This portion of the Friedrich complex is not included in the lofts project. Photo by Ben Olivo | Heron

The San Antonio Housing Trust Public Facility Corp. (PFC) recently purchased the bulk of the former Friedrich Air Conditioning Co. complex on East Commerce Street, a major step in the redevelopment of the long-derelict industrial site.

Construction of the $68.7 million Friedrich Lofts is expected to begin in the spring of 2021 and take 22-24 months to complete, said Pete Alanis, the Housing Trust's executive director. The trust is governed by a board composed of five City Council members.

The new complex will be composed of 347 apartments, half of which will be priced at market-rate and the other half for households earning 80% of the area median income (AMI) or less. Of those below-market-rate units, 14 will be reserved for people making 60% AMI or less.

[ Scroll down for a chart showing various AMI levels. ]

The Housing Trust PFC will lease the property to a development partnership that includes the trust, and also developer Provident Realty Advisors of Dallas and capital provider American South Real Estate Fund of Atlanta.

Provident is building the new lofts, while American South is providing $10.9 million in equity. The Housing Trust's involvement means the development will benefit from a full property tax exemption under state law.

Friedrich Lofts site map 1617 E. Commerce St. San Antonio Texas
GOOGLE | HERON

The Housing Trust purchased the 4.04 acres from a group headed by developer John Miller of Dallas for $6.31 million on Aug. 7, Alanis said. The purchase was first reported by the San Antonio Business Journal.

Before construction begins, Provident will have to work with the Texas Commission on Environmental Quality on environmental remediation of the site, and with the Texas Historical Commission on the demolition of the old manufacturing plant.

Miller will continue to own the small cluster of buildings on the northeast corner of North Olive and East Commerce, on which the iconic "Friedrich Refrigerators" sign sits, for potential future development.

The project has received mostly praise from the near East Side communities of Dignowity Hill and Denver Heights, San Antonio Express-News Skyline columnist Madison Iszler wrote recently. It's also received some criticism for its pricey rents, especially for those reserved for people making below the area median income.

Friedrich Lofts rents

Studio 1BR 2BR
60% AMI $767 $822 $987
80% AMI $1,100 $1,375-$1,420 $1,420
Market-rate $1,100 1,400-$1,600 $1,800
Source: San Antonio Housing Trust; anticipated rents two years from now.

In a previous interview, Alanis explained the rents at 60% and 80% AMI, or less, exceed the rent limits for below market-rate rents, established by the U.S. Department of Housing and Urban Development for the San Antonio region, in order to make the project work financially.

“It’s the deal that is going to finally allow this project to proceed, and we’re finally going to have the Friedrich done,” Alanis told the Heron in June. “Otherwise, it just wouldn’t have happened.”

[ For more on how rent limits work, read "Why some subsidized housing is beyond reach for many San Antonians." ]

COURTESY RENDERING

Friedrich Lofts

» Address: 1617 E. Commerce St.
» Development partnership: Provident Realty Advisors (16.5% ownership; Dallas), San Antonio Housing Trust Public Facility Corp. (16.5% ownership; City of San Antonio nonprofit), American South Real Estate Fund (67% ownership; Atlanta)
» Property Owner: San Antonio Housing Trust; purchased from group headed by John Miller (Dallas) on Aug. 7, 2020, for $6.31 million
» Occupancy: N/A
» Rent or Buy: Rent
» Height: Four
» Land size: 4.04 acres
» Total units: 347
     » Market rate: 173
     » 80% AMI: 160
     » 60% AMI: 14
     » 30% AMI: N/A
     » Student Units: N/A
» Section 8: Yes, will accept voucher
» Retail (s.f.): N/A
» Office (s.f.): N/A
» Parking: 771-space parking garage
» Construction start date: Second quarter 2021
» End date: Early 2023
» Architect: Architecture Demarest (Dallas)
» Cost: $68.7 million
» Investors & Financing: $10.9 million via American South Real Estate Fund; $54.8 million HUD 221(d)(4) loan via Greystone (New York)
» San Antonio Incentives: $2.29 million
     » SAWS Fee Waivers: $500,000
     » City Fee Waivers: $97,670
     » City Loans: N/A
     » Est. City Property Tax Rebate: N/A
     » Other: $1.7 million Inner City TIRZ reimbursement
» Bexar County Incentives: N/A
» Texas incentives: Full property tax exemption via San Antonio Housing Trust Public Facility Corp. duration of 75-year lease beginning 2021. $61,622.39 owed in 2020. Expected 75-year lease.
» Federal incentives: N/A
» Other: N/A
» TOTAL PUBLIC SUBSIDY: $2.29 million (does not include tax exemption)
» Return on investment: 7% (anticipated)

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Friedrich Lofts timeline

June 15

The San Antonio Housing Trust Public Facility Corp.(PFC) board agrees to purchase of the property sooner than planned. Though the deal isn't final, the purchase now gives the Friedrich, which has sat derelict for decades after numerous attempts to rehab it, the best chance for success, local officials said.

