With grand plans to revive St. Paul Square with local bars and restaurants, REATA Real Estate is getting ready to purchase five more buildings, which are currently owned by the city of San Antonio. The purchase would increase the San Antonio-based company’s holdings in the east downtown district to at least a dozen.
In December 2017, REATA made its first big purchase by acquiring several St. Paul Square properties from Zachary Corp. In that transaction, REATA also assumed leases on the five buildings it’s now preparing to buy, and also on the Sunset Station depot venue, which is owned by VIA Metropolitan Transit.
In a roughly $8.5 million effort, REATA plans to rehab the buildings primarily along East Commerce Street and fill them with local restaurants and nightlife options. The company has already started. Toro Kitchen & Bar, for example, opened in March. Lilly’s Greenville is a neighborhood bar which also opened in recent months. A pho restaurant is slated for 1167 E. Commerce St. opposite barbecue restaurant Smoke.
REATA also plans to reactivate Sunset Station, the St. Paul Square courtyard and the Spire event spaces. The goal is to activate the area year-round. For many years, St. Paul Square has been predominantly frequented by people attending events at Sunset Station or the neighboring Alamodome.
“It’s really food, beverage and entertainment,” Lisa Hernandez, REATA’s director of special projects, said. “We’re not tearing down any buildings. We’re not building any skyscrapers. We’re really just enhancing buildings that have sat vacant for so many years.”
The makeover will require minor construction.
Two weeks ago, the Inner City TIRZ board granted REATA $1.3 million for public upgrades that include new signage and lighting, crosswalks and sidewalks, landscaping, exterior awnings and rehab work to the exterior of Sunset Station. REATA is chipping in another $4 million into Sunset Station, and $3.2 million to rehab other building interiors, according to the city.
REATA has no plans to purchase Sunset Station, Hernandez said. Property records show the entity REATA purchased also owns the parking lots around Sunset Station.
Hernandez said REATA will spend the next 12-18 months rehabbing and leasing the rest of its buildings. Construction on the infrastructure upgrades is expected to start in three months, she said.
City officials said they agreed to sell the buildings because of the firm’s commitment to resuscitating St. Paul Square. As a tenant of the five buildings, REATA was having trouble securing corporate financing to renovate the historic structures, which had 20 years remaining on its leases.
“It was important to us that we had a plan that made sense with an entity whose strength is in this type of retail environment,” said Pete Alanis, the city’s real estate administrator. “There have been a lot of attempts over the decades to try to revitalize this area.”
When asked what makes this makeover attempt different than past attempts at St. Paul Square, Hernandez said REATA “has 18 years of commercial and property management experience. They were founded here. They know the business very well. They’ve done this a few times.”
According to the city, the properties were appraised at $1.5 million by an independent appraiser. The city is selling the properties for $1.7 million, which will feed into the city’s Community Development Block Grant program.
The city, which collects roughly $100,000 a year from the five properties, will have the option to buy them back if they’re not “substantially renovated within a two-year period.”
As part of the deal, the city can use the Lone Star Pavilion 12 days of the year for events at no cost.
REATA and city officials are hoping the St. Paul Square project will create a kind of near-East Side synergy with other developments happening nearby. VelocityTX, an accelerator hub for bioscience and life science companies, is currently under construction on the site of the old Merchants Ice House. Neighboring projects such as The Baldwin, which was recently sold, and the condo high-rise Vidorra add a few hundred residents a stone’s throw from St. Paul Square.
The Planning Commission approved the sale last week. The City Council still has to sign off on the transaction in the coming weeks.