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This story was posted about four months ago in the San Antonio Express-News and I forgot to include it in my blog.

City officials say they are pressing a plan to acquire the Friedrich Building, a cavernous structure that’s haunted the East Side for years, renovate it and move the San Antonio Independent School District’s headquarters to the site.

City officials say they are pressing a plan to acquire the Friedrich Building, a cavernous structure that’s haunted the East Side for years, renovate it and move the San Antonio Independent School District’s headquarters to the site.

The preliminary cost estimate for the city is $40 million.

“This would have tremendous significance for the East Side,” said Deputy City Manager Pat DiGiovanni, the deal’s architect.

Under the proposal, the school district would get title to the property. In return, the city would take ownership of the SAISD’s current headquarters at 141 Lavaca St., across Durango Boulevard from HemisFair Park, and several other properties.

If the City Council and SAISD trustees ultimately approve the swap, it would result in hundreds of school district employees moving to the East Commerce Street location, a former refrigerator factory that currently has only a handful of tenants and widely is seen as a deterrent to development in the area.

It also would allow school officials to centralize the district’s administrative offices.

“It looks like the school district needs about 250,000 square feet of space,” DiGiovanni said. “It would be a renovation of most of the building, facade improvements, environmental cleanup, if there’s any needed, and the acquisition itself.”

SAISD Superintendent Robert Durón said trustees wouldn’t take up the proposal until after the district’s $515 million bond election in November.

“We don’t want to mix our message as far as the bond,” he said.

Durón spoke favorably of the potential land swap, which won’t show up as a project in the bond issue.

“We see this as an opportunity to drive even more opportunity into our district. We could consolidate a lot of our central office facilities – we’re pretty spread out,” he said. “If it could work in developing economic development downtown, that certainly benefits the district, too.”

The assessed value of the district’s Lavaca headquarters – housed in a historic building – and the 4-acre site is $6.9 million, according to the Bexar Appraisal District.

Downtown grocery store

One idea under discussion for the site, if the deal’s consummated, is a downtown grocery store – despite serious questions about the viability of such an operation.

“There are no definitive plans, but a grocery store sounds good to me,” DiGiovanni said. “It’s a great site, it’s a great corner. But whether or not it could work for that is up in the air at this point in time.”

Mayor Julián Castro has staked out the placement of a grocery store to cater to downtown residents as one of his center-city development priorities.

Madison Smith, a principal at Overland Partners and president of the HemisFair Park Area Local Government Corp. said the master planning for HemisFair, which starts in October, will extend to the school district’s property. But it also will include other land adjacent to HemisFair in the hopes of influencing future development or design.

Smith said a grocery store is a likely discussion point in any HemisFair conversation.

“The charge is creating a vibrant, mixed-use living, working and playing environment,” Smith said. “You don’t have a living environment without the ability to go get food. I can’t imagine a grocery store not being a part of the conversation.”

Former Mayor Henry Cisneros has been discussing the development of a grocery store with H-E-B officials, city leaders and other potential developers – though he notes there are, for now, too few downtown dwellers to sustain a full-size operation.

“The present base of downtown is about 15,000 people living within a mile of the center of the downtown,” he said. “A substantial, normal-size H-E-B, for example, would require about 30,000.”

He said Charles Butt, chairman and CEO of H-E-B, and his management team “share the goal of wanting to be downtown.” However, an H-E-B spokeswoman declined to comment about the downtown grocery concept.

Cisneros said he’s not a potential investor in such a venture, though he didn’t rule out a future stake.

“At this point at least I’m not in a financially involved role – I’m just doing everything I can as a civic leader to support the process going forward,” he said.

Memo of understanding

SAISD’s board of trustees and the City Council were briefed on the proposed land swap in executive sessions last month; neither took action. DiGiovanni said they’ll both take up a nonbinding memorandum of understanding – which will establish a framework for a land swap – later this month.

Meanwhile, the city is negotiating an option agreement with the Friedrich Building’s owners, a pact that would allow the city to acquire the property within six months. DiGiovanni said the agreement could go to the City Council in October if council members and SAISD trustees support the plan.

Eugene Simor, a partner in the Friedrich Building, declined to comment on the negotiations.

If the deal is OK’d, DiGiovanni said the city could pay for the acquisition and renovation of the building through a combination of sources, including certificates of obligation and tax-increment financing. But the project likely wouldn’t turn up as a line item in the city’s anticipated bond election in 2012.

He said the proposed property shuffle grew out of a series of East Side community meetings, organized by Castro and Councilwoman Ivy Taylor and launched a year ago, to focus economic development efforts in an area that’s seen few new businesses and jobs move in.

“The East Side summit set the direction,” DiGiovanni said. “The community said it wanted the Friedrich Building revitalized.”

The current owners’ plan to turn the abandoned factory floors into retail and office space and residential lofts has gone almost nowhere since they hatched it in 1999.

If the city and school district approve the swap, the existing office tenants will face an uncertain future.

“They have leases, and we’ll have to evaluate the leases and then decide from there what happens,” DiGiovanni said.