Area Real Estate backs out of Hemisfair redev as financing fizzles

Area Real Estate withdrew its plans for a major development in downtown San Antonio after failing to find financing.

The local developer has canceled residential and retail plans that were to be part of Hemisfair’s mixed-use transformation, the San Antonio Express News reported.

At the heart of this downtown San Antonio redevelopment is the 9-acre Civic Park. The nonprofit Hemisfair Park Area Redevelopment Corporation is working with developers to surround the park with apartments, hotels and offices.

Area was scheduled to start work next summer on its project at Hemisfair, the site of the 1968 World’s Fair. But it canceled its lease with the nonprofit because of financing problems, Andres Andujar, CEO of HPARC told the outlet.

San Antonio has strong market fundamentals — population growth, medical centers and a growing university. But high interest rates, tight lending standards and escalating costs can make it difficult for developers to fund projects.

Other Hemisfair developers are facing similar difficulties. Executives at Zachry, Post Lake and Trube have told the city and HPARC that they’ve struggled to finance their projects, resulting in delays and revisions. 

The redevelopment corporation’s plan originally called for 525 apartments near South Alamo and East Market streets, but that was scaled back to 450 units. Trube and Post Lake have trimmed their residential plans dramatically from 29 stories to 10, but construction is slated to begin early next year.

Meanwhile, construction has started on Zachry Hospitality’s 17-story hotel, also part of the Hemisfair redevelopment. The 200-key hotel will offer multiple dining options, including a rooftop restaurant and bar, along with a basement speakeasy, and is expected to open in early 2026, featuring 10,000 square feet of meeting and event space.

With Area Real Estate’s withdrawal from the redevelopment, the HPARC is reassessing plans for the vacant site. 

“We are channeling our creativity into exploring options for park-enhancing developments and working with the city of San Antonio to keep the Hemisfair vision moving forward,” Andujar said.

— Andrew Terrell

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