It appears the San Antonio Housing Authority (SAHA) is becoming one of downtown’s chief development players.
Through two nonprofit entities it created, SAHA is partnering with JMJ Development of Dallas on the St. Mary’s Tower, a 24-story apartment high-rise with a rooftop pool on the southwest corner of Villita and South St. Mary’s streets.
SAHA’s involvement grants the public-private partnership a property tax exemption on the tower. In exchange, according to state law, the partnership will offer half of the 250 units to households making 80 percent of the area median income (AMI), or less; the other half will be market-rate priced. JMJ CEO Tim Barton said in an email that he’s been asked to offer some units at 60 percent AMI, presumably by SAHA, but he didn’t give specifics.
Barton also said it was JMJ who approached SAHA about the partnership.
The area median income (AMI) for a family of four in the greater San Antonio area (Bandera, Bexar, Comal, Guadalupe and Wilson counties) is $71,000, according to the U.S. Department of Housing and Urban Development. Here’s how it breaks down for lower-income households:
» 80% – $56,800
» 70% – $49,700
» 60% – $42,600
» 50% – $35,500
» 40% – $28,400
» 30% – $21,300
SAHA did not respond to an interview request for this report.
“By targeting this AMI level, the St. Mary’s Tower will be able to offer affordable housing within walking distance for an extremely large population of professional and service-oriented employees working in downtown San Antonio,” the authority said in a recent agenda.
[ For more info, download the San Antonio Housing Facility Corporation meeting agenda (pages 115-134) dated July 18 from SAHA’s public meetings page. ]
The $62 million tower will consist of 17 stories of apartments on top of a seven-story, 290-space parking garage. The apartments will have private balconies and island kitchens.
JMJ is still proceeding with the development of a 24-story riverfront tower, consisting of 226 market-rate units, across the street, which it’s calling Villita Tower. SAHA is not involved in this project, Barton said.
SAHA will use two public facility corporations (PFCs) it controls, nonprofit entities, to purchase the land and issue tax-exempt bonds for the St. Mary’s Tower. Under state law, a development built on PFC-owned property receives a full tax exemption as long as half the units are priced at 80 percent AMI or less, which the development community characterizes as affordable housing.
SAHA will also serve as the general contractor on the project, a strategy meant to eliminate sales tax on construction costs.
To fund the project, SAHA-JMJ will pursue 4 percent low-income housing tax credits, tax-exempt bonds, taxable bonds, and private equity, according to the agenda. The agenda doesn’t name the private equity provider, but it does say investors can expect an 8 percent return on investment. It’s unclear if JMJ is chipping in its own equity.
According to the agenda, JMJ will procure 75 percent of cash flow from the tower; SAHA would garner the other 25 percent.
The San Antonio Housing Public Corporation, one of SAHA’s PFCs, would have to purchase the land at 126 Villita St., which is currently owned by CLTR Properties, according to the Bexar Appraisal District.
According to the agenda, the partnership is looking to fund the purchase the land, which is appraised at $1.6 million, as well as public infrastructure, and the construction of the parking garage through Bexar County and city incentives—which include tax increment reinvestment zone dollars. The parking garage will be made available to the public during the day, according to the agenda.
Under the city’s Center City Housing Incentive Policy (CCHIP), the St. Mary’s Tower would likely qualify for SAWS impact and city development fee waivers, as well as up to $10,000 per affordable unit (roughly 125 units) toward public infrastructure costs in the form of a grant. These incentives would apply as long as the average rent does not exceed $2.92 per square foot, which the city considers luxury.
It’s worth noting: CCHIP also provides a 75 percent rebate on city property taxes over 15 years, but SAHA’s PFC involvement already grants a full property tax exemption as long as the PFC owns the property.
The Villita Tower, however, is a different story.
JMJ owns the riverfront property and would be obligated to pay its property taxes. It will qualify for the 75 percent city property tax rebate as long as the average rent is under the $2.92-per-square-foot cap. The fee waivers would kick in as well. It would only receive an infrastructure grant as long as at least 10 percent of its units were priced at 80 percent AMI or less.
In 2017, Barton told the San Antonio Express-News he expected a $70 million price tag for Villita Tower, and that rents would range between $1,500 and $3,000.
The rise of PFCs
Not too far away, on Nueva Street, SAHA is joining with Austin developer Dennis McDaniel on an eight-story mid-rise called St. John’s Square.
The housing authority continues to develop across from Hemisfair and just received approval last week from the Zoning Commission on its fourth development, on Labor Street. It already owns and operates the Marie McGuire (North Alamo) and Villa Hermosa (North Flores) senior apartments.
