San Antonio Express-News (Sunday)
S.A.’s GrayStreet Partners pivots near Pearl
GrayStreet Partners is working with a different developer and scaling back its plans for Broadway East, its large mixeduse development across Broadway from Pearl that has been marked by setbacks and step backs amid a challenging postpandemic development market.
The San Antonio firm is partnering with Fulcrum Development, another local firm that has built retail and office developments such as Alon Town Centre, Culebra Commons and the Market at Boerne Stage on the city’s North and West sides.
The height and density of the buildings fronting Broadway have been drastically reduced, and it’s unlikely that office space will be part of the project because of difficulty financing it, GrayStreet managing partner Kevin
Covey said. Construction on retail and parking that make up the first phase is expected to begin a year from now and wrap up in 2026, while the timeline for the rest of Broadway East is unclear.
“Phase one is happening,” Covey said.
GrayStreet began buying
land near Pearl for Broadway East in 2014 and eventually amassed more than 20 acres on the east side of Broadway stretching past Austin Street.
The firm planned to partner with Midway, a Houston developer, to build housing, retail, offices,
a hotel and outdoor plazas, and the project was to be built in phases through 2030. GrayStreet sold a sliver of the site to Encore Enterprises Inc., which built an apartment complex.
But in 2021, the firm put much of its land there up for sale — raising questions
about whether Broadway East would come to fruition. GrayStreet’s ambitious plans for some of its other properties, such a W Hotel and office building at Broadway and Newell Avenue, and a mixed-use development at the former
Lone Star Brewery complex south of downtown, have yet to materialize.
Some of the firm’s investors were ready to move on from Broadway East, and a deal with a pension fund fell through during the COVID-19 pandemic, Covey said.
Its attempts to sell drew two lawsuits, including one from its business partner. Midway alleged GrayStreet broke a contract that Midway said gave it the right of first refusal to develop Broadway East. At the same time, Denver-based McWhinney Real Estate Services Inc. alleged that it had a right of first refusal to buy the land. Both lawsuits were later dropped, and Fulcrum bought about 14.6 acres from GrayStreet in 2021.
With the first phase of Broadway East slated to feature 175,000 square feet of retail with parking, Covey said that Fulcrum — the developer behind the Gateway near the South Texas Medical Center — has a track record of developing multilevel retail.
“That’s a big component