Fast-growing Seguin approves deal to bring hotel, restaurants to historic downtown block

The city of Seguin has reached a deal with a developer to enact a plan aimed at enhancing the fast-growing city's urban core while maintaining its historical nature.

Austin-based GroundFloor Development emerged from a process officials began nearly two years ago to redevelop a cluster of city-owned properties as a hotel with new restaurants, bars and events space. The effort comes as rapid population growth is attracting the interest of national brands to Seguin.

"We are an old community with a lot of history and heritage," said Alora Wachholz, Seguin's director of economic development. "A big part of who we are and our identity is based in our downtown. We are proud of that, and we want to make sure that even as we're adding a lot of great nationally branded retailers and service amenities, we don't want to lose who we are and our culture."

The effort began in 2023, when the city acquired the site at 101 E. Nolte St., which includes the historic Nolte National Bank building, three other structures and a parking lot, for $2.5 million. The cluster of properties is across from Central Park and near the Palace Theater, Guadalupe County Courthouse, St. Andrews Church, Park Plaza Hotel and shops and restaurants.

In 2024, Seguin officials began looking for a partner to redevelop the properties while maintaining their historical ties to downtown. The Nolte National Bank building was one of several buildings the Nolte family constructed in 1898, according to materials nominating the area for listing on the National Register of Historic Places. Another building on the site was occupied by a shoemaker and later used as a post office. The date of its construction is unclear, but city maps indicate it had been built by 1885.

On Tuesday, the City Council approved a development agreement with GroundFloor. The contract outlines the terms for transferring the property from the city to the developer. Based on the deal, GroundFloor has the next year and a half to provide design plans, updated financial information, a construction price and proof that the project is funded.

The city and GroundFloor will work together on final deal terms, including a future purchase agreement and possible financial incentives. If the developer reaches each milestone over the next 545 days, the property will be transferred at the same time construction financing closes.

"This project is so much more than a building and one block," Wachholz said. "It's really about reactivating an entire side of our downtown in a way it hasn't had, really, ever."

Breathing new life into the old

The project calls for a 148,000-square-foot hotel with ground-floor restaurants and retail, as well as event spaces. Preliminary estimates put the cost at about $26.5 million.

"We feel it's really important that we take as much from the broader community and input of the stakeholders to bring something you're proud of that's going to survive for many years and be both an attraction for people coming to the city, as well as being an amenity for residents of the city," GroundFloor COO Matt Holley told the City Council in early June.

He said the development group has secured interest from Hilton and Marriott for the planned 100-room boutique hotel the city hopes will spring from the cluster of properties. Plano-based Avion Hospitality, which works with national hotel brands, will oversee hotel operations.

"We're not interested in doing a cookie-cutter hotel where we pick a brand and plop it down there," Holley said. "This is something that is going to be specifically curated for downtown Seguin."

The plan calls for preserving 8,500 square feet of the property's historic structures, including the bank and post office, part of which will host one of the new restaurants and retail space. There also will be an upper-level and ground-level bar, an interior courtyard for events and a ballroom.

The overall project will have an estimated annual impact of nearly $17 million and create 150 jobs, according to early estimates.

GroundFloor expects to begin construction by late 2027 and celebrate a grand opening for the hotel by the third quarter of 2029.

The new hotel could be a draw for Seguin, which has been struggling to retain overnight visitors as a result of Interstate 10 construction. It will provide a new upscale option for travelers, create a new community hub for larger events and elevate the city's food and beverage options.

"Because of the construction, it's been a bit harder to come into Seguin and stay longer than just a day over the last year," Wachholz said. "That's just growing pains, but we looked at the demographic of our visitors and what they need and found that our biggest gaps are nicer hotels, restaurants and having a bigger draw to downtown outside of our key businesses."

Development incentives

To get it all done, the city is considering a custom incentive package that may include absorbing the purchase price of the property, a property tax abatement, economic development and infrastructure grants and state and federal historic tax credits.

"We obviously own the property, and we're definitely using that as a big part of the partnership to heavily discount the property or give (it) at no cost," Wachholz said. "In 2024, the city created a tax increment reinvestment zone around our downtown, which includes the Nolte building, so some dollars are being set aside in an increment fund that may or may not be able to be reinvested in this property."

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Seguin officials have included some safeguards in the agreement in case the plan falls through. If the planned project doesn't move forward in time, the deal can be terminated. If construction doesn't start within two years, the city will revoke the contract. In that case, the city keeps the studies and work product created for the project and retains control of the property.

The city was impressed with GroundFloor's previous work on mixed-use developments, including projects in Garland, a Dallas suburb.

Peter French, who was formerly director of development for San Antonio's GrayStreet Partners, is also involved in the deal. GrayStreet has done several historic property renovation projects across San Antonio.

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