The Housing Trust PFC board, chaired by District 3 Councilwoman Rebecca Viagran, approved the formation of a company to purchase the property now so that the environmental work and, ultimately, the demolition of the buildings can be completed before taking the project to HUD in March 2021 for final closing.

"We recognize (the HUD closing) is not going to happen until March," Jim Plummer, an attorney with Bracewell LLP who puts together local PFC deals, told the board. "However, HUD ... has to see TCEQ has approved the environmental and the state of Texas (historical commission) has approved the demolition plan."

The 347-unit Friedrich Lofts project at 1617 E. Commerce St. is being lead by Dallas developer Provident Realty Advisors in partnership with the Housing Trust PFC and Atlanta-based investor American South Real Estate Fund.

The Friedrich is located within the Dignowity Hill neighborhood, just north of the Denver Heights neighborhood—two of the fastest gentrifying communities in inner San Antonio.

The San Antonio Housing Trust PFC brings to the partnership a full property tax exemption afforded to governmental nonprofits (or PFCs) under state law in exchange for half the units priced for people making below the area median income, or AMI. This year the Bexar Appraisal District appraised the five-acre property at $2.1 million, and concludes $61,622.39 is owed in property taxes to local jurisdictions.

The American South Real Estate Fund, meanwhile, is contributing $10.9 million in cash.

Provident has applied for a $54.8 million U.S. Department of Housing and Urban Development (HUD) 221(d)(4) loan via Greystone of New York, but additional environmental assessments, such as ground water and soil testing, is being required by the Texas Commission on Environmental Quality (TCEQ). The Texas Historical Commission also has to approve the demolition of the buildings.

American South Real Estate Fund has agree to pay for the upfront costs of the environmental and demolition work, but the group only works with nonprofits, or public nonprofit, entities, thus the need for the San Antonio Housing Trust PFC to move on ownership now, Alanis said.

According to Alanis and Plummer, the board needed to approve the purchase of the property because the current sales contract, between Provident Realty Advisors and Dallas developer John Miller, who's owned the Friedrich for many years, is due to expire June 30. Miller plans to retain ownership of the buildings facing East Commerce Street. It's unclear what his plans are for those buildings.

Provident Realty Advisors will pay the San Antonio Housing Trust PFC a $350,000 fee at the imminent closing, and another $250,000 at the HUD closing in March, Alanis said.

During the meeting, District 9 Councilman John Courage said he supported the project, but called its financing convoluted. Council members Roberto Treviño (District 1), Adriana Rocha Garcia (District 4), and Shirley Gonzales (District 5) also serve on the S.A. Housing Trust PFC board.

"The city has tried five attempts to find a way to get the Friedrich rehabilitated," Plummer told the board. "It has been unsuccessful to date. So, yes, you have seen this project many times. I think we finally have a structure that's going to work. Yes, it's a convoluted structure ... because we are working to make sure you have no risk in an environmental remediation."

For its part, the American South Real Estate Fund will hold 67% ownership, while Provident Realty Advisors and the San Antonio Housing Trust PFC will have 16.5% ownership each when the apartments are built. Alanis acknowledged the large ownership stake by American South Real Estate Fund, but said the investment group was the only one Provident Realty Advisors could find for the Friedrich. Part of the delay has been finding an investor willing to commit to the Friedrich, Alanis said.

The project is also receiving $2.29 million in city incentives.

During the meeting, virtually all council members expressed concern that District 2 Councilwoman Jada Andrews-Sullivan, who's district encompasses the Friedrich complex, wasn't present at the meeting. The San Antonio Housing Trust PFC board is composed in a way that excludes the District 2 council member. Alanis told the board Andrews-Sullivan supports the Friedrich Lofts project.

Under a PFC development structure, the PFC owns the property to receive the property tax exemption and leases it to a partnership that includes the PFC. For more, scroll to the bottom of this post.

Setting It Straight: This section was updated to reflect the Friedrich complex being located inside Dignowity Hill.

Jan. 22, 2020

San Antonio Housing Trust PFC revises memorandum of understanding MOU with Provident Realty Advisors. Read the agenda item from that meeting.

