Hotel across from Main Plaza gets first OK

Despite city staff’s recommendation to deny it, the Historic and Design Review Commission on Wednesday gave a green light to plans for a 10-story hotel across from Main Plaza downtown — but told developers to keep refining the design, which has drawn criticism.

Austin-based Merritt Development Group and Atlanta-based Peachtree Group want to build and operate the 171-room hotel on an empty lot at 100 N. Main Ave., next to a former office building that’s been converted to an AC Hotel by Marriott and Element by Westin hotel.

City staff had recommended commissioners deny approval, saying the hotel design is “generally inconsistent with the quality and character of downtown San Antonio.” Despite revisions, they were still “concerned with the suburban nature of the design and its orientation which does not adequately respond to Main Plaza.”

They suggested further refining the building’s facade along East Commerce Street, replacing street-level stone cladding with brick, and using window openings similar to those in the area, among other changes.

David Merritt of Merritt Development Group told commissioners he wants to “find common ground” on the design. But he rebuffed the comparison to a suburban property, describing the proposed hotel as “an enduring, high quality, expensive” masonry building. A San Antonio-based restaurant and bakery is interested in leasing space on the ground floor, Merritt added.

Commissioners unanimously gave the go-ahead because, they said, Merritt has been willing to make modifications and plans to keep revising its plan. The developer must come back to the panel for final approval before beginning construction.

The proposal was initially scheduled for consideration in February but postponed after commissioners, the leader of downtown advocacy organization Centro San Antonio and the Conservation Society of San Antonio questioned elements of its architecture, materials and colors.

Centro CEO Trish DeBerry and Kathryn O’Rourke, chair of the organization’s urban planning and development committee, said in a Feb. 19 letter the design “lacks the inspiration that downtown San Antonio deserves.” It is particularly important because of the property’s proximity to Main Plaza, San Fernando Cathedral and the Bexar County Courthouse, they said.

In a letter Tuesday, DeBerry and O’Rourke echoed staff members’ recommendations for continuing to adjust the design.

The hotel is expected to cost $58 million, Merritt has said, and Peachtree would own and operate it.

It would be among multiple hotels in the works or undergoing renovations in the city’s central business district, where the average occupancy rate was 62.1% at the end of 2023, according to real estate analytics firm CoStar. That was higher than the occupancy rate of 61.5% across the metropolitan area.

White Lodging recently finished converting the 251room Marriott Plaza hotel at South Alamo Street and César E. Chávez Boulevard into the 253-room Plaza San Antonio Hotel & Spa. The company also is building a 347-room Kimpton Hotel next door, which is scheduled to be completed in late 2024.

Scarlett Hotel Group and IHG Hotels & Resorts are refashioning the Wyndham San Antonio on East Pecan Street into a 410room luxury InterContinental Hotel, which is also expected to be finished this year. El Tropicano Riverwalk Hotel is under new ownership and slated to be rehabilitated and reopened, and Zachry Hospitality is building a 200room hotel called the Monarch San Antonio at Hemisfair that is anticipated to open in 2026.

Merritt has developed Hampton Inn and Canopy by Hilton hotels in downtown San Antonio and has opened or is constructing hotels in Austin, Chicago, St. Paul, Minn., and Grand Prairie.

It also is working on a Residence Inn hotel near Pearl with Phoenix Development Partners, and a W Hotel and office building at Broadway and Newell Avenue with GrayStreet Partners. GrayStreet executive Kevin Covey has said progress on the mixed-use building has been held up by financing difficulties and declining demand in the wake of the pandemic.

Peachtree has developed, acquired or provided financing for several hotels in San Antonio as well as other cities, it says.

IHG Hotels & Resorts The Merritt Development Group and Peachtree Group want to build a $58 million hotel near Main Plaza. The Historic and Design Review Commission gave its initial approval last week on the condition that the design, criticized by city staff, is refined.