San Antonio Housing Authority to Acquire 120 W Josephine Project
Feature Illustration (above): Aerial perspective of the scale and massing of the proposed Josephine Apartments. Source: San Antonio Housing Authority public records.
by Adolfo Pesquera
San Antonio (Bexar County) — The San Antonio Housing Authority has entered into an agreement with Lynd Company to ensure the availability of affordable apartments in a 259-unit project to be constructed near the Pearl.
First reported last week in the San Antonio Heron, the $58.3 million project will provide 104 units to renters earning 80% of less of the area median income (AMI). An additional 26 units will be set side for renters earning 60% or less of AMI.
The remaining 129 units will lease at market rates.
Architectural concept designs describe a single five-story structure that includes a 340-space parking garage that is wrapped on three sides by apartment units. There is a rooftop swimming pool and a 4,72-square-foot club/fitness center that is adjacent to the uppermost level of parking.
There is a completely enclosed main courtyard at ground level, and a second pool there that has been labeled as an option.
Access to the parking structure would be from West Josephine Street. The leasing center (main entrance) would be at the corner of Euclid Avenue and West Grayson Street.
Unit Sq-Ft Average: 753 SF
Net Rentable Area: 194,968 SF
Leasing Space: 1,398 SF
Amenity Space: 4,720 SF
Mezzanines @ Select Units/Level 5: 2,400 SF
Architectural rendering of the project known as 120 Josephine. Source: SAHA.
Contracts authorizing the partnership took place Aug. 13 at the SAHA Board of Directors meeting. SAHA’s President/CEO David Nisivoccia was given the go-ahead to create the ownership interest, SAHFC Josephine LP LLC; acquire the real estate; and to proceed with the financing.
In addition, the board appointed the San Antonio Housing Facility Corporation, an affiliated entity they control, to serve as the general contractor.
The SAHFC is a Texas public facility corporation, a specialized type of corporation created by the Legislature in 1999. They are commonly used by municipal and county housing authorities and school districts to function as the developer and manager of public facilities.
Under terms of the agreements, the return on the SAHFC’s investment will be provided by:
The greater of 25% of cash flow after debt service or 25% of the tax savings from the property tax exemption.
An annual $25,000 asset management fee.
25% of the net sales value of the transaction when Lynd exits the transaction in year five.
25% of the increase in value for each subsequent sale.
The SAHFC may earn almost $7.8 million over the first five years after the apartment complex is completed.
At that time, the original properties owners were Moonbeam Ventures Ltd. and Sotano Partners Ltd. They created 210 Josephine Investors LP, a special purpose entity that initiated the redevelopment permitting process at the city’s Development Services Department.
As the applicant, 210 Josephine Investors LP requested a zoning change from General Industrial to High Intensity Infill Development Zone to allow for the construction of a 300-unit apartment structure with a height of 95 feet.
The concept site plan submitted to the Zoning Commission by Moonbeam in February 2020.
The project site is about 2.3 acres and has been the headquarters of Marketing Materials, a stone tile custom manufacturer that operated there in a 63,000-square-foot industrial facility.
Although repeatedly referred to in documents as 120 Josephine or 210 Josephine, the site’s actual address has historically been 218 W. Josephine St. and it has frontage with Josephine, East Euclid Avenue and West Grayson Street.
The new zoning was approved in February and shortly thereafter Lynd Company and Fulcrum Development had taken over the project. The agreements between SAHA and Lynd do not mention Fulcrum and it is unlikely that Fulcrum is still involved since their interest in the project would have been as a mixed-use concept; Fulcrum develops retail and office properties.
According to SAHA, “The Project will be constructed pursuant to a construction contract from Josephine Apartments LP to SAHFC and a sub-general contract to Lynd.
“This enables the Project to obtain a sales tax exemption on the materials purchased for the Project. SAHFC will also enter into a development agreement addressing the construction and operation of the Project.”
Designs for this project are subject to the review and approval of the Historic and Design Review Commission. That case is still pending.
VBX Project ID 2020-088B.
The concept site plan for the ground floor, as presented by Lynd Company to SAHA.
Adolfo Pesquera (Reporter/Editor) is a veteran news journalist. He has worked for Hearst Corp., American Lawyer Media, News Corp and Freedom Communications. His work has been published in newspapers and magazines across the USA. He is a journalism graduate of UT-RGV. He writes, edits and creates digital pages for VBX.