[SAguy]

By W. Scott Bailey
Senior Reporter, San Antonio Business Journal

The pandemic has delayed work on a new 200-room hotel and an adjacent 150,000-square-foot office tower on the northwestern edge of Hemisfair that Zachry Hospitality initially hoped to complete by this time next year.

The company, which has yet to break ground on the buildings, is evaluating the economic impact of the novel coronavirus pandemic, while confirming that there is no timeline for beginning work on the landmark project.

Zachry Corp. Vice President Tara Snowden told me the company and its partner on the proposed project, the city of San Antonio, are working to “define what makes sense for the development in a post-Covid-19 environment.”

At the same time, the company is eager to break ground as soon as possible, Snowden said.

Hemisfair Park Area Redevelopment Corp. CEO Andres Andujar, who has led the ongoing transformation of the former World’s Fair site, said the organization is focusing on the eastern portion, including a planned Tower Park area and potentially more residential development.

“The financial impacts are definitely a challenge,” Andujar said. “As we wait for everything to get fully settled in the northwest zone, we have more time to continue to perfect the vision and use plan for Tower Park and the road infrastructure that’s under design now. It’s our goal to stay on schedule in the eastern zone.”

The toughest challenge for Andujar and other Hemisfair stakeholders has been an empty park as Covid-19 drove away business. Fortunately for those entrepreneurs who have opened at Hemisfair, they’ve been somewhat protected by a lease that bases their rent on a percentage of sales.

The downside to that model is less revenue for Hemisfair, which is also counting on funding through a rebate on state hotel occupancy taxes that have been deeply affected by the pandemic.

HPARC officials push on amid the economic uncertainties and the recognition that more funding is needed to redevelop the center city site.

“We’ll see how the banks react to the pandemic and the effect that has on development financing,” Andujar said. “What does not go away despite the challenges of the pandemic is that Hemisfair is an amazing property.”