The company, backed by San Antonio billionaire Christopher “Kit” Goldsbury, developed the Pearl, which is a raging mixed-use hit machine. So really, what does Showd have to be uncomfortable with these days?
Elmira.
Silver Ventures is preparing to begin work on a seven-story building at 1126 E. Elmira St. that will include 263 residential units, ground-floor live-work units, and some retail. This is the company’s first development across the San Antonio River from the 22-acre pearl.
“I’m really concerned about Project Elmira,” Shown said. “We auctioned it off and I’m holding my breath.”
In other words, Silver Ventures – well, technically, its subsidiary Broadway SA Investors GP LLC – is soliciting bids from contractors to build the thing, and he fears they’ll be handing in proposals with dollar amounts that would break the budget.
Even Silver Ventures is not immune to macroeconomic trends, such as the scarcity of building materials and construction workers, which drive up costs for all developers.
Silver Ventures – its principals, its investors and its lender – are not alone in this project.
The developer will receive $3.6 million in government grants for the Elmira Street project over a 10-year period. He got the package thanks to the city’s now-defunct Downtown Housing Incentive Policy, or CCHIP.
One of the conditions is that Silver Ventures must contribute $1 million to the city’s affordable housing fund.
Economic justice?
It’s the city’s idea of economic justice: if you rely on taxpayers’ money to build apartments for high-income renters, which risks increasing landlords’ property tax bills neighbors and aggravate our burgeoning affordable housing crisis, then you must give back a part of it.
The aim is to ease the burden of people at risk of being evicted from their homes through a set of subsidized housing estates that target professionals, young families and empty parents who can afford the high rents or mortgage payments.
Which is not justice.
Probably few apartments on Elmira Street from Silver Ventures will be in San Antonian’s average price range. Virtually none of the units the developer has built so far are. Still, its three existing multi-family projects — Can Plant, Southline and Cellars at Pearl — have received city grants.
Both Southline and Cellars landed CCHIP incentives totaling $3.6 million and $3.7 million, respectively. Can Plant, which predated the policy, received nearly $2.3 million.
At 698 square feet, Southline’s smallest apartment rents for $1,720 a month, according to the property’s website.
The controversial CCHIP has fed property tax rebates, utility fee waivers and infrastructure improvement grants to developers to incentivize them to build downtown housing. The program expired at the end of 2020.
It started under the then mayor, Julián Castro.
Less than a year or so after his election in 2009, Castro began talking about the “Downtown Decade”. It was a catchy shorthand for an idea that cities had been obsessed with from the start — that they should do everything possible to draw people into the downtown core and pile them into apartments and condos. The blessings that were to follow this increase in residential density included trendy bars, cafes and restaurants, stylish high-end boutiques, as well as corporate headquarters and large branch offices.
Or maybe they were meant to precede the influx of new residents. It was never clear to me who should come first.
Either way, CCHIP was the pot of tax dollars set up to attract developers. And it worked spectacularly…as long as your standard is the number of new apartments and condos, not if they squeezed residents from nearby neighborhoods.
In 2011, the year before the program started, the city had 3,304 housing units in and around the city center. At the end of December, there were 12,114 units, according to the city’s Department of Neighborhood and Housing Services.
A multiplication by almost four.
Is it sufficient? Shown don’t think so.
“The projects we have are 100% leased,” he said. “It tells me that we don’t have enough supply. … We are still so far behind other cities when it comes to urban residential. Look at Nashville.
The Elmira project was one of the last to receive funding from CCHIP.
‘pencil’
Whether you agree with him or not, Shown is remarkably outspoken about downtown multi-family developments. According to him, most still need some form of public assistance.
“The non-residential projects that we do at the Pearl, they all make financial sense – they’re all in pencil,” he said. “Residential projects, on the other hand, are very difficult to build.
“We’re going to look at construction costs and (projected) revenues and say, ‘This isn’t working. We need help,” he said.
Silver Ventures incorporated public financing into the first modeling of its four residential projects. Without it, Shown said, the investors, the bank or both would have moved on. Profit margins for apartment projects in downtown San Antonio, he added, are slim even if you add incentives to the mix.
As in, about 5 percent. “With the incentives, the Elmira project is looming right there,” Shown said.
So if the downtown multifamily housing market is still filled with uncertainty, why not just hang on to the property you own and wait for better terms? Instead of relying on public money?
“It’s definitely an option, of course,” he said. “But we are getting into political questions. Do I want to sit on empty land or build 260 new residential units? The city, along with CCHIP, said, “We don’t want to wait.”
Illustrated advocated for the creation of CCHIP and believes his passing is not good for the development of the region’s housing market.
I asked if Silver Ventures is shelving any potential apartment projects in this post-CCHIP era.
He replied, “We have our hands full at the moment with several restaurants and other projects for Pearl as well as the Elmira project, so we are not actively working on anything else at the moment. We will look in a few months, assess the market and decide what to do next.
another jar of money
But public subsidies to downtown residential developers aren’t going away. Tax increase reinvestment areas still exist, and they still write checks to developers to reimburse them for public improvements on their sites, such as new sidewalks, drainage, and street lighting.
In fact, the Midtown TIRZ agreed in May to reimburse Silver Ventures $500,000 in San Antonio water system impact fees for the Elmira Street project.
And on Thursday, the city council approved up to $7 million in refunds that the same TIRZ board had approved for Dallas-based Encore Multi-Family LLC, which plans to build the 386-unit complex at 1203 Austin St. to Government Hill – at market rates. As in, these apartments will not be affordable for most San Anton residents.
Several members of council have been vocally concerned about the potential displacement of residents as a result of Encore’s project and others like it.
Then they all voted in favor of the reimbursements, except for the two members who were not present.
By now, it almost goes without saying that the Pearl has been the driving force behind the redevelopment of the Broadway corridor. It looms behind rows of apartment buildings, shiny, newly completed office buildings and new restaurants, bars and cafes. Revenue from sales and property taxes—at least property taxes that aren’t reduced—have been a boon to the city.
And it’s attracted thousands upon thousands of new residents, many of whom — at least by San Antonio standards — are well-earning and well-educated. Also, many of them appear to be white. And they grow steadily in neighborhoods close to Broadway, such as Tobin Hill and Government Hill.
None of this is lost on Shown.
When I stated the obvious, he had two responses.
First, he noted that Pearl’s Farmers Market draws diverse crowds on Saturdays, and plazas and other public spaces on the property are open to everyone.
Then he said I had to look back about 20 years. When Goldsbury bought the ruined and closed Pearl Brewery complex in 2002, its backyard was a nest of drug dealers and prostitutes, and the property was flooded during heavy rains.
“It was a terrible place,” Shown said. Who would have thought that the region was better then than now?
Still, he acknowledged that “most of the employees working at the Pearl can’t afford to live here, and that bothers me.”
Montré said he was working on a plan to open more affordable housing in the area. No details, however; it’s too embryonic, he says.
It is unclear whether the proposal he is considering to address the region’s affordable housing shortage – exacerbated by the wave of growth the Pearl has helped spark – would rely on public money.
But it is very likely.
greg.jefferson@express-news.net