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     East Side ready to reap rewards from EZ bonds

On April 4, 1988, the 20th anniversary of Martin Luther King Jr.'s assassination, three white men threw a can of white paint onto the King statue at the intersection of New Braunfels Avenue and East Houston Street.

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The Martin Luther King Jr. statue stands in the heart of the East Side. Development has been slow in arriving on this end of town. (Photo by Mark Greenberg)
One of the men fired shots at a motorist who stopped to protest. Shortly afterward, then-District 2 City Councilman Joe Webb, commented that the city was "going backwards instead of progressing forward."

The incident eventually was forgotten, but some East Side residents perceive that there is an implicit economic discrimination that the city's business community has consistently harbored toward their part of town.

In the latest arm-wrestling match over Empowerment Zone bonds - low-interest bonds that are supposed to fund economic development in ailing parts of town - the East Side could lose again.

"Nobody wants to go to the East Side," says Donald Kuyrkendall, a commercial real estate broker who is selling a 7.5-acre tract at the intersection of Houston and Spriggsdale, across the street from SBC Center. "It is too hard to get there, and too hard to get back."

Kuyrkendall, who has conducted business in San Antonio for more than 30 years, says the county and city seriously erred when they paved the Freeman Coliseum and SBC Center parking lots, yet failed to improve drainage in the area around the sports and entertainment venues. He says runoff from those parking lots now will flow onto his property, a former Handy Andy warehouse, which lists for $2.9 million.

Kuyrkendall says he sees the East Side's economic decline as part of the City's concentration on promoting downtown as a tourist destination that will create jobs, albeit many of them low-paying, for local residents.

"There's no push for commerce," he says. "It's all about downtown as an entertainment district."

The 2004-05 City budget proposes to include funds for east and west "downtown corridors," including the ghostly St. Paul Square, but those zones stop well before the heart of the East Side.

Historically, the city has treated the East, South and West Sides of town as economic stepchildren, preferring to demolish entire neighborhoods instead of investing in streets and drainage. In the '60s on the East Side, bulldozers pushed residents back to Cherry Street to make way for HemisFair Park and the Henry B. Gonzalez Convention Center; in the early '90s, the Alamodome took precedence over housing.

The County built the SBC Center to keep the San Antonio Spurs happy (and in town), but the City has torn up Houston Street and blockaded sections of it for utility crews. Neighborhood businesses that were doing brisk business as late as the 1970s have closed, leaving boarded up, rundown structures on many East Side streets.

The San Antonio Housing Authority has built apartments and homes near Commerce Street, and a few other projects are underway, but progress has been slow. Residents living near the SBC Center and St. Philip's College must drive long distances to shop for groceries and other necessities. There are no movie theaters, no bookstores, no coffee shops near the SBC Center. San Antonio residents rush into the neighborhood to watch Spurs games, then they rush out when the final score is tallied.

Despite this doom and gloom, John Vidaurri, the new director of the Community Economic Revitalization Agency Inc., remains optimistic. "The East Side will have a substantial new face by the year 2015. We're interested in neighborhood preservation, and development to create jobs in the neighborhood. We're working with St. Philip's College and doing other things to stimulate efforts to preserve and enhance what's here."

CERA has a goal to identify money sources such as Community Development Block Grants, tax increment reinvestments, and EZ bonds. Since the East Side has been designated an empowerment zone, certain projects are eligible for EZ bonds, which carry a 6 percent interest rate.

The federal government recently allocated up to $230 million in EZ bonds to San Antonio. Up to $130 million of that amount is slated for a proposal to build a convention center headquarters hotel. Rick Drury of Drury Inn & Suites was recently allowed to issue $40 million of the remaining amount to renovate the Aztec Theater and the Alamo Bank Building.

That leaves just $60 million to divvy among Kelly USA, Brooks City Base, the East Side, the West Side, and downtown, all of which are included the city's federal empowerment zone.

So far, no East Side projects are proposed, says Adrian Perez, an economic development specialist with COSA's Economic Development Department. City Council recently appointed 16 residents to serve on an EZ bond oversight committee.

"We're hoping somebody will identify a profit motive and come forward, and we could put EZ funds into their hands," says Perez.

EZ Bonds could play a large part in East Side redevelopment. Investors who plan to invest at least $3 million in areas such as manufacturing, food production, entertainment, hotels, retail, and office space for physicians, dentists and other professions that would serve the community could be funded with EZ Bonds. An empowerment zone also allows tax breaks for businesses hiring at least 35 percent of its employees from within the empowerment zones; other federal income tax credits are available.

An important requirement is that a business must earn at least 50 percent of its total gross income from business activity within the empowerment zone.

The City's Economic Development Director Ramiro Cavazos says the City Council wants to concentrate on small and medium-sized businesses. He says he has met with several people to talk about the potential for using EZ Bonds to spur development.

Ken Lowe, an executive with Lonestar Financial Services Corp., says there has been no leadership to spur economic development on the East Side. "It's a challenge, no question about it. I've been trying to get people in my community to focus on how economics and finance works. How do we keep money in our community? How do we leverage our money in other communities?"

For more information about the city's empowerment zones, visit or call the Economic Development department at 207-8080. •

By Michael Cary

More by Michael Cary



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