With a price tag of $140 million, the proposed development, named Echo East, would be one of the East Side’s biggest construction projects since the AT&T Center. It would include about 500 residential units and 25,000 square feet of retail.
The city of San Antonio might sell land and offer an incentive for a massive mixed-use development that state Rep. Barbara Gervin-Hawkins wants to build near the AT&T Center, despite concerns that a study used to justify the project is unreliable.
City Council will vote Thursday on whether to sell about 10 acres of vacant land near the corner of East Commerce Street and Spriggsdale Boulevard to the nonprofit George Gervin Youth Center for $430,000. The nonprofit would also get an $450,000 economic development grant, drawn from property taxes in the surrounding area, that would be doled out gradually as construction progresses, according to the council agenda.
To continue reading this story,
TRY IT NOW
With a price tag of $140 million, the proposed development, named Echo East, would be one of the East Side’s biggest construction projects since the AT&T Center. It would include about 500 residential units and 25,000 square feet of retail, the agenda says.
The youth center would team up with Michigan company Foremost Development to build the project, which would sit on the city’s land and an adjacent 9.1 acres owned by the youth center.
Gervin-Hawkins, who served as the youth center’s executive director until she won election to the state legislature in 2016, has been trying to develop the site for almost 20 years. She has called herself the “lead person” on the local development team but told the Express-News in December she wouldn’t profit off the project. She didn’t respond to a request for comment.
“We believe that the community is ready for the development,” said Terry Bailey, co-founder of Foremost Development. “I think there was an extreme interest when the AT&T Center was developed that it would spur development in the area, and it hasn’t happened.”
Yet the city is not as confident as the developers that the site could handle such a large project.
Echo East’s developers commissioned a study from California-based Meyers Research showing strong demand for housing and retail in the neighborhood, but city staff determined that many assumptions that the study made “may not be reliable,” according to the council agenda.
The Meyers Research study chose to analyze the proposed development as if it were in the real estate submarket that includes downtown, the Pearl and Southtown, rather than the submarket it is actually in, which includes large parts of the south and east sides. The study says that the downtown submarket, which is only a few blocks away, is “more relevant” to the development because it would be in an urban neighborhood.
In determining what apartment rents the proposed development could support, the study examined some of the nicest complexes in the urban core, such as Agave Apartments on the River Walk and Can Plant Residences at the Pearl. The city’s analysis notes that its predictions for the project’s construction costs seem low.
Questions about the study led the city to include clawback provisions in its incentive agreement, said Verónica Soto, director of the city’s Neighborhood and Housing Services Department.
“It’s a much stronger agreement that puts in place stronger timelines,” Soto said. “That’s why staff is still moving forward.”
For his part, Bailey said the developers have faith in the study.
“I’m not sure what the city is using for their determination, but we feel very comfortable in the fact that we’ve gone to a professional organization to provide us a feasibility study,” he said.
In 2015, the city awarded a $150,000 grant to the youth center to analyze the site for development and create a master plan.
The proposed development has the support of some East Side residents who are hopeful that it would bring much-needed jobs to the area. But others are wary of the project, saying that it will tower over nearby single-family homes and drive up their property taxes.
In response to the community’s concerns, District 2 City Councilman William “Cruz” Shaw delayed a council vote on the project scheduled for late last year. He didn’t respond to requests for comment.
Echo East’s development team still isn’t sure how it will finance the project, and it is working out details such as the number of residential units and parking spaces, Bailey said. It is studying sources of financing such as federal tax credits for affordable housing, he said. The team has talked with other potential financial partners, he said, while declining to name them.
“There’s not anything at this point in time that’s not a consideration,” Bailey said. “We have ideas, but at this point in time they’re ideas.”
Some local developers have received property tax exemptions for apartment complexes by partnering with a nonprofit that keeps ownership of the land. Bailey said he wasn’t sure if the youth center would have any ownership of the proposed development.
The grant agreement that council will vote on Thursday requires the George Gervin Youth Center to spend about $65 million on the project.
Foremost has developed apartment complexes all over the U.S., but Echo East would be its largest project by far, according to its website. The company’s projects in recent years have had price tags ranging from a few million dollars to $35 million.