The San Antonio Housing Trust Public Facility Corp. (PFC) board on Wednesday agreed to enter a memorandum of understanding with nonprofit developer Alamo Community Group on the construction of the 140-unit Cattleman Square Lofts in west downtown.
The apartment development is considered one of the rare affordable housing projects downtown, which will eventually offer rents to household making as low as 30% of the area median income (AMI) or less, which is $21,600 for a family of four in the San Antonio-New Braunfels region. Only two units will be priced at market-rate.
Much of the new downtown housing being built is unaffordable to the workers who comprise the downtown hospitality industry. The Cattleman Square Lofts would help fill that need.
Council members Roberto Treviño (District 1), Rebecca Viagran (D3), Dr. Adriana Rocha Garcia (D4), Shirley Gonzales (D5) and John Courage (D10) are the five Housing Trust board members.
The $26.4 million project is located at 811 W. Houston St., across from the VIA Metropolitan Transit's Centro Plaza hub on Frio Street, and is therefore considered a transit-oriented development.
To make housing this affordable, the project will require nearly every public incentive available.
Alamo Community Group (ACG) can take advantage of public incentives made possible by the partnership with the San Antonio Housing Trust PFC, most notably a full property tax exemption. The Housing Trust Finance Corporation will also issue up to $15 million in tax-exempt multifamily revenue bonds to help pay construction costs.
The PFC and Finance Corporation are both entities of the San Antonio Housing Trust.
Last month, the City Council issued a letter of no objection toward ACG's pursuit of 4% low-income housing tax credits, which is expected to yield $7.1 million.
» Address: 811 W. Houston St.
» Development partnership: Alamo Community Group (San Antonio); Enterprise Community Partners, Inc. (Maryland); San Antonio Housing Trust
» Property owner: Alamo Community Group
» Occupancy: N/A
» Rent or Buy: Rent
» Height: Four stories
» Land size: 1.57 acres
» Total units: 140 units
» Market rate: 2
» 80% AMI: 40
» 70% AMI: 8
» 60% AMI: 36
» 50% AMI: 29
» 40% AMI: 8
» 30% AMI: 17
» Student Units: 0
» Section 8: Will accept voucher
» Parking: 30 spaces
» Construction start date: First quarter 2021
» End date: Mid 2022
» Architect: Sage Group (San Antonio)
» Cost: $26.4 million
» Investors: Enterprise Community Partners, Inc. (Maryland), $7.9 million from purchase of 4% low-income housing tax credits; Raza Development Fund (Phoenix), $2.8 million for land purchase
» Financing: Harper Capital Partners (New York), U.S. Department of Housing and Urban Development-insured 221(d)(4) loan.
» San Antonio Incentives: Eligible for $1,039,366
» SAWS Fee Waivers: $539,366
» City Fee Waivers: N/A
» City Loans: N/A
» Est. City Property Tax Rebate: N/A
» Tax increment reinvestment zone (TIRZ): $500,000 grant
» Bexar County Incentives: N/A
» Texas incentives: Full property tax exemption from the San Antonio Housing Trust PFC provided to public facility corporations under state law (appraised in 2020 at $3.2 million); $3 million Texas Department of Housing and Community Affairs Multifamily Direct Loan Program
» Federal incentives: $11.7 million tax-exempt multifamily revenue bonds (received up to $15 million total); $7.9 million from 4% low-income housing tax credits (see "investors")
» Other: $1.2 million deferred developer fee
» Cashflow: Unknown
[ Editor's note: The figures shown here are the latest we know of, but they do change. In the timeline below, we have preserved what they were at the time of the reporting. ]
Sept. 17, 2020
The City Council issued a resolution of no objection toward the Cattleman Square Loft's pursuit of 4% low-income housing tax credits.
Alamo Community Group's application for the tax credits will be considered in January by the Texas Department of Housing and Community Affairs. The tax credits are expected to yield $7.1 million after they're sponsored by investors, which will generate equity to help build the project. If approved, construction is expected to begin in March and be completed in June 2022.
Aug. 26, 2020
The Cattleman Square Lofts received a boost when the San Antonio Housing Trust board agreed to pursue being a partner in the deal.
If the deal eventually closes, Alamo Community Group will benefit from a full property tax exemption and up to $15 million in tax-exempt multifamily revenue bonds, both incentives made possible by the San Antonio Housing Trust's involvement.
The Cattleman Square Lofts is considered one of the first transit-oriented developments in San Antonio, if not the first, meaning it's in close proximity to a transit hub, VIA's downtown station, and therefore includes limited parking spaces for its tenants.
