I agree with much of what you said.
Why not designate this in a new location and start new? Create a bookend for the downtown library. at&t was supposed to build a parking garage in the area of the auditorium (or so I thought). Maybe that has been worked into their plans?
The auditorium was on fire in 1979 and there was some effort to restore it to what it is today.
http://www.sanantonio.gov/convfac/MA/maoverview.asp
Seems like that's worth retaining.