October 23, 2014
| Updated: October 24, 2014 12:32am
SAN ANTONIO — Rumors have been swirling lately that Federal Realty Investment Trust has zeroed in on a buyer for its East Houston Street portfolio — a handful of mostly historic buildings along Houston Street that includes the beloved Kress and Vogue buildings.
I placed a few calls, and all appears quiet on the on-the-record front.
My hope is that it’s a local, and not an out-of-towner, that winds up buying the properties.
This month, Federal Realty of Rockville, Maryland, announced that it was putting its downtown properties along the pedestrian-friendly stretch of Houston Street up for sale as one package.
“We’ve done everything that we can to add value to (the San Antonio properties), and now it’s time to pass it on to the next group,” Jan Sweetnam, Federal Realty’s Western Region Chief Operating Officer, said earlier this month. “We are very happy with our investment and what we’ve had for the last 16 years.”
It was an exciting time for downtown San Antonio in the late 1990s. Federal Realty’s purchase of the Houston Street properties helped launch the Houston Street Tax Increment Reinvestment Zone, which ended up funding the revamping of the Presa Street Bridge near College Street and the courtyard between the Frost Bros. building and Bohanan’s steakhouse. Other projects included the construction of Hotel Valencia, the St. Mary’s Street parking garage, and the refurbishing of historic buildings.
Sweetnam said it’s time for Federal Realty concentrate on its holdings on the East and West coasts and therefore must leave San Antonio.
Was Federal Realty’s time here well-spent? Did it move Houston Street — once San Antonio’s retail hub — back toward greatness?
What transpired is mostly a good thing. The emptiness along Houston Street is emblematic of downtown San Antonio as a whole and demonstrates the lack of critical mass when it comes to downtown dwellers — not poor execution of retail, office and hotel developments along the corridor. If it weren’t for Federal Realty, many of those historic buildings may still be sitting empty or underutilized.
By Federal Realty’s own admission, the portfolio has yet to reach its full potential.
And that’s the main reason why the new owner should be local.
First, a local owner would give San Antonians a sense of pride that a major street is mostly owned locally and not by some Northeasterners — no offense to Federal Realty.
It also would give locals a sense of clarity. It’s hard for one to remember who owns what when the owner is from an unfamiliar, far-off place. When the owner is local, it tends to stick better. In recent years, figuring out who owned Houston Street was particularly complicated because another Maryland group — Baywood Hotels — owns three properties on the corridor.
To a degree, a local owner would offer some accountability.
Not that the next owner of the Houston Street portfolio would listen to what us groundlings had to say.
But at the least the lines of communication would be more direct. Because, of course, we have some suggestions.
For example, the Kress building’s upper floors are just screaming to become apartments. The street needs bodies there 24/7. And apartments at the Kress would add to the ones at the Majestic Theatre, Brady Tower, Maverick building and the Vistana farther west. And east of the Kress, build anew on the empty lot — more housing, office space, a mixture. That would serve as a major shot in the arm for Houston Street.
The timing of the sale is also incredibly convenient.
A few weeks ago, the City Council approved the expansion and renewal of the Houston Street TIRZ. With that renewal comes new opportunity for more capital projects in the area. A local owner — on the ground, so to speak — would expedite that process.
Keep it local and finish what Federal Realty started.