It is safe to say that no developer dominates a single emerging urban district in San Antonio as much as the partnership between developer David Adelman, and real estate executives Michael Jersin and Don Thomas of CBRE dominates St. Paul Square.
The 20-story condo high-rise Vidorra first popped up there in 2009, and the 271-unit apartment building The Baldwin followed in 2018. But efforts to revitalize St. Paul Square have been sporadic, at best. Now comes the continued investment by this partnership, which has gone by the name East Commerce Realty LLC.
Over the last five years, the partnership has gained control of more than a dozen buildings in the tiny district wedged between Interstate 37 and the railroad tracks east of downtown, with a goal of turning it into San Antonio’s premier entertainment destination. Most notably, they have turned the former Sunset Station train depot, which they lease from VIA Metropolitan Transit, into The Espee, an entertainment venue that hosts the 1902 Nightclub. But most of St. Paul Square they own.
Last week, they teamed up with local hotelier Charles Leddy to buy one of the few major assets they did not yet control there: the 11-story Staybridge Suites hotel, across the street from The Espee. They also bought a 1.3-acre parking lot nearby.
They plan to renovate the 138-room hotel, 123 Hoefgen Ave., into more of a boutique property, bringing life to its ground floor and surrounding streetscape to complement their efforts in the surrounding neighborhood, said Leddy, whose company Presidian Hotels and Resorts will manage the hotel.
“With David and Don and Michael having a large control of all the real estate in St. Paul Square, the goal is going to be to make the hotel an important component of what St. Paul Square becomes,” Leddy said. “The vision, over time, is to upgrade the hotel in ways that really enhance the desirability of St. Paul Square as a place to stay.”
They purchased the Staybridge from SSG Hotel LLC, which is linked to Zachry Construction Co. and is headed by its President and CEO David Zachry, according to county property records and state corporate filings.
The project is still in an early stage and the partners aren’t ready to share details, Leddy said. The hotel will remain a Staybridge Suites as they make initial improvements; later, there will be a second round of investment, and it has yet to be determined what will happen to it then, he said.
With the purchase of the Staybridge and the nearby parking lot—south of Gonzales Street between Hoefgen and the Interstate 37 access road—Adelman and his partners now own 3.8 acres of property in the neighborhood, with roughly 13 buildings containing a total of about 200,000 square feet of floor space, including the 114,000 square-foot Staybridge, according to the Bexar Appraisal District. That doesn’t include The Espee, for which they have the ground lease with VIA.
Their holdings include several historic buildings on and around East Commerce Street, many of which they have filled with trendy bars and restaurants such as Toro Kitchen + Bar, Cellar Mixology and Cuishe Cocina Mexicana. They also own The Spire event venue on Center Street, across from The Baldwin.
In 2019, the City Council approved the sale of five buildings it owned at St. Paul Square to the partnership. The same year, the city approved $1.3 million in tax increment reinvestment zone dollars for public upgrades in the district.
“I’m a San Antonio native, and I feel that the St. Paul Square historic district is going to be an important hub for San Antonio for entertainment, food and office,” Leddy said. “It’s a very unique part of San Antonio. It’s adjacent to the (Henry B. Gonzalez) Convention Center and all the important things that are going down.
Along with the Staybridge, the partners purchased many of their properties from entities linked to the Zachry family. Decades ago, Zachry Co. CEO Bartell Zachry envisioned turning St. Paul Square into an entertainment district and purchased much of the neighborhood’s real estate.
Other developments outside this partnership are also in the works.
At East Commerce and Chesnut, local investment group Weinritter Realty is currently renovating and expanding the Best Western into the boutique brand Aiden by Best Western, which will include a speakeasy.
On the other side of the tracks, on East Commerce, Fort Worth developer Vaquero Ventures is planning to build a 342-unit, five-story apartment building, on property formerly owned by Quadrant Investment Properties of Dallas, and the RK Group before that.
Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter