District 2: Celeste Brown, (210) 207-2123
SAN ANTONIO (Sept. 26, 2018) — Today, the San Antonio Housing Trust Public Facility Corporation (PFC) approved resolutions for two catalytic projects on the City's Eastside: the Red Berry Estate Redevelopment and the Friedrich Lofts. Both projects include much-needed workforce housing and would have not come to fruition without the financial structuring provided by the PFC.
“Creating opportunities for all residents to have access to decent, safe and affordable housing has long been the charge of the San Antonio Housing Trust PFC,” said Rebecca Viagran, District 3 City Councilwoman and PFC Board Chair. “We know the need for equitable development in emerging areas requires creative thinking to accomplish impactful and lasting change. Were it not for this partnership, these projects would not be realized and two vacant, unused spaces would remain empty and unutilized.”
The PFC requires 50 percent of the housing units be leased to individuals or families whose combined income is at or below 80 percent of the Area Median Income (AMI). In exchange for meeting this requirement, the housing project is exempt from all ad valorem taxes for as long as the project continues to meet the affordability requirements.
“Twenty-eight years after Friedrich Air Conditioning Company closed its manufacturing doors, decades of missed opportunity at the corner of East Commerce and Pine Street are finally coming to an end,” District 2 City Councilman William ‘Cruz’ Shaw said. “This is an incredible time of economic growth for San Antonio’s Eastside. Thanks to the PFC and City incentives, the Friedrich Lofts and Red Berry Estate redevelopments will replace blighted structures and vacant lots with needed workforce housing to accommodate our growing community.”
Red Berry Estate
The Red Berry Estate is 85-acre property located at 856 Gembler Road which consisted of the Red Berry Mansion, an 11-acre man-made lake and vacant, undeveloped land. After the City acquired the property in 2012, it negotiated a Public Private Partnership (P3) process with The NRP Group, Casey Development, The RK Group and the PFC for a total project investment of $61.8 million for the following development phases:
- A 330-unit mixed income housing development with 50% of the units priced for families making less than 80% of the AMI.
- 169,000 square foot office building for RK Group to consolidate and relocate their headquarters from 1220 East Commerce.
- Restoration of the Red Berry Mansion to be reopened as an event venue managed and marketed by the RK Group.
- Construction of a half-mile extension of the Salado Creek Hike and Bike Trail System, a pedestrian bridge over the Salado Creek, public parking for the trail system, and restoration of the 11 acre man-made lake.
The City provided $6.7 million in funding to facilitate workforce housing, job creation and the retention of RK Group on the City’s Eastside. The City also provided an additional $3.8 million for public improvements to the site such as the stabilization of the lake and extension of the Salado Creek Trail System. Funding in the amount of $10,537,159 for the project and public improvements was made available through the following funding sources: $4,591,339 from Inner City TIRZ tax increment fund; $1,473,056 from the purchase price of the property; $1,076,865 in rebated City ad valorem property tax increment over 10 years; $540,579 from the Inner City Incentive Fund; $1,480,931 in FY 2017 Community Development Block Grant funds, and City and SAWS impact fee waivers in the amount of $1,374,389.
Over the next 20 years, the estimated property and sales tax revenue generated onsite at the Red Berry Estate is $3.5 million. As a result of the project, the San Antonio Independent School District will receive $8.5 million in taxes over a 20-year period. The local taxing entities will receive $16.2 million over a 20-year period. The City of San Antonio will receive $176,000 annually from ad valorem taxes and sales taxes form the property, versus the $60,000 spent annually on the property’s maintenance. More importantly, the Red Berry Redevelopment project provides an opportunity to an area that has seen years of disinvestment.
Public infrastructure site work is currently underway at the Red Berry redevelopment site. The Red Berry Apartment project is expected to close financing in early October and will break ground later that month.
The PFC today approved a term sheet with Provident Realty Advisors for the Friedrich Lofts Project, located at 1617 E. Commerce. This project will be structured in partnership with the PFC and underwritten by the U.S. Department of Housing and Urban Development’s 221(d)(4) program. The redevelopment will construct a total of 347 new multifamily units and a 725-space structured parking garage. Fifty percent of the residential units are affordable as a result of the PFC partnership and HUD program. 173 units will be considered market rate rents, 160 units will be reserved for persons at or below 80% AMI and 14 units will be reserved for persons at or below 60% AMI.
Last week, the San Antonio City Council unanimously approved a $2.3 million incentive package to assist in the $67 million Friedrich Lofts redevelopment efforts through a combination of Tax Increment Reinvestment Zone (TIRZ) funding and fee waivers on the City’s near eastside.
This East Commerce area corridor stretching from St. Paul’s Square to the Friedrich Property sits directly between the reinvigorated Dignowity Hill and Denver Heights Neighborhoods. This area has seen new life in recent years with several developments, including the new IDEA Academy, Sterling Property, Oscar Eason Senior Apartments and Baldwin Apartments. The Friedrich Redevelopment will be a capstone development anchoring the eastern section of this corridor.
Provident Realty Advisors is working with HUD to receive full underwriting approvals prior to returning to the PFC Board for final approval to authorize the full transaction.