Embassy Suites Riverwalk
Address
San Antonio, TX 78205
Census Tract
48029110100
Poverty Rate
37.5%
Median Income
59.5%
Total Project Cost
$88,000,000
Federal NMTC Financing
$21,500,000
Project Completion
August 2010
Overview
The project is the new construction of a 285-room Embassy Suites Hotel. The building contains 16 floors above ground and two levels of parking, with 166 spaces below ground. The hotel features a 7,000 square foot grand atrium, two restaurants and a 7,500 square foot ballroom.
The subject property has been home to a variety of businesses and structures during the past 100 years. In the late 1880’s to the turn of the century it contained businesses such as a livery stable, carriage house and boarding house. After 1904 a large building containing a bowling alley and laundry was constructed at the corner of Houston Street and Soledad Street. In 1912, the White Star Laundry, which is still in business today in another location, had taken over the entire building.
By the 1960’s, most of the original buildings had been demolished and replaced by a bank building on the north end of the property and parking on the south. The bank building was demolished in the late 1980’s and the entire site has been a parking lot since then.
The surrounding neighborhood has suffered much the same fate. Numerous empty storefronts line the streets surround the property and office space in the area suffers from high vacancy rates. The Embassy Suites Riverwalk will be the anchor of a redevelopment of the Houston St. area which once hosted a thriving retail environment, but now is comprised of empty store fronts, parking lots and graffiti.
Project Financing
UDF provided a $17 million senior loan, $2.25 million junior loan, and a $2.25 million equity investment to the project. The financing includes numerous better rates and terms including a below market interest rate.
Without the subsidy provided by the NMTC program, The Embassy Suites would not have been financed by conventional lenders. With the credit crunch the country is facing, the hospitality industry has been hit especially hard. Financing for hotel projects has all but disappeared. The Embassy Suites Riverwalk is one of very few hotel projects financed nationwide in the last year. The extremely low interest rates as well as equity provided by UDF will allow the project to begin construction and will allow the project to weather any slow business periods without being saddled with high debt service requirements.
Community Impact
The Embassy Suites-San Antonio is located in a census tract that exhibits severe economic distress. The poverty rate is 37.5% and median family income is only 59.5% of the benchmark median family income. It has an unemployment rate of 17%, which is over three times the national average. It is designated by the CDFI Fund as an Economic Development Hot Zone. The property is located within the San Antonio, TX Empowerment Zone as well as an SBA designated HubZone.
The property has historically housed a number of businesses, but it was under-utilized as a parking lot a the time of UDF’s investment. The construction of a full-service hotel on the site created 255 full time jobs and 425 temporary construction jobs for low-income community residents. Due to the nature of the full time jobs created, it is expected that a majority of the jobs will be filled by low- income persons. All of these jobs will provide benefits such as health insur- ance. These jobs also provide the opportunity for job training and advancement within the company providing an opportunity for increased incomes for these low-income individuals.
The hotel also has the potential to affect redevelopment along the River Walk and on Houston Street.
“That corner is an anchor, so I think you’re going to start seeing things happening in the middle,” said Greg Gallaspy, executive director of the Paseo del Rio Association. “With the development efforts along Houston Street, I think the hotel can only be successful. The most important thing, though, is that this is a crucial piece of real estate on the River Walk that will help development back south to Main Plaza.”
The Hotel will also increase the property taxes collected from the property as well as increase the sales and hospitality taxes collected by local and state governments.
