Bid to restore blighted property raises concerns

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SAN ANTONIO (AP) — Randall K. Hoover had been hesitant to put money into the battered Santa Monica Hotel, which he's owned since the late 1990s, because it's located in a sketchy neighborhood.

Though it's a historic district, Cattleman Square on the near West Side is home to many blighted buildings, including the hollowed-out Santa Monica.

Buildings that sit idle until they start to decay are common throughout the downtown area. Many of the structures attract indigents who hang out in front of them — and sometimes make their way inside the buildings.

Soon these properties will be the target of stricter city rules aimed at pressuring their owners to either develop the buildings or clean them up.

But Hoover says making such structures marketable is fraught with difficulties.

"It's not an easy place to say, 'Hey, I want to open up a business over there' — for us to spend hundreds of thousands of dollars and wait 20 years" for the area to improve, he told the San Antonio Express-News (

In recent months, however, he has begun to rethink his building and the area. He sees VIA Metropolitan Transit's West Side Multimodal Transit Center — currently under construction — as a harbinger of the revival of Cattleman Square. The station will include the refurbished Missouri Pacific train depot, which VIA plans to use mainly as administrative offices.

But apart from the area's still-rough character, Hoover says red tape has been another obstacle.

Even a small fix to the three-story Santa Monica Hotel proved cumbersome. It took three months for repairs to the upper windows to be approved by the city's Historic Design and Review Commission.

Now, some owners such as Hoover are concerned about how an impending pilot program, meant to save and revive historic buildings, might impact plans for their properties.

But they're unlikely to find much sympathy.

"My response is: if you can't maintain it, then sell it," said Bill Dupont, director of the Center for Cultural Sustainability at the UTSA School of Architecture, Construction and Planning.

In June, the City Council passed an ordinance that created the 18-month-long program, one that raises the city's standards for the maintenance of vacant buildings. After the 18 months are over, the city could tweak the program, continue it as is or scrap it if it proves ineffective.

"What we're proposing is for the building to look like someone could reasonably move into it," Shanon Shea Miller, the city's historic preservation officer, told council members in May. "The windows are repaired. The doors are repaired. There's no architectural features missing or hanging off the building. So it doesn't look abandoned."

Failure to comply with the higher standards, scheduled to kick in Jan. 1, would cost owners up to $500 per violation. However, structures that already comply with the new requirements could be exempt from the program.

"Nothing that an owner would have to do would be wasted work," Miller said recently. "It is something that would make the building more attractive to a future buyer or renter."

Under the new policy, owners will have to register their buildings with the city and present a plan within 90 days that shows how they are to improve them. People who own single-family homes pay $250 to register, while owners of all other types of buildings pay $750. Failure to register would cost them up to $500 a day in fines.

Owners would be required to display "vacant building" placards, carry insurance and sign a "no trespass affidavit" to allow law enforcement to remove trespassers.

The pilot program would cover empty structures in the downtown and surrounding areas, historic districts, landmarks and buildings near military bases.

To date, the city's office of historic preservation has identified roughly 450 properties the policy would apply to. The areas with the highest levels of vacancy, Miller said, are downtown and the Government Hill and Monticello Park historic districts.

"There's nothing wrong with having a vacant building," she said. "What the ordinance is intending to address is vacant buildings that are presenting a challenge with the property around them."

Some owners of empty buildings are looking to refurbish their properties. Others are just absentee owners.

"This process may help us distinguish from those who really want to make the city better and those who are using either our downtown or our neighborhood as a safe-deposit box," said City Council member Diego Bernal, one of the plan's architects.

Miller said owners who show evidence of work being done on their structures — permits being pulled, for example — could be exempt from certain requirements of the policy or granted extensions. But those exemptions are still being crafted.

The ordinance defines a vacant building as one where activity has ceased for 30 days and is no longer being used for the purpose for which "the structure was built for or intended to be used for."

But in some cases, determining whether a building is vacant isn't clear-cut.

Pfluger Architects is using a one-story commercial building in Government Hill, at 1829 N. New Braunfels Ave., for storage — not what the property was built for.

"It's not vacant," said Kent Niemann, a partner at Pfluger Architects, whose offices are across the street. "It is being used. We're in that building every day. So, yeah, I'm concerned about what they're going to call vacant."

Miller said each building, each situation, will be judged on its own merits. "I just don't know the answers to that without looking at the specifics," she said, referring to the Pfluger Architects' storage facility.

Such distinctions could ultimately pit city policy against property owners.

"The tension here is whether they're keeping a nuisance from happening or preventing a business owner from using their property in a lawful way," said Eddie Bravenec, a lawyer who has represented property owners against the city in "demolition by neglect" cases before, and who is now running for district judge.

"If there's a way the city can allow the property owners to use it in a lawful way while abating that nuisance," he said, "then this can be a win-win."

In the late 1990s, the Centeno family was refurbishing the Santa Monica Hotel, located at 108 N. Medina St., when its financing dried up. Hoover's construction company, the contractor that had built a new lattice for the property, eventually acquired the structure.

