USAA abandons downtown San Antonio deal
Updated 3:00 pm to reflect city response and additional details.
An incentive deal once called “a game changer” by local government officials that would have moved 2,000 employees downtown from one of the city’s largest employers in exchange for roughly $6.5 million, is now officially dead.
In late 2017, the city and county offered tax abatements and loans to USAA to move employees to its buildings in the heart of San Antonio. The move would support the city and county push to redevelop and “activate” downtown streets with residents while USAA could offer an urban work setting to millennials.
“Like many companies, the pandemic and a shift to hybrid and remote working have changed our real estate needs,” said Christian Bove, lead communications director for USAA.
The company continues to have an unspecified number of employees at 300 Convent St. and One Riverwalk Place. It may sublease areas of the buildings first identified as for employees.
USAA says it’s canceling its incentive package with the city. The city loaned USAA $4 million to expand a garage and gave it a 10-year abatement originally valued at $2 million.
“USAA is ending its incentive agreements with the city and county and will fully reimburse any advanced funds and/or abatements,” Bove said.
USAA said the loan was repaid in February, and the abatement was recouped last month. According to the city, USAA repaid $4 million in loan dollars, and $54,000 in tax abatements, there was no mention of interest.
Bexar County voted Tuesday to terminate its incentive package and recoup the estimated value of the intervening years. The amount is estimated at $13,000, while the original value of the 10-year deal was originally valued at more than $1,000,000 in 2018.
“I think they have a lot of ambition about being both landlords and about moving more USAA folks downtown,” said David Marquez, economic and community development executive director for Bexar County. “But it's been disrupted for a while, they may very well come back, you know, in three, four or five years.”
USAA had moved nearly 500 employees into the two buildings by mid July 2018 with the goal of having more than 800 by the end of that year.
Bove said in an email the company had reached 1,600 in downtown at one point and was keeping space to accommodate up to 1,000 hybrid workers downtown.
The now defunct county incentive deal only required the company maintain 300 employees on the two sites.
The decision to move jobs downtown was viewed as a major development. Former city manager Sheryl Sculley — who helped push the incentives package through — called it a “game changer.” Billionaire philanthropist and former tech leader Graham Weston said it was “the biggest thing that ever happened to downtown.”
Weston has significant real estate holdings downtown through his company Weston Urban.
Just as business experts saw the deal as a significant development for that industry, they see the announcement that USAA has changed course as a major blow.
“The disappearance of this opportunity has to be seen as a major hit,” said David Heard of industry advocacy group Tech Bloc.
The jobs had been slated to be largely technology positions, raising the hopes of businesses there, which have worked for years to create a critical mass of technology companies in the area called the “Tech District.”