A 1960s-era high-rise behind Hotel Indigo is the latest stop on the city of El Paso’s ongoing Downtown revitalization effort.
Construction to renovate the 13-story structure is set to begin early next year and will transform the tired office building into 80 apartments, as well as coworking, event and retail space. It is one of a clutch of tired Downtown buildings – many historic – being overhauled and guided into the 21st century.
Summit 11 Investments, an El Paso company that was behind the development of Hotel Indigo in 2016, is investing at least $12 million to transform the building at 300 E. Main.
Being among the first investors to take the plunge and build modern housing Downtown makes the project challenging, but Summit 11 says it is confident the market will support high-end apartments.
“The question becomes can our market support this. And we think we are filling a great void we have as a city in terms of Downtown executive living or luxury living,” said Priya Bhakta-Nair, a Summit 11 representative.
The project is named Trinity, and Bhakta-Nair describes it as “luxury Downtown executive living.” They are striving to be a zero-waste developer, she said, and materials for the project will be ethically sourced and eco-friendly. They also plan to incorporate a lot of local art.
The project will include a rooftop “botanical beer garden” and, the developers hope, an organic grocery.
Most of the apartments will be one-bedroom and parking will be available at the parking garage it shares with Hotel Indigo. They expect work to begin early next year and take 12 to 14 months.
Bhakta-Nair said they are working with their tenants, including Workforce Solutions Borderplex, as they prepare to transform the office building into apartments and new office space.
“As I spent more time in Downtown and really started thinking about the building holistically and how it fits into a more dynamic Downtown – and we certainly have an indication of that with Hotel Indigo and many more hotels coming up – I really felt the residential component was so important to capturing the potential Downtown has,” she said.
From 1960 to 2010, the Downtown area, including Segundo Barrio, lost 21,653 residents, according to a 2016 city report, as Interstate 10 was built through the city and Americans nationwide were drawn to new suburban neighborhoods. By 2010, there were only 7,235 people living in Downtown and Segundo Barrio.
For years, some of El Paso’s most beautiful and historic buildings in Downtown sat mostly vacant and crumbling after decades of economic decline in the city’s core. Low rents and property values, combined with the high cost and uncertainty of restoring old buildings, motivated few developers to gamble on them.
But then the historic Plaza Theatre reopened in 2006, followed by the Anson Mills office building, which was restored by El Paso billionaire businessman and philanthropist Paul Foster. In their wake, investors have poured money into Downtown projects, spurred on by local, state and federal tax incentives, as well as public investments by the city, including a new ballpark.
But the development of housing has been slow, and the city estimates there are fewer than 350 modern housing units in Downtown – a tiny number compared to other U.S. cities.
Rafa Arellano, business services coordinator with the city Economic and International Development Department, said the 2016 report made it clear that nurturing a vibrant housing market in Downtown needed to be a priority.
Residents, especially those with higher incomes, “are the people that are going to grow the Downtown economy,” Arellano said.
Ricardo Fernandez, 40, moved Downtown three years ago when the Martin Lofts opened at 215 N. Stanton.
“I love it,” Fernandez said of living Downtown, adding that commuting to work is as easy as crossing the street. He works for global real estate firm CBRE and operates a coworking space.
“My business and work is there,” he said. “I’m a single guy and don’t really need much space.”
When the Martin Lofts opened with 42 apartments in fall 2016, it was among the first new housing Downtown had seen in years, if not decades, and it was viewed as a test of El Pasoans’ appetite for urban living.
“We’ve been essentially full,” said Lane Gaddy, who led investors in the restoration of the historic Martin building.
The project has shown the market for housing Downtown is viable, Gaddy said, and he hoped more housing would follow but “people are not taking the leap we did.”
He said he was excited to learn about Summit 11’s plans.
“It’s just the right project at the right time,” he said.
Rents have crept up in Downtown since the Martin Lofts opened more than three years ago, but much more slowly than other urban centers. And tax incentives remain necessary to make the renovation of tired Downtown buildings viable, Gaddy said.
At its Nov. 12 meeting, City Council approved a package of tax breaks for the Trinity project worth $3.2 million. It includes a partial rebate of property taxes up to $707,000 over 15 years, sales tax rebates on construction materials up to $90,000 and a $2.4 million “city master incentive,” according to a city presentation.
Despite the tax breaks, the city estimates the project will still contribute $2.8 million in property taxes to the coffers of the various taxing entities, including the city, county and school district, over the next 15 years.