The City Council unanimously approved an incentive package on Thursday worth $5.75 million for the rehabilitation of the old Merchants Ice industrial complex on Houston and Cherry streets on the near East Side.
In it, the Texas Research and Technology Foundation (TRTF) plans to establish VelocityTX, an incubator and accelerator hub for emerging bioscience and life science companies. The foundation, an economic development nonprofit that was established by Robert McDemott in the 1980s, will officially break ground on the $227 million project on Tuesday.
The multi-phased project will include office and lab space, but also a hotel and potentially residential—all in an open campus setting.
TRTF also expects to create 645 jobs in the next 5-7 years, and the preference will be to hire from the East Side. Currently, the incubator is developing an overall strategy to work with East Side schools—from San Antonio Independent School District, IDEA schools, and St. Philip’s College—VelocityTX President and CEO Randy Harig said.
“We made a commitment to the East Side,” Harig said. “The unemployment rate in San Antonio is just under 4 percent—around 37 percent on the East Side. So we made a commitment to train up and hire from the East Side first.”
The first phase, which is estimated to cost $14.2 million and be completed at the end of this year, comprises three buildings currently facing Cherry Street. Those structures will house VelocityTX’s offices, the incubator/accelerator, and a high-end tech company that will be announced at the groundbreaking.
Mayor Ron Nirenberg called VelocityTX a major win for San Antonio’s bioscience and biomedical ecosystem—the fact that it will have a physical home on a block that borders the struggling East Side.
“The work that San Antonio has done to build a culture of entrepreneurship is now fully realized and this particulate project … will become a magnet for companies to consider San Antonio talent and workforce,” Nirenberg told the room.
Harig said branches of the U.S. military, which has a large medical research presence in San Antonio, could be tenants of the VelocityTX campus further down the line.
“If the military comes up with a project or product, they can’t make it—it’s against the law,” Harig said in an interview after the vote. “They have to find somebody to take that tech and build a company around it, build the product, so they can sell it back to the government.
“That’s where we come in.”
Harig said those transactions are happening now. But future components, like the hotel, which is slated for the old Merchants Ice building that abuts the railroad tracks, would service those components of the hub.
Specifically, VelocityTX received approval for tax increment reinvestment zone funding worth up to $5 million over seven years for public improvements connected to the project, and a Chapter 380 Economic Development Incentive Fund grant worth up to $750,000 over five years for VelocityTX.
“This is kind of a catalytic project—it’s one of these things where you create a little bit of activity and then it grows from there,” District 2 Councilman Art Hall said. “It’s magnetic and attracts other businesses, other jobs, other companies to a particular area.
TRTF purchased the properties, which also include a parking lot across the street next to Estate Coffee Company, in 2017. Harig said the foundation plans to fund VelocityTX by using its own dollars, loans and philanthropic sources.
$227 million Merchants Ice complex to receive city inentives