San Antonio, the nation’s fastest-growing city, sees downtown rebound

It’s the nation’s seventh most-populous city—and the fastest-growing one. It’s welcoming 66 new residents each day and is on pace to receive 1 million new arrivals in the next 25 years. Downtown, a $57 million, state-of-the art school of data science will soon open, one of a score of pivotal developments reshaping the city’s core.

Few would likely guess that the above refers to San Antonio, Texas, the state’s second-largest city—and one of the U.S.’s least understood. As this capital of Mexican-American culture celebrates its 300th birthday, it also confronts a sizable shift in its character, economy, and ambitions.

“Historically, [San Antonio is] a city that was isolated, small, and didn’t see a lot of growth,” says Ian Caine, an associate professor of architecture and director of the Center for Urban and Regional Planning Research at the University of Texas at San Antonio (UTSA). “You have a city that’s experiencing growth, but it’s not built for that.”

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Caine describes San Antonio as a city of contrasting realities—especially now. Traditionally seen as a sleepy city built on a Spanish colonial grid bisected downtown by the San Antonio River, it’s proudly bicultural, but also significantly segregated, with high rates of poverty. Nationally, it’s best known for the River Walk and the Alamo, tourist draws that have, perhaps, frozen how the city is perceived elsewhere.

But that may be changing as the city’s downtown and surrounding neighborhoods see increasing levels of investment. The redevelopment of The Pearl, a former brewery turned private urban mega-project that billionaire Christopher “Kit” Goldsbury began building out in 2002, gets credit for kickstarting the boom. But San Antonio’s urban revival has picked up significant pace in the last year.

“If there’s a city of opportunity in Texas, it’s San Antonio,” said Graham Weston, another billionaire local real estate investor, in an interview with Texas Monthly. “There aren’t many times in a generation when you can actually build a city.”

Last month, UTSA’s sizable downtown expansion, including a $33 million National Security Collaboration Center and a $57 million School of Data Science that will form a new tech corridor, got a green light from city government and the city’s mayor, Ron Nirenberg.

“Backpacks are an indispensable ingredient for a vibrant core,” says Randy Smith, co-founder and president of Weston Urban, the firm co-founded by Graham Weston. “UTSA’s expansion will bring 15,000 new students downtown.”

Elsewhere, a $9.2 million rehabilitation will turn the historic Alameda Theater into the new home for Texas Public Radio; a new $450 million redevelopment and expansion of Alamo Plaza was approved last week; and part of the Hemisfair, site of the 1968 World’s Fair, will soon reopen as a multi-use development with a park, hotel and eight-story apartment complex called The ’68. The first phase of the San Pedro Creek Culture Park, a new $125 million public space dubbed the “Latino High Line,” opened this spring and adds yet another catalyst for development on the city’s near Westside. The 22-story Frost Tower, a Weston Urban project that opens next summer, is nearby.

All this growth only underscores the city’s binary nature, says Caine. As new buildings go up and residents move in, can the city maintain its essential character, and its affordability and diversity, as neighborhoods are permanently changed?

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A recent report from the Mayor’s Housing Policy Task Force, released last month, highlights the challenges of recent growth. Median home prices have doubled since 2005, while incomes have risen just 40 percent. Half of the city’s renters spend more than a third of their income on rent. “Housing affordability is more than a personal challenge,” the report notes. “It’s one that leads to negative impacts on a community’s economic health and quality of life.”

“When you talk about growth in San Antonio, the opportunities are tremendous,” says Caine. “But the challenges are also tremendous.”

Downtown’s growth is only part of the story

For much of San Antonio’s 300-year history, it was historically isolated, says Caine. The city’s first railroad connection wasn’t open until 1877, making it the last major U.S. city to link up. It was also the last major city in Texas to get a public university, with UTSA opening in 1969.

San Antonio didn’t have the same experience with urban renewal as other cities because it never really industrialized. It’s comparative lack of growth meant downtown didn’t become a “corporatized grid of mirrored-glass skyscrapers,” according to Caine, and instead was able to keep its architectural heritage and charm intact.

“Aside from hotels along the River Walk, our skyline hasn’t changed in years,” says Smith.

San Antonio has instead relied on steady, unspectacular growth, with fewer booms—or busts. It’s a military town, with two major bases nearby and a growing cybersecurity industry, and the city remains a perennial tourism destination, thanks to the River Walk and Alamo. There’s a sizable oil industry because of the Eagle Ford shale, a nearby geologic formation rich in petroleum. And Interstate 35, dubbed the NAFTA Superhighway due to the amount of shipping it facilitates to and from Mexico, cuts right through the center of town.

Like all other Texas cities, San Antonio has benefited from a statewide economic boom, which economist Ed Glaeser attributes to the state’s favorable combination of low regulation, good weather, and cheap housing. In the style of Houston and the Dallas Metroplex, San Antonio has also sprawled outward. While its downtown’s rebirth has been a key story, it hasn’t dampened suburban growth. The city plan released in 2016 recognized 13 separate nodes of development in the greater metro area, and, according to research Caine conducted with Rebecca Walter from the University of Washington, “multifamily housing in San Antonio remains a largely suburban phenomenon, albeit one with a concentrated presence in the rapidly gentrifying downtown area.”