It’s because of its ability to bring a full property tax exemption to projects, through its PFCs, that SAHA is an attractive partner for private developers.
Here’s how they work:
Keep in mind, other public entities have PFCs, and have already built multifamily developments. The San Antonio Housing Trust Public Facility Corp. (city of San Antonio) and The Flats at River North (NRP Group) and The Baldwin (NRP Group), to name a few. The HemisFair Park Public Facilities Corporation (Hemisfair) and The ’68 (developer David Adelman). The ACCD Public Facilities Corporation (Alamo Colleges) and the Tobin Lofts (NRP Group).
For developers, they benefit from a full property tax exemption, which makes the project possible and more profitable.
For public entities, their participation means the creation of affordable housing.
Setting It Straight: A previous version of this article misstated the owner of the building at 126 Villita St. It’s CLTR Properties.
Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter
The ‘68 is hideous, and it’s proximity to Yanaguana will put an end to the relaxed family atmosphere. The Tobin Lofts are a nightmare! Horribly managed, dangerous, and yet still profitable. This is where all of the new construction is headed. Sell the heart and soul of the city to profiteers. Heartbreaking for us in Lavaca, to watch, and to realize our kids will not be able to afford to live down here ever. Born and raised here, I will relocate rather than watch them kill the ambience, and drive off the families that kept downtown warm and real.
With respect, this is how cities grow. This growth is what we need in order to make San Antonio more sustainable. We can’t keep building low rise structures that consume resources and space, individually. A dense core is the key to the survival of the city in the future. The ’68 is a wonderful development that will allow kids who live there a back yard to play in. The key to keeping families downtown is building places for kids to have fun. I am born and raised here too, I also live in Lavaca, I am ready for these developments to help our city become the city that we are and intend to be.
Bye! Let’s focus on those willing to adopt to their surroundings for a better future.
What are you even talking about? This article literally talks about SAHA building three residential buildings in downtown that will provide affordable housing yet you paint a false picture of a future where your children can’t afford to live downtown. First off, did you even read this article? Second, do you think so little of your kids or anyone’s kids that you think they’ll do so poorly in their lives that they won’t be able to afford market rate or below market rate rents?
Such a pathetic comment you decided to “gift” us.
Well I think it is best you relocate. The direction to which San Antonio is headed is what is badly needed. As I recall 5-10 years ago downtown San Antonio was nothing more than empty buildings and parking lots with an abundance of vagrants and blight. Families would go to the mall which with new developments and restaurants has made the Riverwalk a lot better. And if I’m correct the location of this project and Lavaca it should not be a bother to you. Stop complaining and be grateful we are now receiving interest from outside developers and businesses. If you don’t like it, stay in Lavaca.
As for relocating, I’ll do as I please. I have several properties in nice areas. But I have little interest in paying taxes on them while the moneyed interests make bank, use our resources and enjoy caps and exemptions in the process. Lavaca wasn’t always nice, Victoria Courts wasn’t that long ago. I find it interesting that you think the city task forces and out of state developers are going to make us better. Tobin hills isn’t better, and neither is Probandt @ Bluestar…crime rate is up. But you are right about one thing…I should sell out and leave, while I can…
I never suggested low rise as a solution. High rises are fine. There are other locations NOT in the middle of the hemisfair grounds that could be utilized. With respect “families” are not the the target group for the 68, nor The Tobin Lofts, The Flats, etc. The mean salary here is not $71K, so “affordable” is not based on reality. Growth is great, but there are eyesore already owned by SAHA that should be incentivized before we give 75 year exemptions to big $$ developers. The SAHA and the PFC are free to wheel and deal without accountability. I think we should address that publicly.
The wretched part of all this is that no affordable housing comes out of this program. These developers are not required to lower their rents and they don’t. Everyone gets screwed in this deal except the developers. I can’t believe that this has gone on for so long with nobody noticing.
I see what I consider a mistake made by others in the plan. The best apartment units with balconies facing the river, also face West and will suffer from direct sun (noon till sunset), making the balcony mostly unusable. Everyone suffers some. My Southtown unit faces an ideal N/NE. We suffer mostly in the Summer with irritating morning sun (relief about 9-10) until the earth shifts enough (Aug-Sep) to make it a minor concern. South and West exposures have the most impact on balcony use in my observation.
Any urban planner would say there is no such thing as too much density. I’ve lived here for over 35 years and have waited for any semblance of downtown development. I too live near downtown and I am ecstatic about all of the new housing that we are seeing. It’s a suburban attitude to think that you can live in the surrounding down town neighborhoods and still have such little density as what now exists.