New Hemisfair Hotel design shows off 200-room property and retail space

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Zachry Hospitality has won initial approval from a city panel for a hotel design that will be part of a long-awaited mixed-use development in Hemisfair.

The curved 17-story hotel designed by local firm Overland Partners Architects will overlook Civic Park, a nine-acre public park being built on the downtown site of the 1968 World’s Fair.

It will include 200 hotel rooms and commercial space on the ground floor, according to plans submitted to the History and Design Review Board, which gave the go-ahead on Wednesday.

Several restaurants, a rooftop bar and a garden with public art are planned, a Hemisfair announcement said.

Renderings show Zachry Hospitality’s 200-room hotel in Hemisfair, downtown San Antonio.

Courtesy of Overland Partners

“Together with our community, we will create one of the premier destinations for residents and visitors to the country,” David Zachry, president and CEO of Zachry Corp., said in a statement.

The hotel at 222 S. Alamo St., part of Hilton’s Curio Collection, is slated to open in early 2025 – in time for the NCAA Men’s Final Four Tournament, a deadline set as part of revised agreement between Zachry, the Hemisfair Park Area Redevelopment Corp. .. and the city.

In addition to the hotel and commercial space, the development led by Zachry will include housing and dining spaces. It has been under construction for years.

Long story

The Zachry family has long-standing ties to Hemisfair and HPARC, which is responsible for revitalizing the site.

HB “Pat” Zachry helped bring HemisFair ’68 to San Antonio and soon built the Hilton Palacio del Rio to accommodate its guests.

Renderings show Zachry Hospitality's 200-room hotel in Hemisfair, downtown San Antonio.

Renderings show Zachry Hospitality’s 200-room hotel in Hemisfair, downtown San Antonio.

Courtesy of Overland Partners

His grandson David Zachry served on HPARC’s board of directors from its founding in 2009 until 2011 and pressed state lawmakers in 2013 to circumvent hotel building limits in Hemisfair.

Zachry Corp. and Hunt Construction Group renovated and expanded the Henry B. González Convention Center, the city’s largest capital project. The $325 million project was completed in 2016.

In 2017, Zachry Hospitality beat 10 other bidders with a $200 million proposal for land it would lease on the northwest corner of Hemisfair – a major strip of downtown real estate.

Its location included a 200-room hotel, 385 accommodations, up to 75,000 square feet of retail space, up to 110,000 square feet of office space, and up to 800 parking spaces.

Zachry could lease the land for 97 years. He agreed to pay HPARC about $1.9 million per year for the first two years and $1.45 million per year thereafter, plus a portion of retail tenant revenue.

Renderings of the renovated Aztec Theater in downtown San Antonio.

Renderings of the renovated Aztec Theater in downtown San Antonio.

Courtesy of Overland Partners

This money would be used to help repay the city’s debt of $18 million in certificates of obligation issued for the first phase of Civic Park and to help make Hemisfair financially self-sufficient.

Construction was scheduled to start in 2018 and finish in 2021, but as of the end of last year, Zachry had yet to start building or pay rent due to HPARC.

Officials attributed the delay primarily to the coronavirus pandemic and its effects on funding and demand for offices and hotel rooms. Other reasons cited include the Tercentenary and Final Four activities in 2018, the search for new property developers after the NRP Group exited the project, and the reassessment of underground parking plans.

But as first reported by the San Antonio Heronemail and calendar records show Zachry’s rent payments were in discussion as early as April 2019.

In April, the city council approved a revised agreement with Zachry.

Revised plans

The number of apartments will increase to 525 in two complexes developed by Area Real Estate, a local company led by David Adelman who built the ’68 apartments in Hemisfair, and Austin-based Johnson Trube & Associates.

Renderings of the renovated Aztec Theater in downtown San Antonio.

Renderings of the renovated Aztec Theater in downtown San Antonio.

Courtesy of Overland Partners

Housing will include 87 “workforce” units for residents earning up to 60% and up to 80% of area median income.

The Area Real Estate complex will be built in partnership with Hemisfair Park Public Facilities Corp., which offers a property tax exemption. The developer will pay HPARC what it would owe in property taxes if it weren’t for the PFC, which is $200,000.

Zachry will pay $1.15 million in rent per year and the city will defer payment from HPARC until 2029 when HPARC will repay the city what it owes with interest.

The project was originally slated to receive approximately $1.5 million in fee waivers from the city and San Antonio Water System, but that amount will be reduced to $450,000 just for labor units.

The number of parking spaces will increase to 1,100 and office space has been omitted. There will be approximately 65,000 square feet of retail and restaurant space.

Zachry will foot the bill for a parking garage that the city originally had to pay $59.5 million to build.

The city will pay for up to $8 million in utility infrastructure through a Tax Increase Reinvestment Zone, a mechanism that uses increases in property tax revenue from lands in the city. area for public improvements.

Zachry was originally supposed to cover these utility costs. With the total cost of the project now expected to reach $340 million, TIRZ revenues are expected to rise from $687,000 to nearly $1.2 million.

Under Texas law, the hotel is eligible for a rebate of state occupancy and sales taxes.

These funds will be used to reimburse Zachry for parking fees and public improvements and this reimbursement will last for 10 years. The city will continue to collect its hotel and sales taxes.

The first phase of Civic Park is expected to open in 2023. The park will include a lawn that can accommodate over 10,000 people, water features and a boardwalk.

“While a majority of the built-up area in the Hemisfair neighborhood will be mixed-income residential, one hotel is implementing the strategy that a mix of uses is vital to the long-term sustainability of the Hemisfair neighborhood,” said Andres Andujar, CEO of HPARC. , in a report.

Aztec Theater Renovation

The HDRC also approved plans for a rooftop terrace and bar at the historic downtown Aztec Theater.

The theater owners, a group that includes local restaurateur Sam Panchevre, also want to turn several floors of vacant office space into a boutique hotel.

They have a 40-year lease with Shreem Capital, a Dallas-based investment firm that buys, develops and manages hotels.

They would convert four office floors into around 77 rooms and suites, according to documents submitted to the HDRC. The live music and event venue’s rooftop kitchen, bar and dining area would overlook the River Walk.

The owners of the theater also plan to clean and repair the masonry and cast stone elements as well as the wooden windows.

madison.iszler@express-news.net

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Rozella J. Cook