Aug. 14, 2018

The Inner City Tax Increment Reinvestment Zone board voted to approve a $1.7 million reimbursement to the Friedrich Lofts project. For more info, read "Friedrich receives $1.7M incentive for mixed-income apartments"

...

5 steps to understanding public facility corporations, or PFCs

SAN ANTONIO HERON

...

2020 Area Median Income

Here are the latest area median income (AMI) levels for the greater San Antonio area (Bandera, Bexar, Comal, Guadalupe and Wilson counties), according to the U.S. Department of Housing and Urban Development. Want to know more about how AMI works? Click here.
[table id=14 /]

2020 Rent Limits

Here are the rent limits for most affordable apartments in housing properties in the San Antonio-New Braunfels region that received financing or subsidies from the U.S. Department of Housing and Urban Development. Want to more about how rent limits work? Click here.
[table id=15 /]

Heron Editor Ben Olivo can be reached at 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

Local writer Cary Clack returns to the near East Side neighborhood where he grew up, and finds a community in transition.

In this 1960s photo, Clack poses with his grandmother in front of their home in Denver Heights. Courtesy photo

In January of 1944, my grandfather—a man I'd never meet—wrote a letter to my grandmother, a woman I spent more time with than any other person in my life.

"All day yesterday," my grandfather wrote. "My left eye was jumping. That is why I called you last night to ask about the children…. Papa may close a deal today for a place. If he does, I think the place is nice. We have a space for you and the children now at home but am waiting until a deal is closed so when you come (you) will have a place for our things."

There were four children, the youngest being my mother. The children and my grandmother—who I called Momo—were still in Houston where my mother was born.

My grandfather had moved to San Antonio to receive treatment for tuberculosis. He was living with his father, my great-grandfather, whose nickname was "Cap" ("Captain") because he owned the San Antonio Black Missions, a semiprofessional baseball team in the South Texas Negro League.

The place that Cap closed the deal on was a house on a corner in the East Side neighborhood of Denver Heights, which was separated from downtown by the Southern Pacific railroad tracks. He would also buy the house next to it.

Cap, who lived a few blocks away on 303 Cactus St., was a businessman specializing in real estate and gambling. He was a skilled pool and poker player. A room in his house was set up for multiple card games and a service window through which my great-grandmother dispensed fried chicken, Toll House cookies and her other creations.

In a second letter, dated March of 1944, the family is soon to be reunited.

"The time is not long," my grandfather writes to Momo, "before we will all be together again and I will be very happy."

But that happiness and the reunion with his wife and children was brief.

In that new house, he died of tuberculosis on Nov. 5, 1944. By then, Momo was pregnant with their fifth child.

Clara Ann would be born in February of 1945, but died 18 months later in the same bedroom as had the father she'd never met. Generations of children in our family have been photographed in the front yard of that house, none more than me. But Clara Ann was the first.

For decades, until recently, the password used as a security code for the homes of relatives was "Clara Ann."

Clara Ann is shown here in 1946, the year she died. Courtesy photo

Singer Ernestine Allen performs at Don Albert's Keyhole club at 728 Iowa St. in 1946. Courtesy UTSA Libraries Special Collections

A few blocks away from the two houses Cap bought was a cluster of famed East Side businesses known as “The Corner,” an intersection of culture and commerce at Pine and Iowa streets. Anchoring "The Corner" were W. H. Leonard's Drug Store, a movie theater, a gas station and The Keyhole, one of the first integrated nightclubs in the South.

The Keyhole was owned by the bandleader Don Albert who, with his wife and children, lived across the street from the two houses Cap bought. Visitors to the Alberts included legendary black entertainers like Nat King Cole, whose lap my mother sat on when she was a little girl.

I was born in 1960 and the house on the corner is where I was raised in a neighborhood where whistles were a constant signal of transitions and passages.

Five blocks west, where the Alamodome now sits, was Alamo Iron Works. Four times a day, except for weekends and holidays, AIW's whistle was a neighborhood alarm clock, going off at 8 a.m. (starting time); noon (lunch time); 1 p.m. (end of lunch time); and 5 p.m. (quitting time.)

Alamo Iron Works workers are show in this undated photo. UTSA Libraries Special Collections

Three blocks north, workers disappeared into Friedrich Refrigeration when its whistle blew at 8 a.m. and re-emerged when the one at 5 p.m. went off.

Day and night, the Southern Pacific trains screamed their noisy arrivals and departures. At nighttime, the sound of a distant whistle followed by the muffled rumble of box cars along the Sunset Station tracks made a child long for places he'd yet to know while already missing the places he knew so well.

