental Hotel, De la Garza House, Frost Tower, James Lifshutz, Kline’s building, Leeds building, Metropolitan Health District, Nelson Wolff, O. Henry House Museum, Randy Smith, River Walk, San Pedro Creek, Spanish Governor's Palace, Texas Public Radio, Trish DeBerry, University of Texas at San Antonio, UTSA, Weston Urban

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