Funding Decision Exposes Split Between Downtown Revitalization Entities

Two downtown entities differ on direction of the development of the revitalized downtown. The division between the City of San Angelo’s Downtown Development Commission (DDC) and Downtown San Angelo, Inc. were openly displayed at Tuesday’s City of San Angelo Council meeting.

At issue was the planned opening of Phase II of the plan to develop the Downtown Development District, which includes the hiring of a Dallas consulting company, Catalyst Urban Development LLC. The four-phase plan is officially called the Downtown Master Development plan. All phases of the Downtown Development District project originated in Dec. 2012 when Council approved the general direction of the plan.

Patrick Howard, the City of San Angelo’s Development Services Director, explained that last month the DDC board unanimously approved moving into Phase II and spending up to $60,000 to hire Catalyst to be the City's master downtown developer. Phase I was complete, and was under budget.

In general, what Catalyst will do is birddog, or seek, outside development capital from the private sector to purchase property for development or revitalization of the downtown area. The proposed contract is to pay Catalyst $10,000 per month for six months. In addition, DDC will reward Catalyst a commission of three percent of the purchase price of any deals that Catalyst seals.

Jim Cummings, co-chair of the DDC rose during the public comments section to stress that the DDC intends for downtown development to be open to everyone. He also stressed that there are hundreds of cities competing for investment capital from outside of San Angelo. Cummings said that San Angelo needs someone with the expertise of Catalyst to make sure that San Angelo is competitive.

Downtown San Angelo Inc. Executive Director Del Velasquez followed Cummings to speak to the Council and opposed funding Phase II.

After the meeting, Velasquez said that his opposition to the DDC’s position centered around the strategic decision of the City to sell the City-owned land on the south bank of the Concho River between Irving and Chadbourne Streets to a developer who will build new construction, multi-family units.  With approximately 70 vacant downtown buildings, Velasquez said that the new construction might diminish the value of rehabbing the old buildings and maintaining the character of historic downtown.

As a requirement of winning the Phase II contract, Catalyst is required to be an equity partner in the project on the south bank of the Concho, Velasquez said.

Additionally, Velasquez said that the economic climate has changed since the Downtown Master Development plan was formulated. The oil boom has greatly enhanced investor interest in San Angelo and cold calling capital investors is not necessary; they are calling him. “The City staff, the city itself doesn’t have to take on the financial responsibility of hiring a master developer when the play is [that] they’re interested in San Angelo,” Velasquez told Council.

The alternative vision Velasquez has for the south bank is for a multi-purpose development, including a hotel, restaurants, and places that are more open to public enjoyment. Apartments, he said, minimize public enjoyment of the space.

The land was purchased on behalf of the DDC with a grant from the San Angelo Health Foundation (clarification: The Health Foundation provided a grant to the City to purchase the land). The Foundation’s requirement is that the land must be sold to a developer within a five-year period of time. The clock is ticking.

Both Cummings and Velasquez do not oppose outside investment in San Angelo’s downtown. They differ on what kind of property should be prioritized: New construction or rehabbing old buildings.

Mayor Morrison sided with Velasquez, but stated that he was not only against the apartments, but he was also against outside investors in San Angelo’s downtown.

“As Del said there are 70 vacant buildings in San Angelo. That ought to be our top priority. And if we are not able to get people to invest in these vacant buildings in San Angelo… If we build new buildings and put apartments in them, then these old buildings are going to sit vacant forever. We’ve got to take care of our own buildings first before we begin to build new,” Morrison said.

“We’ve spent $14 million on our river over the last couple of years. [That’s] taxpayer supported money to put trails, lights and art to make a nice, beautiful, unique river for our citizens. I don’t want this river [bank] filled up with apartment buildings, where to walk along the river, you walk into someone’s backyard.”

Differing with both downtown development entities, Morrison railed against outside investment in downtown San Angelo.

“Also the out-of-state developers are looking at us only for the money that they can make. They don’t live here. They don’t shop here. They’re looking at us only for a way to make money. In the last 10 years, our local developers and our local investors have done a tremendous job pumping 10s of millions of dollars into our downtown area. And a downtown area that is now vibrant at night, where 10 years ago when the sun went down all you heard for gunshots.”

“We are taking care of it on our own. Our locals are doing a good job,” Morrison said. “We don’t need people coming here from out of state building apartments on our river.”

Despite Mayor Morrison’s best efforts to defeat Phase II, the Council approved it 5-2.

Council approval is required for the sale of the land and any required rezoning. Citizens still have time to give their input on what kind of development should happen on the south bank for the Concho River in the downtown district.