Back in that day, there were places like the icehouse on the corner of East Commerce and South Pine, across the street from the Friedrich building. It was a lively gathering place for people in the neighborhood to buy snacks, tamales, sausage, soda, beer; play dominos and enjoy the jukebox's soulful selection.

As late as 1986, it was mentioned in a New York Times story calling San Antonio the ”Icehouse Capital of the World.”

On the other side of the pawn shop next to it was the most popular mom-and-pop grocery store, Mon Fung Market, which everyone called "The Chinaman's." They sold moon cookies, toys and had uneven wooden floors, tilting downward towards the meat market which made it fun to walk fast.

The best sausage in the neighborhood was sold at Johnny Johnson's yellow building at Montana and Olive. Other small stores were Joe's at the corner of Pine and Montana and Piedmont Grocery at Wyoming and Piedmont.

At the corner of Pine and Dakota was Hicks Beauty School, owned by Jessie Mae Hicks, where mothers in the neighborhood would get their hair done at night while we played outside and drank tall bottles of Nehi soda from the machine standing atop a steep driveway.

These places weren't only businesses offering services to customers, they were community gathering places, extensions of our front porches where people dropped by to visit, talk and reconnect.

The Alamodome and Tower of the Americas can be seen from Denver Heights. Photo by V. Finster | Heron contributor

As time rolled through decades, the train whistles sounded like a dirge for a dying neighborhood, especially during the 1980s and 1990s when heightened gang activity earned San Antonio the moniker of "Drive-by Capital of Texas."

Friedrich Refrigeration closed, leaving a vacant, brooding building upon which were projected serial fantasies of resurrecting it into a catalyst for economic development for Denver Heights and the East Side.

Alamo Iron Works moved. The Alamodome, which replaced it, has been a success but never became the engine of economic development for the East Side as promised. To have been raised on the East Side, familiar with its history, and long immune from the disappointment of broken, if well-intentioned promises, is to also tire of constantly hearing it referred to as the "long-neglected East Side."

The ice house was torn down. The little grocery stores closed. Hicks' Beauty School burned down the same night O.J. Simpson took the nation on a slow-speed freeway chase.

My mother still lives in the house she moved into in 1944. The second house, next door, bought by my great-grandfather Cap, was always used as a rental.

When I was 3 years old, a newborn baby girl was found alive, one morning, in a neighbor's garbage can. The baby was nicknamed "Elizabeth Taylor" because of her black hair. It was soon learned that her mother was the teenager who lived with her family in the rental house.

When I was 4 years old, a husband and wife had moved into the rental. One day, a gunshot came from the house. My father, a Bexar County Sheriff's deputy, ran next door and took the gun from the man who'd just murdered his wife.

We sold the rental in 2014.

By then, I'd long been living in the house I had built on the far South Side. I loved the house and the area but it was far from the rest of my life. I sold it in 2016 and moved into an apartment on the East Side off Interstate 35.

It was alright but I missed living in a house and after a year was looking to rent one. I never really got around to looking for one and was about to re-up on my lease.

The man who'd bought our family rental had done some refurbishing on it. My brother asked him if he was looking for a renter.

He was and in December 2017, I became that renter.

The Friedrich complex sits on the 1600 block of East Commerce Street. Heron file photo

It's a small house with work still to be done and not one I'd buy. But it serves my purposes for now. I call it my "writing cottage" and it's intriguing to be back on the corner in the neighborhood where I was raised.

The Friedrich Building still looms over it with dark, empty eyes, and Southern Pacific trains still whistle their way through Sunset Station depot several times an hour.

My next-door neighbor, my mother, who was 3-years-old when she moved into her house is now the neighborhood matriarch although most of the neighbors wouldn't know because they are new to the neighborhood.

I call my daily walks "memory walks" as I pass houses and remember families who used to live in them, the children I played with, the conflicts and celebrations which spilled out of those households.

I remember the interiors of the homes, the meals served, and the yards in which we played.

Those families no longer own those houses. Old folks died and the young ones moved away, never to return—except me.

In Denver Heights, I can walk for blocks in any direction and count on one hand the number of houses owned by the same families who owned them when I was growing up. The near absence of generational continuity in home ownership in the neighborhood is startling.

I walk through a neighborhood of ghosts, feeling like a ghost myself, haunting streets upon which I've tread a million steps. I nod to unfamiliar faces in front of familiar houses and realize it's only the streets who know me, so familiar are they with my footsteps.

