San Antonio Housing Trust acquires portion of Friedrich complex for $68.7M redevelopment

click to enlarge This portion of the Friedrich complex is not included in the lofts project. - PHOTO BY BEN OLIVO / SAN ANTONIO HERON
Photo by Ben Olivo / San Antonio Heron
This portion of the Friedrich complex is not included in the lofts project.
The San Antonio Housing Trust Public Facility Corp. (PFC) recently purchased the bulk of the former Friedrich Air Conditioning Co. complex on East Commerce Street, a major step in the redevelopment of the long-derelict industrial site.

Construction of the $68.7 million Friedrich Lofts is expected to begin in the spring of 2021 and take 22-24 months to complete, said Pete Alanis, the Housing Trust’s executive director. The trust is governed by a board composed of five city council members.

The new complex will be composed of 347 apartments, half of which will be priced at market-rate and the other half for households earning 80% of the area median income (AMI) or less. Of those below-market-rate units, 14 will be reserved for people making 60% AMI or less.

[ Scroll down for a chart showing various AMI levels. ]

The Housing Trust PFC will lease the property to a development partnership that includes the trust, and also developer Provident Realty Advisors of Dallas and capital provider American South Real Estate Fund of Atlanta.

Provident is building the new lofts, while American South is providing $10.9 million in equity. The Housing Trust’s involvement means the development will benefit from a full property tax exemption under state law.

click to enlarge GOOGLE / SAN ANTONIO HERON
Google / San Antonio Heron

The Housing Trust purchased the 4.04 acres from a group headed by developer John Miller of Dallas for $6.31 million on Aug. 7, Alanis said. The purchase was first reported by the San Antonio Business Journal.

Before construction begins, Provident will have to work with the Texas Commission on Environmental Quality on environmental remediation of the site, and with the Texas Historical Commission on the demolition of the old manufacturing plant.

Miller will continue to own the small cluster of buildings on the northeast corner of North Olive and East Commerce, on which the iconic “Friedrich Refrigerators” sign sits, for potential future development.

The project has received mostly praise from the near East Side communities of Dignowity Hill and Denver Heights, San Antonio Express-News columnist Madison Iszler wrote recently. It’s also received some criticism for its pricey rents, especially for those reserved for people making below the area median income.

In a previous interview, Alanis explained the rents at 60% and 80% AMI, or less, exceed the rent limits for below market-rate rents, established by the U.S. Department of Housing and Urban Development for the San Antonio region, in order to make the project work financially. 

“It’s the deal that is going to finally allow this project to proceed, and we’re finally going to have the Friedrich done,” Alanis told the Heron in June. “Otherwise, it just wouldn’t have happened.”

[ For more on how rent limits work, read “Why some subsidized housing is beyond reach for many San Antonians.” ]

In a previous interview, Alanis explained the rents at 60% and 80% AMI, or less, exceed the rent limits for below market-rate rents, established by the U.S. Department of Housing and Urban Development for the San Antonio region, in order to make the project work financially. 

“It’s the deal that is going to finally allow this project to proceed, and we’re finally going to have the Friedrich done,” Alanis told the Heron in June. “Otherwise, it just wouldn’t have happened.”

The San Antonio Heron is a nonprofit news organization dedicated to informing its readers about the changes to downtown and the surrounding communities.

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