Diego Bernal Wants to Occupy Downtown: Options for addressing vacant property problems

As Heywood Sanders points out in this week’s Cityscrapes column, the vacant building has become almost as much a symbol of downtown San Antonio as the River Walk.

That’s hardly news, but the fact that the City is finally moving to address the problem is.

In his March 7 State of the Center City Luncheon (a $50 ticket affair that will be re-formatted for the less chi-chi at 7 p.m., March 27 at the Woodlawn Theater), District 1 city council member Diego Bernal teased the sold-out crowd with the promise of an empty building initiative, meant to counteract the 33.3 percent of office space that sat unused last year, but said that the solution was still being formulated.

While firmer policy suggestions likely won’t be unveiled until May, I wanted to get a sense of the particular problems that goaded Bernal and comrade-in-arms Lori Houston, director of COSA’s Center City Development Office, into action and the models they and their staff members are currently evaluating.

The problem, in a nutshell: Texas’ enshrinement of property owners’ rights, plus its favoring of relatively low property taxes, creates an environment ripe for real estate speculation. Such investment is not necessarily the evil here, but it does allow for property owners to sit on major buildings and sites for as long as they like without any requirement that they occupy, develop or rent out the space.

“In this state, property rights and property owners are on the top of the pyramid,” said Bernal by phone late last week, “but in this case it’s allowed … people to treat [vacant buildings] like an asset… they’re looking for a payday and they could care less about what it does for Downtown.”

And what does it do for Downtown? As Sanders noted, it first of all diminishes the potential activity by quite a margin. If that 33 percent of office space was occupied, that means many more people walking around, buying lunch, window-shopping, etc… during the day. Converting some of that vacant space into more residential units, another major goal of the so-called “Decade of Downtown,” would provide more activity on nights and weekends. All that buzz would then help to attract retailers, who don’t find our current tourist-centered Downtown mix amenable for businesses like, oh, a grocery store, and the other types of businesses attractive to residents over visitors.

“A vacant building in the Downtown area can usually hurt [our mission] by sending the message that the owner doesn’t care,” said Houston, also reached by phone last Friday. Bernal said, incisively, “It also betrays everything we’re trying to do and everything we say about there being a resurgence of Downtown.”

In the short-term, Bernal and Houston have spearheaded initiatives to occasionally spruce up such spaces, like X Marks the Art, in which artists take over the first floor of some of these vacant Downtown buildings for public installations, and OPEN, which Houston’s office started last year for the holiday season in order to get local retail entrepreneurs into vacant spaces for temporary pop-up shops. There’s also a similar “open house” initiative run by CCDO to turn such empty spaces into “vibrant community hub[s],” that could potentially spark redevelopment interest.

Also, before the empty building plan gets rolling, the CCDO will roll out a renewed marketing campaign for City-owned parking lots, including better signage and an app to help residents and visitors alike find street and garage parking downtown (hallelujah!). That may help ameliorate the parking woes that deter so many locals from hitting up Downtown on their off hours.

But these creative initiatives will only go so far in drawing people downtown; to have a truly vibrant Downtown, vacant buildings must have a more permanent solution.

Bernal hinted that previous attempts to rein in absentee property owners may have been thwarted: “That is against the interest of … a very powerful, well-connected, deep-pocketed, aggressive group,” he said, referring to those with enough cash to purchase the multi-story office buildings, no easy investment even if the property is in disrepair and sold at a fire sale price.

The key to a successful approach, both Bernal and Houston believe, will lie in a variety of tools, some carrots, some sticks and some basic marketing and education. They may not have a lot to go on. As a 2011 Brookings-Rockefeller paper focused on vacant land and abandoned properties pointed out, many metropolitan areas have recently faced similar eyesores blighting redevelopment efforts. “Unfortunately,” wrote paper authors Alan Mallach and Jennifer S. Vey, “weak and antiquated state laws governing tax foreclosure, land banking, code enforcement and other areas make it difficult for local governments to address vacancy and abandonment, and prevent them from unlocking properties’ productive potential.”

Under Texas’ local government code, the only way a municipality can take action on a vacant building is if it can be proved to be dangerous or it hasn’t been properly secured. Governments and authorized organizations can also take buildings that owe five or more years’ worth of back-taxes into receivership.

State law does allow for municipalities to define minimum standards of use and occupancy; however, few Texas cities, including San Antonio, have elected to make more stringent minimum requirements. Our current property maintenance code has a scant sentence dedicated to vacant non-residential buildings, which refers readers back to the City code for buildings, which essentially mimics the State code briefly detailed above. And that’s about it.

Funny enough, if you’re the owner of a one- or two-family dwelling, either unoccupied or occupied, you’re subject to many more regulations in San Antonio, from code compliance to absentee owner registration to the infamous Dangerous Structures Determination Board, which the Current covered extensively in 2010.

Bernal said that the effort to augment the city code will likely require a revisiting of the dangerous buildings and distressed properties code.

COSA may also want to evaluate the City of Dallas’ Downtown Vacant Building Registration Ordinance, which requires owners of such properties located in Dallas’ central business district to register their buildings, pay an annual $75 fee plus an inspection charge of $185 and an additional fee per square foot of the building, in addition to maintaining liability insurance on the property with an annual damage limit of no less than $2 million. There’s also a stipulation that these owners submit a plan to the City covering any necessary code violation corrections, a maintenance plan and a plan for the eventual redevelopment or sale of the building. Every six months, the plan must be updated and re-submitted. The ordinance also raises the typical Class C misdemeanor fine (maximum $500) mandated for code violations to a maximum of $2,000.

It’s not huge, but it’s a start.

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