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San Antonio Pitches In $24 Million To Redevelop Lone Star Brewery

The shuttered Lone Star Brewery has been vacant for 25 years.
The shuttered Lone Star Brewery has been vacant for 25 years.

San Antonio City council approved $24 million in funding for private developers to transform the former Lone Star Brewery, south of downtown.

The $596 million project will rehabilitate the 32-acre lot that has sat vacant for 25 years into apartments, high-end amenities and some parkland.

The vote is the most tangible evidence that the latest attempt to rehab the defunct piece of river front property could succeed. The brewery has sat vacant since 1996. This is not the first time developers have talked about redeveloping.

A $300 million 2016 plan came undone after partnering firms on the deal had a falling out.

Thursday’s council vote — in addition to giving a big chunk of change — sets timelines for the project.

The first phase — which will cost at least $166 million — would need to be started within 12 months and completed by the end of 2024. City staff said it was expected to begin at the end of 2021.

In recent years the property has suffered multiple fires — including one in late April. The appearance has been marred by graffiti and decades of neglect.

“The truth is Lone Star has been a blight on the city and the district for 25 years,” said Shirley Gonzales, District 5 councilwoman at council. “We know that the fire that was most recent that everyone will recall was just one of many."

Gonzales’ eight years on council have been punctuated with attempts at revitalizing the section but to no avail. She said this project was exactly what her district and the city needed.

The project is the highest profile and dollar deal in her low-income district, one that doesn’t generally attract investment.

“Every project in district five is going to require significant incentives,” she said.

The district encompasses much of the southern portion of the city, mostly to the west, with jutting sections to the east, including the section including Lone Star and nearby Roosevelt Park. The district has suffered from a lack of investment for generations. This segment has seen the most activity in recent years; just a few blocks away in a neighboring district, Southtown and Blue Star thrive with new multi-family units, restaurants and shops being well established.

Artist rendering of proposed Lone Star District
Artist rendering of proposed Lone Star District

There was limited opposition from the community at council with just one speaker voicing concern. Tex Morgan said investors were buying up nearby property in expectation of a pay day, and he’s seeing it reflected in his property value assessments.

“Half of them were owned by corporations, LLCs, investment groups and even people who are out of state,” said Morgan about the comparable properties Bexar County used to raise his home’s assessed value.

Gonzales noted that property values were soaring across the city regardless of the major development, and stressed the need for new residential builds in the district.

More than 1,200 housing units are expected to be built on the 1 million square feet they will develop. About 20% are called “affordable” with rates set against 80% of area median income.

“That doesn't provide affordable housing, that's still pretty expensive for a lot of families in SAISD,” said John Courage, District 9 councilman.

The project does include money for a study on its impact on nearby residents, and whether they are displaced. City Council said the project was supported by the nearby neighborhood associations.

San Antonio-based GrayStreet partners and Houston-based Midway are the developers. GrayStreet partners has developed many buildings in downtown San Antonio. It purchased the Lone Star property in 2020. Midway has developed many mixed-use properties across the state, including Houston’s CityCentre.

The $24 million will be paid out over 15 years from the Tax Incentive Reinvestment Zone fund, which is intended to increase the assessed value of an area. The tax revenue increase is seen as just one of the benefits. GrayStreet’s Peter French estimated the value in increased taxes could exceed $100 million for the San Antonio Independent School District over 15 years as a result of the development.

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Paul Flahive can be reached at Paul@tpr.org