When I was growing up, the neighborhood was predominantly black but with a good percentage of Latinos. It wasn't unusual to stand outside and hear R&B and Tejano music being played.

A mix of middle-class and poor, of nice houses and those run down, it wasn't anything close to being a slum or ghetto. But it says something about the mentality of my friends and me that as children, we'd feel sorry for the rare white folks who moved into our neighborhood.

We believed that no white person, if they could afford to live elsewhere, would choose to live near us, the black and the brown. That had to mean a huge fall from the paradise we imagined all white people lived in. They never stayed long before moving on.

Today, the largest demographic in the neighborhood, like the East Side itself, is Latino and there are more whites. In my first months back, I could identify the white people I saw as one of two kinds: heroin addicts and new homeowners.

Fortunately, the heroin addicts have disappeared. The new homeowners are planting roots.

Nearly-complete townhomes stand on Olive Street in Denver Heights. Photo by Ben Olivo | Heron

It used to be, that whites lived in Denver Heights because they had to. Now they live here because they choose to, like they choose to live in Dignowity Hill and other East Side communities.

Never in my lifetime has Denver Heights—just minutes from downtown—attracted so much investment. Houses which have been refurbished are on the market for $300,000-$400,000. Even small, nondescript houses needing work are in the $100,000-$200,000 range.

My mother's house, the family house which was paid for decades ago, is a house no member of my family could afford to buy.

Expensive but unattractive condos and townhouses whose designs are out of sync with the neighborhood's older houses are popping up, as are bed-and-breakfasts.

Even the Friedrich Building is to be awakened and turned into a 174-unit apartment project, which could stimulate business development along the Commerce Street corridor, east of the railroad tracks.

New retail shops and businesses are soon to open or break ground and restaurants like Mark's Outing and Tony G's Soul Food and hangouts like the Dakota East Side Ice House and The Cherrity Bar are becoming community gathering places not only for the neighborhood but for people throughout the city.

For months, I've walked these streets with an embarrassing resentment that my new neighbors don't have the memories I do and are unfamiliar with the stories I know. Embarrassing because of my self-absorption and knowing that one generation can't be held hostage to another generation's memories, or be held accountable for things of which they've been given no account.

No one is the sole custodian of a neighborhood's memories, especially a neighborhood as old as mine. Each generation produces its own custodians.

Neighborhood history is preserved in stories told and retold until they have become legend and myth.

But when the storytellers pass or move away, when the front porch is less crowded, and when the stories stop being told and the memories no longer shared, who remembers its history?

The places of my youth are being supplanted by new places. My old and fading memories compete with new experiences of people and, one day, these new experiences will become old memories which they'll stalk while haunting these streets like ghosts.

The word "corner" appears several times in this essay, what with corners being where so many of the places I've written about stood or still stand.

Street corners are intersections, a confluence of traffic where directions can be changed. The neighborhood of my childhood and—for now—my middle-age years is turning a corner.

So are my initial concerns about this turn, even within the course of this writing.

Old photos of The Keyhole decorate The Dakota East Side Ice House, 433 S. Hackberry St. Photo by Ben Olivo | Heron

On a recent Friday afternoon, days after I'd written the passages about who are the custodians of a neighborhood's memories and history, I went, for the first time, to The Dakota East Side Ice House on—here comes another one—the corner of Dakota and South Hackberry. I ordered Brisket Biscuits which, I assure you, will make me a regular customer.

Waiting for my order, I began looking at the black-and-white photographs covering one wall. Within seconds I was smiling, almost laughing while shaking my head.

They were a homage to history, pictures from the 1940s and 1950s of Alamo Iron Works, the Friedrich building, Sunset Station, "The Corner,” and several of Don Albert and his Keyhole club. My favorite was of Albert and Duke Ellington standing near the bar. Sitting at the crowded bar, looking back at them with a huge grin, is the unforgettable Nat King Cole. I took a picture to show to my mother.

This ice house, little more than a year old and thriving, is already a custodian of its neighborhood's history.

This Denver Heights neighborhood is in transition. Yes, the sound of gunshots is frequent enough to not make you jump while streets are in such disrepair that your car will jump. But it is a neighborhood slowly becoming more prosperous and inviting to new families wishing to plant roots. People who, as my grandfather wrote 75 years ago about a house on a corner, "think the place is nice.”

I hope that families who've known this for decades, because they helped make it a nice place remain part of it. Families like mine.

Heron file photo

Cary Clack is a local writer and member of the San Antonio Heron board of directors.