“It’s the portrait of a city that’s both recentralizing and decentralizing,” says Caine. “It’s [misleading to say] that it’s all about the rebirth of downtown. That’s just half the story.”

Boomtown billionaires reshaping San Antonio

The downtown boom benefits, though, from being the portion of the city’s story that’s bankrolled by a pair of billionaires. Weston, the cofounder of cloud computing firm Rackspace, has provided a $15 million donation to UTSA’s expansion plan, and Weston Urban has completed or is working on a number of residential and commercial projects, with a focus on bringing companies, especially in the tech industry, back downtown. Among them is Geekdom, a coworking space, along with a slate of new buildings along the San Pedro Creek, where the company has accumulated several acres. Part of Weston’s vision is to create a San Antonio tech district.

“For years, I watched people leave Rackspace and have to move to another city to get a job,” he told Texas Monthly. “We need to have opportunities for them.”

Weston’s vision owes a lot to the possibilities first created by the investments of Kit Goldbury, a fellow billionaire who made his money with Pace Picante Sauce and who now spearheads The Pearl. Goldbury’s pioneering decision to buy a brewery site abandoned for decades and create a privatized, mixed-use neighborhood from the ground up has been a key driver for commercial and residential projects. (Goldbury’s firm Silver Ventures owns the entire site, streets and infrastructure included, which Caine calls a national model for successful development, which enjoys “the same legal structure as a shopping mall.”)

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Since 2002, more than 300,000 square feet of historic building stock has been repurposed within the site, which now boasts a branch of the Culinary Institute of America; Hotel Emma, an award-winning boutique; extensive multifamily housing; and a food hall, the city’s first. Goldbury compares the project to recreating the city’s historic plazas.

“Authenticity is a big driver in the Pearl,” says David Lake, a founding partner of architecture firm Lake Flato, which oversees the entire district’s design. “If we relied on traditional marketing studies and absorption rates, we wouldn’t have done anything.”

The Pearl’s sizable impact will only grow. The city council recently voted to rezone 7.9 acres around the Pearl for more high-density development, making way for additional offices, apartment, and bars.

The city has encouraged this downtown development with tax incentives. In 2012, the city council created Center City Housing Incentive Policy, or CCHIP, which has given out more than $100 million in loans, fee waivers, and property-tax breaks to developers working within a 36-square-mile area encompassing downtown and surrounding neighborhoods. The program has helped support 64 developments that added 6,810 housing units, 28,000 square feet of office space, and 230,000 square feet of retail space, according to the San Antonio Express News.

In 2016, the city shrank the program’s boundaries to 5.2 square miles, concentrated on the near east and west sides, Southtown, and the Pearl, after complaints the program was fueling gentrification. The forthcoming Arts Residences development, near the River Walk, received $10 million from the program and will sell units that start at $400,000 and may cost as much as $4.5 million.

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Can an ambitious San Antonio help everyone?

The vision of San Antonio being peddled by developers—that of an emerging tech center anchoring a blossoming downtown—runs into hard truths when considered with the the entire city in mind. Building a truly equitable tech district for the whole community means providing pathways for local talent.

“Many people want to expand the high-tech corridor in San Antonio, but it’s a balancing act,” says Caine. “The city has historically low levels of education, making it difficult for tech firms to relocate here.”

San Antonio’s historically Mexican-American Westside exemplifies how the city has, in the past, fallen short when it comes to equity, education, development, and investment. And the widening impact of projects such as the San Pedro Culture Park and The Pearl only put more housing price pressures on these areas.

The Westside, stretches of which have some of the highest poverty rates in the entire metro region, also contains one the country’s greatest collections of Mexican-American architecture. The city was recently named a UNESCO Heritage Site in recognition of its historic missions. That designation has both spurred efforts to develop areas near the new tourist sites and encouraged local preservationists to rally around the city’s still-unprotected historic buildings, some of which pre-date the signing of the U.S. Constitution.

“Part of the value of the UNESCO World Heritage designation includes the ‘intangible heritage’ of people. It’s not the restaurant; it’s the chef,” said William Dupont, director of the Center for Cultural Sustainability at UTSA, to NextCity. “So as the city is looking at that, they’re concurrently taking a look at all of their policies citywide, [recognizing] displacement of the people can now cause loss of economic potential.”

San Antonio stands at a pivotal point, challenged to expand its economy without sacrificing its character or the potential for greater equity. The city has a tradition of producing respected urban policymakers, with two of the last four presidents tapping former San Antonio mayors, Julian Castro and Henry Cisneros, to head the Department of Housing and Urban Development.

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The current Mayor’s Housing Policy Task Force, created last August to address these problems, issued a comprehensive plan to invest more in housing, with the goal of dramatically increasing how much money the city spends on housing—currently $64 million a year—and leverage public-private spending to build nearly 18,700 units over the next 10 years.

The report argues that housing—and affordable workforce housing—should be considered part of the city’s infrastructure and, “like water and energy,” is a cornerstone of the economy, essential to its current functioning and future success.

“City revenues have grown by $210 million in the last five years, and housing has remained a very low priority,” the Mayor’s Housing Policy Task Force report lays out. “As the magnitude of the housing affordability problem in the city has become clearer, it is evident that we do not have a resource problem; we have a priority problem.”