A $55.9 million mixed-used development on 2.75 acres on the southwest corner of Broadway and Jones Avenue, which is exempt from paying property taxes because of how it’s structured, is likely to hold a city-backed incentives package worth $2.1 million.
On Friday, the Midtown Tax Increment Reinvestment Zone (TIRZ) board approved a $680,000 incentive for the project, known as Broadway Jones, which is being developed by NRP Group and a city nonprofit called the San Antonio Housing Trust Public Facility Corporation (PFC). City Council still needs to approve the subsidy, which will reimburse the developer on public upgrades related to streets and sidewalk, overhead power, among others.
The 283-unit, five-story development is also due to receive incentives under the former Center City Housing Incentives Program (CCHIP) worth $1.5 million — $1.1 million in city and SAWS impact fee waivers and $417,500 in a mixed-use loan.
CCHIP is currently on pause as city officials revamp the program so that it aids affordable housing throughout the city.
Of the 64 CCHIP projects that received incentives prior to the moratorium, which City Council approved in January, the vast majority include a lucrative rebate on city property taxes over 10- or 15-year periods. But Broadway Jones doesn’t include such a rebate, because it’s already exempt from paying taxes.
It’s a extremely complex arrangement in which the city-created San Antonio Housing Trust Public Facility Corporation owns the property, and therefore is exempt from paying property taxes of any kind — city, county, school, etc. — under state law.
In exchange, a certain percentage of units are made available to people making less than the area median income (AMI).
For a much better explanation of how these deals work, take the time to read this comprehensive report by Express-News reporter Richard Webner that was published at the beginning of the year.
For the Broadway Jones apartments, half of the units, or 142, will be rented to people making 80 percent of the area median wage. The other 141 will remain market-rate.
What’s completely unclear, even after a handful of interviews the Heron has conducted with experts in the field, is whether the people making 80 percent of the area median wage still have to pay market-rate prices. Some say “yes,” some say “no.”
Here’s what NRP Group had to say in a statement to the Heron:
“Rents at this development haven’t been finalized, but through our partnership with the San Antonio Housing Trust Public Facility Corp, we’re able to offer lower rents for a portion of our residents who make less than 80 percent of San Antonio’s AMI. We’re excited to bring high-quality apartments to this area, and for the opportunity to provide more residential options to the thriving workforce there.”
The project also includes 16,000-square-feet of retail space on the first two floors that will face the corners of Broadway and Jones, Broadway and Tenth Street, and Broadway and Avenue B. Developer James Lifshutz, the property’s owner since 1999, will purchase, and pay property taxes on, the retail space, according to the Express-News article.
Construction is set to begin Dec. 7, according to documents submitted to the Midtown TIRZ. Tentative completion date is Jan. 31, 2021.
In a TIRZ, the revenue gained from the rise in property taxes is reinvested into public improvements within the zone.