Jeannine Qualls (from left), daughter Maria Calderon and granddaughter Alexandra Calderon, 2, live in Denver Heights. Photo by V. Finster | Heron

By Ben Olivo & Gaige Davila, San Antonio Heron

While working two jobs, one of which pays $18,000 as a special ed assistant in SAISD, Jeannine Qualls thought she was making longer-term investments for her family as the owner of three properties in Denver Heights.

She's building a two-story house on one of the properties on Paul Street, a hidden part of this East Side neighborhood you'd have to take a few wrong turns to find.

"I'm building this house and thinking, 'Hmm ... maybe I can't live in it'," said Qualls, who lives with her husband, Alejandro Chaires, in the home next door. "Maybe I'll have to sell this house and let whatever rich person (who) moves into it pay the taxes, because only rich people can live in this area."

Rising East Side

Here are the median property values for the three East Side neighborhoods that abut downtown.

Government Hill

75.8 percent appreciation last five years
» 2019 — $116,370
» 2018 — $104,100
» 2017 — $91,390
» 2016 — $72,160
» 2015 — $66,180

Dignowity Hill

189.5 percent appreciation last five years
» 2019—$170,890
» 2018—$138,850
» 2017—$109,030
» 2016—$87,160
» 2015—$59,010

Denver Heights

163.9 percent appreciation last five years
» 2019—$99,190
» 2018—$87,190
» 2017—$87,390
» 2016—$43,330
» 2015—$37,580

When we talked to Qualls two weeks ago, she had not received the 2019 valuation notice from the Bexar Appraisal District for the house she's building. She had received the valuation for a one-story home she owns a block over on Nevada Street, where the taxes spiked to $4,000 this year—up from about $1,500 when she bought it four years ago.

"I love the fact that (the neighborhood is) looking prettier and nicer ... I don't feel like I live in the ghetto anymore," Qualls said. "But the high price that goes with it is going to chase us out."

Qualls and her family feel the effects of soaring property values in the sections of the historic East Side that abut downtown—Government Hill, Dignowity Hill and Denver Heights. Of the regions that touch downtown, the East Side is considered ground zero for gentrification in San Antonio.

Who or what is to blame for the renewed interest in these neighborhoods depends on who you ask.

Some would say it's fueled by San Antonio's downtown housing incentives policy, which has produced roughly 6,800 units since 2012—predominately market-rate apartments built or under development on the edges of downtown. They tend to be located in or up against these aging communities whose demographics in some cases have become a mix of low-income, middle-class and affluent residents, the ratios of which vary depending on the neighborhood.

Others would point to their historic housing stock, much of which had fallen into decay but became attractive to many newcomers who could afford to restore the older homes.

For some, like Qualls, the appeal comes from the proximity to downtown.

"I can sell all this and go buy me a real nice house somewhere out in the country," Qualls said. "But I bike ride, and I like to walk the river."

In Denver Heights, the median property value this year is $99,190, lower than the middle figure of $170,890 for Dignowity Hill, and $116,370 for Government Hill, the neighborhood just east of the exploding Pearl area above downtown, north of the highways.

Though Denver Heights has the lowest median value, home prices have spiked 163 percent in the last five years, behind Dignowity Hill, which soared 189 percent during the same timeframe, according to an analysis of data the Heron requested from the appraisal district.

Ten years ago, the median value of all three neighborhoods was between $40,000 and $49,000.

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Diana G. Orosco, who has lived in Government Hill since 1958, opens her appraisal notice recently. Photo by V. Finster | Heron

'I think it's fixed'

Currently, the City of San Antonio is working toward designating Government Hill and Denver Heights as neighborhood empowerment zones (NEZs), in which qualified homeowners could have their city property taxes frozen for 10 years.

The move is one of several measures the city is pursuing to try to combat the many forms of displacement critics say are happening in these changing areas because of the multifamily housing incentive policy, also known as the Center City Housing Incentive Policy (CCHIP), among other causes.

Since December, COPS Metro Alliance has pressured Mayor Ron Nirenberg and the City Council to adjust policies such as CCHIP so they produce more affordable housing, while at the same time passing more strategies for keeping long-time residents in their homes amid the rapid change.

In March, on a Wednesday, the day before the City Council was set to approve one such policy, 200 members of COPS Metro packed council chambers during a citizens to be heard session to continue the pressure on Nirenberg and the council. Their message that night: We want relief now.

Diana G. Orosco, who's lived in Government Hill since 1958, and in her current house on North Palmetto Avenue for 30 years, was among the throng.

