Participants Hope Rehabilitation of Historic Seminary Sparks Local Revitalization

Published by Caroline Gallegos on Monday, February 10, 2020
Thumbnail Cover February 2020

St. John’s Pre-seminary High School (St. John’s Seminary) in San Antonio, Texas, is being rehabilitated thanks to historic tax credits (HTCs) and low-income housing tax credits (LIHTCs) and will become The St. John’s Apartments.

The development will provide 228 apartments, 75 percent of which will be available to those who earn between 30 and 60 percent of the area median income (AMI).

St. John’s Seminary was built in 1920 adjacent to Mission Concepción, which was designated a National Historic Landmark in 1970 and is now a part of the San Antonio Missions National Historical Park, which includes Mission Concepción, San José, San Juan and Espada. The park, along with the Alamo, was designated a UNESCO World Heritage Site in 2015.

Mission Concepción, is now the center of an urban San Antonio city neighborhood. Similar to the other four San Antonio missions, Mission Concepción acted as the nucleus of an 18th century frontier community that was based upon a network of irrigation systems that provided dependable water to the area, resulting in a self-sufficient village complex surrounded by year-round productive and protective ranch and farm lands.

The renovation of the development was too costly for the archdiocese to fund without help from a third party and the preservation of the historic buildings and archeological site presented additional problems. Pre-development had been in progress for almost four years, but the rehabilitation wasn’t financially feasible. The developer, Mission DG Ltd., reached out to Novogradac in December 2017 for financial projections for the project. Novogradac also assisted with the HTCs and ensured that everything was in compliance. The financing closed and construction began in July 2018.

“Without the experienced professional team that we finally assembled for the project we would have continued to struggle in closing the project’s financial and legal gaps,” said Mark Tolley, Mission DG partner. “We all succeeded because we shared the same objective of making this unique project a success.”

A Major Project

St. John’s Seminary closed its doors in 1970 and has since been ignored since and has fallen into major disrepair. The property became a site for trespassers, vandalism, animal pests, overgrown vegetation, arson and other problems, almost burning several times–negatively affecting the adjacent neighborhood residents.

Renovations for St. John’s Seminary were straightforward, but the rehabilitation was significantly slowed by the necessity for an archaeological team to be on-site every day to make sure no important historic artifacts were uncovered while digging.

“We had a tremendous scope for environmental concern given the age and nature of the projects,” said Mark Gregg, director of finance at Mission DG, Ltd. “Any type of lead or asbestos was abated as part of the environmental rehab and cleanup. The project borders the fence line of the Mission Concepción that goes back to the 1700s, so if they find something it shuts down the project immediately.”

There are also multiple character-defining features of the building that needed to be carefully preserved, including original stain glass windows, the red brick exterior with white cast stone detailing and the hipped roofs of red clay Spanish tile. In addition to adaptive reuse, the development includes the construction of four new buildings.

“When we got the work, we didn’t know exactly what we were getting into,” said Nick Gettings, CPA, and manager in the Novogradac St. Louis office. “The structuring of the project between the different types of [financing] subsidies and the scattered site were difficult to overcome.”

A Difficult Deal

The St. John’s Seminary buildings were a part of a single diocesan complex that included the Spanish mission that has been an active parish church for three centuries. These significant and intertwined uses created a complicated legal structure for the acquisition of the buildings, but Mission DG LTD was able to enter into a 75-year lease with the archdiocese. Once the long-term lease was in place, the scope of the development required review by the Catholic Church, the Department of Interior, the UNESCO World Heritage Commission, state and local governmental historic agencies and affordable housing agencies.

“It was a complex transaction with many moving pieces, but the development and finance partners worked together to bring the project across the finish line,” said Mike Haynes, managing director at 42 Equity Partners. “We are very proud to be a part of this successful, award-winning development that will add unique, high-quality affordable and market-rate housing to the city of San Antonio.”

While the development faced several challenges that were eventually overcome and the amount of pushback from the local community was a constant challenge, all parties involved hope that this will be the spark needed to ignite a larger rehabilitation of the area.

“Being from San Antonio and participating in the transformation of the historic Catholic Seminary into St. John’s Apartments has held special significance for me,” said Robin Delmer, Monarch Private Capital’s Co-CEO and managing director of acquisitions. “Not only are we preserving history, but also building attractive affordable housing that will stimulate growth and community in the area. Monarch Private Capital admires the dedication of so many involved bringing this initiative to fruition.”

“The St. John’s is a welcome development to the Mission Concepción neighborhood,” said Father David Garcia, former administrator of Mission Concepción parish. “I join the parish members in appreciating the care and respect given to the restoration of the historical buildings and grounds. Thanks to all who made possible this beautiful improvement to the mission compound.”

Looking Ahead

The amount of multi-issue pushback from the local community has been a constant challenge, but everyone involved hopes that this will be the spark needed to ignite a larger rehabilitation and preservation effort for the area.

“The city is in need of affordable housing,” said Henry Cisneros, Mission DG partner. “This residential part of town is San Antonio’s heart and cultural soul, delivering affordable units that help preserve the neighborhood’s heritage while at the same time helping to rejuvenate the entire area for its current residents has been our goal. We hope that other businesses will see the opportunity and build the resources to support up to 400 more residents on The St. John site.”

The St. John represents the catalyst needed for the ongoing redevelopment of this urban neighborhood. Immediately adjacent to The St. John and Mission Concepción, on a 1-acre site, the Archdiocese of San Antonio is beginning the redevelopment of an abandoned school church and classroom building into a World Heritage Site mission pilgrimage chapel and conference center operated by the archdiocese.

The San Antonio Missions have been the historic and cultural center of San Antonio for centuries. The rehabilitation of The St. John not only demonstrates the importance of the use of HTC to fill financial gaps, but also demonstrates the catalytic role that preservation and rehabilitation play in revitalizing and continuing the cultural and historic vibrancy of local neighborhoods.

“We were pleased to be part of the development team,” said Michael Kressig, CPA, and partner at Novogradac. “This was a complicated and challenging deal but all of the transaction parties were dedicated to seeing the project through. It will create much needed affordable housing while also providing an economic boost to the neighborhood.”