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Exploring San Antonio's Exploding Urban Core

CITY-WESTON URBAN-FROST BANK ‘MEGADEAL’ STILL PENDING

Secrecy has surrounded the status of the unsolicited public-private partnership proposal submitted to the City last summer by Weston Urban and Frost Bank, a project that would add the fist new Class office tower to the city’s skyline since construction in the 1980s of the Weston Centre. The proposed tower would become the new corporate headquarters of Frost Bank, assuring their long-term presence downtown, and it would deed the exiting Frost Bank tower, where Wednesday’s luncheon was staged, to the City, allowing it to consolidate widely dispersed staff located in multiple locations.

A number of other City-owned properties, such as the Municipal Plaza Building and the former Continental Hotel, would be redeveloped by Weston Urban, and hundreds of new residential units would be built in the surrounding area, sparking what likely would be a decade-long redevelopment of the western downtown area north of Main Plaza.

From the downtown development proposal by Weston Urban and Frost Bank submitted to the City of San Antonio dated Aug. 8, 2014.From the downtown development proposal by Weston Urban and Frost Bank submitted to the City of San Antonio.
See more details about the three-way asset and development trade here.

“Having a new tower downtown would be huge, the last tower (built in San Antonio) was in 1988, the Weston Centre,” Houston said. “We’re very excited about the opportunity … but as (former) Mayor Julián Castro mentioned at the unveiling of this project is that it has to be cost neutral to the City of San Antonio.

“We’re really working to complete our due diligence and working with the leadership to make sure that this makes sense for everyone. And we hope to have an announcement in April-May timeframe.”

Primera Partners, the San Antonio-based owners of the 20-story Riverview Towers at 111 Soledad St., submitted a proposal to sell the building outright to the City and is also being considered.

Adelman impatiently called for the microphone to place an exclamation point on Houston’s remarks and suggest a more aggressive posture by the City leadership.

“I don’t think we can overstate the importance of this transaction,” Adelman said. He admitted he is not familiar with the financial details of the proposal, but said it is obvious that the City needs to consolidate its workforce into one place.

The other obvious advantage, he said, would be for San Antonio as a whole.

“(Allowing) a skyline-changing headquarters building for Frost Bank, a pillar of this community, is critical. The last thing we need is Frost Bank leaving (downtown),” he said. “What the public side needs at this moment is incredible leadership … to say that it has to be cost neutral (as Castro said), is very short-sighted. It should be cost appropriate.”

The City, he said, needs to lead by example and invest in its downtown development. The status of the Weston Urban proposal, which has been under review since Castro was still in office in July, remains the subject of much conversation and speculation in the downtown development community. Graham Weston is the co-founder and chairman of Rackspace, founder of the tech incubator and co-working space Geekdom, housed in the historic Rand building, which he purchased and is redeveloping, and a major philanthropic force downtown. Many feel that if he can’t succeed in making such a major public-private partnership work with the City than no one will be able to do so.

Houston’s prediction of news in April also produced a noticeable stir in the audience.

There was a lot of back and forth between Adelman and Houston on a variety of issues – to be clear, though, no one left the table defeated. Cities and its developers go back and forth every day as part of the process. At the end of the day, the City is beholden to its citizens – who also happen to be the development community’s customers.

“It started with the leadership and getting people to understand that if you have a healthy downtown, your entire city benefits,” Houston said, citing that in 2007, only $10 million of the bond program went to downtown development. In the 2012 bond program, $93 million was allocated. “But (ultimately) the community made downtown a priority.”

The coming 2015 bond, she suggested, offered the opportunity to accomplish even more.