Massive $560M Broadway East development near Pearl set to begin next month

More details emerged this week on a $560 million mixed-use development east of the Pearl, across Broadway, on more than 20 acres of land owned by GrayStreet Partners of San Antonio in the Government Hill neighborhood.

The multi-phased Broadway East development is scheduled to be built over the next 10 years, starting with a 380-unit apartment building facing Broadway at Pearl Parkway, just south of the 1800 Broadway apartment building. Before construction can begin, GrayStreet Partners and its partner Houston-based Midway must rebuild the area’s streets and sidewalks, add bike lanes, and tackle drainage upgrades and bury utility lines. The initial phase extends from Broadway to North Alamo Street, as future phases will push the project as far as North Hackberry Street, well into Government Hill.

The infrastructure work is expected to begin in November, Peter French, GrayStreet Partners’ development director, told the Midtown Tax Increment Reinvestment Zone (TIRZ) board on Wednesday.

French said there will be 1.6 million square feet of mixed-use development, which includes copious amounts of ground-floor retail, as well as parks and plazas, office space, some hospitality and parking structures. The plan looks to extend Pearl Parkway from the Pearl across Broadway into Government Hill, essentially connecting the two large-scale developments. Broadway East will also “observe and honor the historic pathway of the Acequia Madre (irrigation canal) as it traverses the neighborhood,” French said.

“Pedestrian spaces, green spaces, are the primary drivers of this project,” he said.

GrayStreet is also planning to build a 20-story office and hotel tower at 1603 Broadway. GrayStreet is also partnering with Midway on the Lone Star Brewery redevelopment.

GraySreet and Midway are asking for $8.9 million in reimbursement dollars from the Midtown TIRZ over several years to cover the infrastructure upgrades for the first phase, which is estimated to cost $146 million.

In a TIRZ, revenue earned from the rise in property values is recaptured and invested back into the zone in the form of public upgrades. The City of San Antonio has recently used the revenue to stabilize and create affordable housing.

For the entire Broadway East, GrayStreet is asking for TIRZ dollars and a Chapter 380 agreement totaling $20.5 million in public incentives.

“We will create over $160 million dollars in new tax revenue by 2030, including $65 million alone for the San Antonio Independent School District,” French told the Midtown TIRZ board, referring to revenue from property taxes, as well as sales and hotel occupancy taxes from the commercial tenants. The bulk of the properties were kept off the tax rolls because they were previously owned by the tax-exempt San Antonio Independent School District, which the district used to store its school buses.

Broadway East, because of its sheer size, would become one of the most significant developments in the downtown area since its resurgence started in 2009 with the Vistana apartment building. At the same time, neighborhoods like Government Hill have experienced gentrification because of the influx of new multifamily housing developments, especially those that abut or enter lower-income inner city neighborhoods. In recent years, GrayStar has met with and received the blessing of neighborhood group Government Hill Alliance.

Since Mayor Ron Nirenberg took office in 2017, San Antonio has prioritized the stabilization and creation of affordable housing, especially in an attempt to mitigate the effects of some of the neighborhood change. During the Midtown TIRZ meeting, French acknowledged San Antonio’s affordable housing goals.

He said commercial tenants, and guests who stay at the hotel, would pay a fee that would be funneled into an affordable housing fund that could be used by Government Hill or the city for affordable housing projects.

“We will create an annual fund to support affordable housing, community organizations and events, and maintenance of area homes and businesses, which will be administered in conjunction with the Government Hill neighborhood association,” French said.

“As you guys are certainly familiar with and have heard: the creation of dedicated affordable units is challenging and expensive in urban development,” he said.

For its part, GrayStreet and Midway will restrict the rent increases for some of the units based on the where the household lands on the consumer price index, during the life of the TIRZ agreement, which hasn’t been determined, yet. It’s also building a large amount of smaller units, “to help keep the prices down,” in the $1,200 to $1,400 price range for monthly rent. French said these prices are expected to serve people making 70% and 80% of the area median income.

[ Scroll down for a chart showing AMI levels. ]

During the meeting, Ramiro Gonzales, who serves on the Midtown TIRZ board, and who’s also the new president and CEO of the Westside Development Corp., asked French if GrayStreet and Midway were willing to take less reimbursement from the TIRZ so the area can keep more funding for affordable housing. Gonzales’ remarks reference the new role the city has made for San Antonio TIRZs in affordable housing, such as helping to fund the rental assistance program during to Covid-19 pandemic.

“I’d be interested in pumping less than 100%, that way more of that increment stays with the TIRZ,” Gonzales said.

Broadway East “is an incredible project and a great use,” Gonzales said. “I’m just concerned as it pertains to the TIRZ, our role is somewhat changing more and more. The city and others are looking to the TIRZ to fill that role.”

French said the total Broadway East project is expected to create 9,000 jobs during construction, and 2,600 full-time daily jobs from the businesses taking over the various spaces.

The project is expected to return to the Midtown TIRZ board for a vote in December, and to the City Council for final approval in January.

Setting It Straight: A previous version of this article misstated the stance of Government Hill United, one of three neighborhood groups in Government Hill, toward the project. It hasn’t taken a position.

[ninja_tables id=”21439″]

Previously published
Rezoned properties offer glimpse of GrayStreet’s 23-acre Broadway East campus (July 5, 2019)

Heron Editor Ben Olivo can be reached at 210-421-3932 | ben@saheron.com | @rbolivo on Twitter