A few months ago, Hoover moved his company's officers next to the Santa Monica, renting space at the Avance building. He plans to eventually to turn the former hotel into his company's headquarters.

"We felt the best way to get that building squared away was to get right next to it," Hoover said.

But his efforts haven't gone without headaches.

He and the Historic Design and Review Commission agreed on upper windows that would be made of vinyl. But Hoover and the HDRC have yet to settle on the storefront. One of the sticking points is how to preserve an old Barq's root beer sign painted on the side of the brick building.

"They're going to try to tell us that the downstairs should be all wood," said Hoover, who's put $600,000 into the Santa Monica to date. "They want it to be more historical, and nobody knows what that's going to be yet. So we don't know what we'll be able to afford." Building owners and architects who present applications to the HDRC often share Hoover's concerns.

But his situation raises the question: Will an owner be fined if a building is stuck in a bureaucratic or financing tangle? If progress is being made, but at a slow pace because of the city's own requirements, what will the city's threshold be for extensions?

"It sounds like to me we're going to pay a fine until we're able to lease it," Hoover said.

Property owners can apply for extensions — when rehabilitation or marketing of the building drag out — before they have to register or pay the fee, Miller said.

"The biggest reason why there wasn't a date specified (for the length of an extension) was because there was a lot concern about market dynamics," Miller said. "If average days on the market is X, then we have to be mindful of that and kind of try to be reasonable if people really are trying to market their property."

Getting the extension will depend on whether permits are being pulled or if the property owner is actively marketing the property.

In some cases, buildings are left vacant because there is a planned use for them.

The Southwest School of Art, for example, plans to demolish two one-story commercial buildings that it owns a block north of its downtown campus. Paula Owen, president and CEO of the school, says putting money into the buildings to meet the requirements of a vacant-building ordinance doesn't make sense.

"My only concern is that there will be owners like the Southwest School of Art who would already have plans in place for the demolition of those empty buildings and for development of the property," Owen said.

The same holds true for the former Solo Serve building on Soledad, between Houston and Commerce streets.

Service Lloyds Insurance Company of Austin acquired the massive property through foreclosure in 2009 and currently has a Texas-based buyer under contract.

"Really, we have been waiting for the market to get in position to actually market it and sell it to a buyer and not get hurt," said Cosmo Palmieri, the company's vice president of real estate. "The market is actually getting pretty strong in the downtown area."

In some cases, a building's owner might simply run out of money before refashioning their properties.

"What happens is people lack the capital to invest in their property for whatever reason," UTSA's Dupont said. "Instead of selling it, they let it go."

The blighted 10-story Hedrick Building is at the northwest corner of North St. Mary's and East Martin streets. Owned by San Antonio College Professor B.P. Agrawal, the former San Antonio Real Estate Board Building sits on prime downtown real estate. Agrawal has owned the structure and its 1.441 acres of land since the early 1990s.

"I come from India," he told the Express-News in 2007. "We have buildings in our family that are owned for several generations. Some of the bigger projects require more than 10, 15 years. And there are many examples of that in other cities. So I don't think it has been long."

In 2008, engineer Andres Andujar, currently CEO of the Hemisfair Park Area Redevelopment Corp., conducted a feasibility study for Agrawal.

"Different alternatives were developed for what could happen on that site. But as it is evident, the idea didn't catch," Andujar said. "And so the site remains undeveloped."

Agrawal did not return multiple calls for an interview.

The intent of the program is to prod owners who have sat on their buildings, in some cases, for decades.

HDRC Chairman Tim Cone rejects the notion that the city's historic-preservation rules impede progress.

"There's been a significant amount of successful development that has been completed downtown in historic buildings," Cone said. "What you've got when you buy downtown property is a very unique location that's worth a significant amount of money because of its location and because it's in the heart of a historic area."

If a downtown building is in bad shape, the fault lies solely with the owner.

"Whose fault is that?" Dupont said. "Is it the fault of the HDRC? Well, no. Oh, people say, 'I have to comply with all this stuff to fix this rotten material.' Well, how did this material get rotten in the first place? Because you didn't maintain it."

Just getting vacant buildings to "mothball" status, a term used in the architecture world to refer to securing and rendering a building relatively habitable, is one of the proposal's goals.

The aim is to reinsert these buildings into the fabric of downtown and educate owners of development incentives at the local, state and federal levels — including historic tax credits.

"We have so much potential with vacant buildings right now downtown that is seems to be a shame that we are in such a forward moving redevelopment of downtown that we don't take advantage of the structures that are there," said Sue Ann Pemberton, president of the San Antonio Conservation Society.

To date, the city's office of historic preservation had not yet contacted most of the property owners interviewed for this report.

Miller said they will be given notice before Jan. 1, and will be given 90 days to register.

Because it's a pilot program, Bernal said, it'll have kinks to work out.

"It's going to take some time to get it right," Bernal said. "Along the way, it's important that we make these changes in the community. This city has waited long enough. It's time for us to take action and figure out how to — in a very methodical and deliberate way — how to solve this problem."


Information from: San Antonio Express-News,

Editor's note: This is an AP Member Exchange shared by the San Antonio Express-News.

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