The City Council on Thursday approved the sale of five properties at St. Paul Square to a company composed of REATA Real Estate, the local commercial retail giant, and AREA Real Estate, which is led by developer David Adelman—which had been leasing the buildings from the city. The council also agreed on a $1.3 million tax increment reinvestment zone (TIRZ) grant for public upgrades to the once-vibrant, near-East Side district.
Both actions were done without discussion.
The REATA-AREA partnership, called East Commerce Realty Llc, now owns at least a dozen properties at St. Paul Square. It plans to invest more than $7 million to resuscitate St. Paul Square into a year-round destination of restaurants and bars, and concerts, and other events.
REATA has already invested $4 million into rehab work, and wants to invest another $3.2 million.
The company said it was struggling to find corporate financing to renovate the historic buildings, because it didn't own them. For this reason, and because of REATA's track record in commercial retail, the city agreed to the sale, city officials said. There was 20 years left on the lease.
In recent years, REATA has been recruiting restaurants and bars to inhabit St. Paul Square. Most recently, Toro Kitchen & Bar and bar Lilly's Greenville have opened on East Commerce Street. The folks behind Suck It: Restaurant & Bar are planning to open an Asian fusion restaurant at 1167 E. Commerce St., in a small space across from Smoke—both buildings are owned by East Commerce Realty.
In a recent interview, Lisa Hernandez, REATA's director of special projects, said the public can expect more restaurant and entertainment tenants to fill up their buildings, as they finish renovating them, in the coming months.
It also wants to reactivate event spaces Sunset Station, which it leases from VIA Metropolitan Transit, as well as the gas-lit St. Paul Square courtyard and the Spire, which it will own after the sale.
"It's really food, beverage and entertainment," Hernandez told the Heron last month. "We're not tearing down any buildings. We're not building any skyscrapers. We're really just enhancing buildings that have sat vacant for so many years."
The other component is concerts and events. For Sunset Station, it seeks a return to the 2000s, when such international acts as B.B. King, The Flaming Lips, and Muse played the venue.
The city has agreed to sell the properties for $1.7 million, which will feed into the city’s Community Development Block Grant program. The properties were appraised at $1.5 million by an independent contractor hired by the city.
The $1.3 million in public upgrades to the area include new signage and lighting, crosswalks and sidewalks, and landscaping, and are expected to begin later this year.
In December 2017, REATA purchased several properties from Zachary Corp., in a transaction where the company also assumed leases on the five buildings it is now purchasing.
City officials project the city will gain $9.2 million in sales tax revenue, and $600,000 in property tax revenue in the next 10 years assuming REATA is successful in reviving St. Paul Square.
Currently, the city receives roughly $100,000 from annual rent of the five properties.
The area is named after the Old St. Paul Methodist Episcopal Church, which was built between 1870 and 1880, according to the city. By the mid-20th century, the area was a vibrant African-American community of restaurants, stores, and offices. But the square's decline started in the 1960s, with the construction of Interstate 37, according to the city.