The tenants "can actually live in this development and not have to be dependent on a vehicle, or have the additional cost of a vehicle, but have full access to transportation that gets them to employment centers or recreational centers," ACG Executive Director Jennifer Gonzalez told the trust board, which is composed of five City Council members, during its Wednesday meeting.
ACG intends to spend $11.8 million of the $15 million in tax-exempt bonds, as well as $7.1 million in equity from the syndication of 4% low-income housing credits to Enterprise Community Partners, Inc. of Maryland. [Scroll down for a full list of incentives.] Pete Alanis, the Housing Trust's executive director, said the project was $1.8 million short, but added the trust would help ACG identify funding sources to fill the gap.
ACG purchased the 1.57 acres of land from Alamo Colleges District in October for $2.8 million in a bidding process that included the University of Texas at San Antonio (UTSA). The property also includes the Talerico store and homestead, a local landmark, which will be incorporated into the new development.
The Housing Trust has been criticized for mainly partnering with for-profit developers. This is the first partnership where the trust, which is a city nonprofit, is partnering exclusively with a nonprofit developer.
By early 2022, the area should be picking up with construction activity.
UTSA plans to quadruple the size of its downtown campus, which is located two blocks west of the Cattleman site. Six blocks east, on the other side of Interstate 35, the first building, which will house UTSA's School of Data Science and National Security Collaboration Center, is expected to begin construction in December.
A block west of Cattleman, on the other side of the transit hub, VIA is searching for a developer to renovate the old Scobey industrial complex on North Medina Street into a mixed-use development, a first for the transit agency.
Elsewhere downtown, ACG continues construction on the 94-unit Museum Reach Lofts near the Pearl, which will boast predominantly apartments priced for people making between 30% and 60% AMI.
The Texas Bond Review Board awards Cattleman Square Lofts up to $15 million in multifamily revenue bonds. Nonprofit developer ACG has until Feb. 14, 2021, to close on the deal.
April 28, 2020
The San Antonio Housing Trust's Finance Corp. board votes to pursue a bond allocation on behalf of the ACG to the Texas Bond Review Board.
Application is for the Cattleman Square Lofts, a rare affordable housing apartment building planned for 811 W. Houston St. ACG turned to the Housing Trust, which is able to issue bonds as well as offer a full property tax exemption to its partners, to help complete the project.
If the deal is solidified, ACG would receive up to $15 million in tax-exempt affordable housing bonds toward the $21.7 million project and a full property tax exemption—both from the Housing Trust and its entities with the power to grant those incentives. ACG would also apply for 4% low-income housing tax credits to help fill the gap.
The nonprofit developer wants to build the 138-unit Cattleman Square Lofts on 1.5 acres of land across from VIA's Centro Plaza on Frio Street. The vast majority of the units will be reserved for people making between 30% and 70% area median income (AMI). ACG purchased the land, which includes a historic structure, from Alamo Colleges District in late 2019.
"We don't land bank. We don't buy land and sit and hold property and wait for either the value to increase or the right deal to come along," said Jennifer Gonzalez, ACG's executive director. "We buy with the intent of building on it or developing it or rehabbing it."
The deal would be the first time the Housing Trust partners solely with a nonprofit. To date, the vast majority of its 23 partnerships have been with for-profit developers, which have been criticized by housing advocates and observers who say the developers are capitalizing on incentives (mainly full property tax exemptions) in exchange for housing that's not affordable enough to meet San Antonio's need. Many of the projects produce an abundance of apartments for households making 80% AMI, or $56,800 for a family of four in this region—and call them affordable. The criticism was first chronicled in the San Antonio Express-News in January 2018, and followed up October 2018 and February 2020.
Proponents of the program say the downtown area needs a healthy mix of rents. Also, in recent years, the five City Council members who run the Housing Trust have slowly started to demand lower rents are built into the projects.
ACG's model is to offer rents to household making as low as 30% AMI.
"For us, we're still pushing to maintain the same affordability levels, which is why we're looking at working with the trust so we can work on getting the (tax) exemption," Gonzalez said last week.
ACG was pursuing 9% low-income housing tax credits, a highly competitive federal affordable housing program in which only a handful of projects in a region receive the credits out of a few dozen applicants. However, in the San Antonio region, the Cattleman Square apartments ranked low on the list and is unlikely to receive the credits, which are sold to investors for cash to build the development.
Clarification: This section was updated to state the Housing Trust has partnered with entities that include nonprofits in the past.
Oct. 23, 2019
ACG purchases property from Alamo Colleges District for $2.8 million.
ACG applies for Center City Housing Incentive Policy incentives for Cattleman Square Lofts after the program is revamped by the City Council the previous month. Read more.
ACG puts in a bid of $2.8 million to the Alamo Colleges District for the property at 811 W. Houston St. The University of Texas at San Antonio places a bid of $400,000. Read more.