Though the city is moving toward declaring her neighborhood an NEZ by year's end, and though it's speeding up other anti-displacement strategies, Orosco still thinks new development will inevitably consume Government Hill. She also blames the Pearl's growth.

"I think it's fixed,” said Orosco, who's home has appreciated 123 percent the last five years. "It's been set for years: the planning of this neighborhood."

Homeowner George Villarreal talks about the impact of higher property taxes in the Government Hill neighborhood. Photo by V. Finster | Heron

Property owner George Villarreal sees the changes happening in Government Hill from a different perspective: that of a landlord.

Villarreal owns a house on Mason Street that's been divided into three apartments. Higher property taxes means he has to raise rents in order to afford them, which is often a difficult conversation, he said.

"This area was so used to paying very low rent," Villarreal said. "It's hard to let the tenants know, ‘Hey, the taxes are going crazy here, and in order to cover my costs, I have to raise the rents,' but they’re still getting paid the same."

Tenants have moved out of Villarreal’s property because they couldn’t keep up with the rising rent. Villarreal has had to evict some tenants for the same reason.

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Rising property taxes don't affect Denver Heights resident Maria Salazar, whose disability exemption keeps her tax obligation to $200 each year. Photo by V. Finster | Heron

Not all are worried

In Denver Heights, we walk up Dakota Street, from South Hackberry, and find many vacant homes and many renters who don't want to talk to us about property values.

Seven blocks up, Dakota dead ends at St. John's Lutheran Cemetery, so we head back to Hackberry, but on Paul Street, where more people seem to own their homes.

Throughout the East Side, but especially in Denver Heights, investors offering cash for homes well below their market value are rampant, residents say.

Maria Salazar, 60, has lived in her pink house on Paul for 35 years. In recent years, she paid it off, and now pays a paltry sum on taxes every year because she got a disability tax exemption. The hike in her property's value doesn't bother her, but the investors do.

"They're trying to buy them for $20,000, $30,000, $40,000, and they're selling them at $200,000, $300,000," said Salazar, who lives in the home with her granddaughter. "If you want my house, I want $100,000 ... (They say) 'Let me talk to you.' No, no, no. I don't want to talk to you. You have $100,000 in your hand, I'm going to give you the house."

Pastor Dustin Lindberg and his wife Tara relocated to Denver Heights from the northeast side in August. Photo by V. Finster | Heron

Farther down Paul, Dustin and Tara Lindberg moved into a flipped 1940s house in August from the northeast side.

Dustin, who serves as the pastor of Oiled Lamp Church in Lytle, welcomes the appreciating values as a new homeowner. He and his wife bought their home for just under $200,000, and it was recently appraised at about $210,000.

"To me it's a good thing, and honestly, I think the neighborhood needs it," Dustin Lindberg said of the changes. "I think it's a good thing for people who don't have the ability to invest money in their homes. I know it might cause some to move out, but I think they can get more for their investment than letting their house fall on them and being stuck with nothing."

Lindberg mentioned two nearby shootings that had happened a few days before our interview.

"People coming in and trying to take care of their property and their families, it's a positive in my eyes," he said.

Genaro Perales, who also lives on Paul with his wife and two teenagers, had not received his notice yet when we talked to him, but says he's felt the increased property taxes, which are bundled into his mortgage payment. Last year, the payment went up by close to $100.

"You feel it, don't get me wrong," said Perales, who works as an air conditioner tech.

Perales says they'll stay there another two years, while his wife finishes getting her criminal justice bachelor's degree. Then they'll decide what to do.

Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

Denver Heights is one of three downtown communities the city wants to designate as a neighborhood empowerment zone. Photo by V. Finster | Heron

By year's end, the City of San Antonio wants to designate a segment of the near West Side, and the near-East Side communities of Denver Heights and Government Hill, as neighborhood empowerment zones (NEZ), a Texas statute that allows home owners to have their city property taxes frozen for no more than 10 years.

The city's Neighborhood & Housing Services Department (NHSD) wants to take at least one of the aforementioned communities to the City Council for approval in August, after the council's summer break. NHSD Director Veronica Soto said she expects all three neighborhoods to receive the NEZ label this year.

The timeline is one that has been partially influenced by COPS Metro Alliance.

Earlier this week, COPS Metro and NHSD officials met to iron out concerns the community organizing group had about the city's timeline for anti-gentrification policies.

Since December, when the City Council revised its downtown housing incentive policy, which many observers consider the catalyst for the area's rapid growth in market-rate apartments since 2012, COPS Metro has demanded the city accelerate policies that are designed to keep people in their homes amid the development wave.

