The McCombs family has bought out the ground lease for a former Holiday Inn downtown that now serves as a homeless shelter, giving it control of the hotel that the late patriarch B.J. “Red” McCombs helped build in preparation for HemisFair ’68.
The family had already owned the 4.5 acres the hotel sits on, at 318 W. César E. Chávez Blvd., in partnership with local families that helped finance the hotel in 1967, said Joe Shields, executive vice president of McCombs Enterprises, the family’s investment arm. It decided to buy out the lease after the former tenant, an entity linked with San Diego hotelier Pacifica Companies, struck a deal with the City of San Antonio in October to sublease it for use as a shelter, he said.
He described that deal, which drew protests from the operators of a child care center across the street, as being one of many factors leading the family to buy the lease — in essence, gaining control of the 313-room, 158,000-square-foot hotel building. Asked whether the family was unhappy with the deal, he said, “Not no, not yes.”
“We wanted to gain control in what happens in the property going forward,” he said. “Obviously, we’re very familiar with the property and with downtown San Antonio generally. … [We are] believers in the growth and future of San Antonio and believe just like my grandfather did in 1967 that it takes risk and investment to continue to develop and improve it.”
The family doesn’t have plans for the site and hasn’t discussed whether it will continue the sublease it to the city when the agreement expires, Shields said. He declined to disclose how much McCombs Enterprises paid for the ground lease.
The purchase comes as the McCombs family is stepping up its investments downtown with plans to convert the landmark Tower Life Building into residences and to build a massive mixed-use development on land it bought last year next to the San Antonio Museum of Art.
“I think at some point in time it’s going to make sense for us to do something on this property, but we truly and honestly have zero plans for what that could be in the future,” Shields said of the former Holiday Inn. “But we wanted to get control of it while we had the opportunity.”
The former tenant was a partnership named P Host San Antonio. State corporate filings and Bexar County property records show that the partnership is managed by an entity named PAC San Antonio Hospitality, which shares an address and executives with Pacifica Companies, an operator of hotels, resorts and apartment complexes across the U.S. A call to Deepak Israni, the company’s president and managing partner, wasn’t returned on Thursday.
In October, City Council voted to let the city enter a lease agreement with P Host, paying it $8.8 million to use the hotel as a “low-barrier” homeless shelter — meaning that residents aren’t required to be sober to stay there — until October 2025, with options for two one-year renewals. The city would also pay SAMMinistries $7.1 million to run the shelter. The building had operated as a shelter at the peak of the COVID pandemic.
In November, the McCombs family bought the shares of some of the co-owners of the land the hotel sits on, property records show. Shields called this “consolidation” of the ownership group but said the family still has land partners.
At 4.5 acres, the hotel property is unusually large for downtown. It sits just east of the crossing of César E. Chávez with Interstate 35, a block from a future path of the San Pedro Creek Culture Park and two blocks from H-E-B’s Arsenal headquarters.
With rumors that local leaders are looking to build a new baseball stadium or Spurs arena downtown, Shields said that hasn’t been on the family’s mind for the site. Last month, the Spurs announced that the McCombs family had joined its investor group — the third time the family had invested in the team since 1973, when Red McCombs was instrumental in moving the Dallas Chaparrals to San Antonio and renaming them the Spurs. He died last year at age 95.
The family has made major investments in the downtown area in recent years. In 2022, it partnered with real estate investors Jon Wiegand and Ed Cross to buy the historic Tower Life Building, one of the most recognizable parts of San Antonio’s skyline. They later unveiled plans to remake the building with condominiums and apartments.
McCombs Enterprises is now working to develop a 5.9-acre plot of land it bought early last year from CPS Energy in north downtown, next to the San Antonio Museum of Art. It has submitted plans to the city to build a 70,000-square-foot office building, a 146-room hotel and two apartment buildings rising to six and thirteen stories, according to the San Antonio Express-News.
Shields said that project is still in the “pre-development” phase and the family is “contemplating what the right team to develop the property looks like.”
“We’re still very early in the stages of figuring out how to move forward,” he said. “We’re still committed to our original vision, which was to create a catalytic mixed-use development, but we’re just too early in the stages to release any plans.”
