Mixed-Use Project Planned at 99-Acre Site in San Antonio

Web Posted Posted: 07/23/07 9:50 AM

Two San Antonio developers have grand mixed-use plans for a 99-acre tract near La Cantera.

Galo Properties and Fulcrum Development have entered a joint venture to develop the southeast corner of Interstate 10 and Loop 1604 -- one of the choicest undeveloped retail corners in the state, and one that had been off the market for two decades until recently.

They're planning two hotels, 1 million square feet of office space, 300,000 square feet of retail space and 1,500 multifamily units in a project that will take seven to 10 years and "many hundreds of millions of dollars" to complete.

The tract had been known as "Regal Hills" because of a retail development that Florida-based Turnberry Associates had planned there, but the new owners will rename it. Turnberry announced its project two years ago as a joint venture with Mexico City-based Galleria Ventures Ltd.

But those plans never took off, and Turnberry sold the tract earlier this month. Deborah Bauer of Drake Commercial Group brokered the transaction.

This is the second mixed-use development announced for the area this year. San Antonio-based Post Oak Development and Ohio-based NRP Group LLC in February broke ground on Cresta Bella, a 400-acre development near Interstate 10 and Camp Bullis Road. That project is expected to include 130 acres of retail and office space, 400 single-family homes and 750 multifamily units.

Galo and Fulcrum are planning the new project as a pedestrian-friendly campus with an urban feel. Residents of the planned apartments and condos could walk just a few minutes to the offices, shops, restaurants, hotel day spa or nightlife.

Phase one of construction is expected to begin in January with two office buildings since that is the piece the area currently is missing, said Walt Busby, president of Galo Properties.

The Shops at La Cantera and The Rim shopping center, which together comprise some 900,000 square feet of retail space, have cornered the market on big retail developments in that area, but they lack an office component, Busby said.

"It will be one of the first true office parks in San Antonio" since the '80s, he said.

In San Antonio, big companies such as Valero Energy Corp. have had to build their own offices because of a lack of predeveloped space for such large office needs. This project will offer build-to-suit space for big corporations, as well as speculative development geared toward smaller companies, he said.

The first two office buildings each are expected to be about six stories high with a combined total of 500,000 square feet. Later office buildings on the property could be as high as 10 stories.

Potential office tenants already have been calling about the site, Busby said, from word-of-mouth tips that the project was happening.

"It's such a high-profile site that we expected that," he said.

The second phase will bring in the hotels: a four-star or better luxury hotel and a limited-service hotel.

Part of the original plans for The Rim included a luxury hotel in addition to its shops and movie theater, but that piece of the plan has yet to fall in place.

Then the third phase of the new project will deal with the multifamily piece, probably for-rent apartment as well as ownership condos. The retail components will be built throughout the various phases. Plans for the retail space likely will include boutique shops and "more intimate and personalized" businesses that will serve the office workers and residents, Busby said.

Galo Properties is one of San Antonio's biggest single-family lot developers and has delivered thousands of lots to national home builders in the past two years.

Fulcrum Development focuses on high-end retail development and is the developer behind the Strand at Huebner Oaks, Stone Oak Plaza and Village on the Green.

The companies are a good match because they "both have the ability to work fast," Busby said.

They were thrilled to acquire the tract, said Steve Braha, a partner with Fulcrum.

The area is known for its affluence and high-end retail so drawing tenants should be a snap, he said.

"To acquire a tract of land of this size, at the last unimproved corner of an intersection as prominent and important as this, presents a development opportunity that is certainly unique in San Antonio," Busby said.