The group hasn't been shy about its use of the upcoming May 4 election to spur elected officials to take action on these policies sooner rather than later.

"We said all along, we’re not against development, but it has to be done right," Linda Davila, a leader with COPS Metro, said in an interview on Wednesday. "We’re protecting our neighborhoods at the same time. They don't have to be mutually exclusive."

Among the other measures NHSD is working toward:

» Hire a consultant to craft a larger displacement prevention strategy.

» Bolster NHSD staff to handle additional outreach efforts such as educating people who qualify for either a homestead or senior tax exemption.

"People are just failing to turn (the exemption forms) in," Soto said. "We're going to have a staffer who essentially does the navigator role to help people fill out those forms."

Soto said NHSD will work with groups like COPS Metro to identify qualified residents who might need help filling out the form.

In late March, the City Council approved the risk mitigation policy, which is designed to help people who are in the process of being uprooted—or near that point—with moving expenses.

The day before the vote on March 20, some 200 members of COPS Metro packed City Council chambers during the weekly citizens to be heard meeting, and demanded the city scrap its plan to study the housing situation. Instead, it wanted an action plan to commence as soon as possible, which the city is now doing.

Archbishop Gustavo García-Siller was the main speaker, then it was COPS Metro leader Martha Tijerina, who said, "We don't need a study, we need action."

Nirenberg broke from protocol and addressed the packed house, "We hear you loud and clear."

Tijerina mentioned studies already in place, including the final report by the Mayor's Housing Policy Task Force and "An Analysis of Housing Vulnerability in San Antonio" by the National Association For Latino Community Asset Builders as baselines for the immediate formation of a displacement policy.

In an interview with the Heron two weeks ago, Nirenberg said the policy the city is working toward is a "generation too late."

"It is sometimes frustrating to hear all the frustration during a time when for the first time in a generation we are making housing a priority, particularly displacement prevention," Nirenberg said. "But that frustration is a result of the fact that people who have been waiting for a generation for change are now taking a seat at a table—that they belonged at 30 years ago—and they're being heard and their voices are turning into action at the city. And, unfortunately, that action, no matter how fast it comes, is still going to be a generation too late."

"In other words, it's frustrating, but it's also gratifying at the same time."

Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

This property at Iowa Street and East César E. Chávez Boulevard is being eyed for development. GAIGE DAVILA | HERON CONTRIBUTOR

One of the developers of Essex Modern City, a $150 million mixed-use project in Denver Heights that’s been in the making since at least 2016, is planning another project a half-mile away on plots just west of East César E. Chávez Boulevard and South Cherry Street.

Google Maps / Heron

Sisters Bar currently operates on one of the parcels.

Sacramento, Calif., investment firm Harris Bay has already traversed two key city boards—the Planning Commission last Wednesday and the Zoning Commission this afternoon—to prepare the mostly-empty lots for potential development.

Last Wednesday, the Planning Commission amended the future land use of the two plots, which total 3.5 acres below the Chavez bridge south of the Alamodome, from “light industrial” to "mixed use," which would allow for a hotel, micro-brewery, beer garden and multi-family complex of 350 units or less to be built.

This afternoon, the Zoning Commission rezoned the properties from a general commercial designation to a "high intensity infill development zone," with permitted uses such as multi-family dwellings not to exceed 350 units, a bar, microbrewery, beer garden and hotel. Read the agenda item.

Jake Harris, a managing partner of Harris Bay, did not grant an interview request for this report.

According to Planning and Zoning Commission items, property owners in close proximity were notified of the changes, including the Denver Heights Neighborhood Association. At the Zoning Commission meeting today, city officials said 45 notices were mailed to nearby property owners and the neighborhood association, and that none responded to the change, including the neighborhood.

However, Aubry Lewis, president of the Denver Heights Neighborhood Association, told the Heron he had not heard of the project and didn’t receive a notice.

"They've not reached out to us," Lewis said. "And that's not good. It's always good to get the neighborhood associations involved on the front end, so if there are any concerns from the community, we can get them addressed."

Lewis predicts that the lack of outreach could lead to opposition to the project by residents of Denver Heights and Historic Gardens, the other neighborhood that borders the properties.

Essex Modern City is being planned for 51 Essex St. COURTESY VARGA ENDEAVORS

Harris Bay has partnered with San Antonio developer Varga Endeavors on Essex Modern City and a townhome project in the former Sunglo gas station lot at 1519 S. Presa St. Construction on Essex Modern City hasyet to begin, while the townhome shells of the Sunglo project have been built. Varga Endeavors does not appear to be a partner on this latest project.

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