SAN ANTONIO – The City of San Antonio has taken the next step to take over a bar near the Alamo using eminent domain.
City attorneys on Wednesday filed the condemnation petition on behalf of the Texas General Land Office to acquire Moses Rose’s Hideout, officials said in a news release. The city, GLO, and Alamo Trust have a three-way partnership to redevelop Alamo Plaza.
The building, located at 516 E. Houston Street, is in the footprint of a planned Visitors Center and Museum that is a central part of the $400 million plan. Both sides have accused each other of negotiating in bad faith, and a messy legal fight now appears near inevitable.
The City of San Antonio, Alamo Trust, and GLO issued the following statement:
After numerous attempts by Alamo Trust, Inc., the Texas General Land Office, and the City of San Antonio to negotiate a sales price for the property with Mr. Vincent Cantu, the City has taken action to move forward with the eminent domain process. The City filed a condemnation petition after Mr. Cantu’s rejection of the final offer of $5.26 million, well over double the appraised value of his building. A hearing will now be conducted before a court-appointed panel of three Special Commissioners who will assess the value of the property. Even with this process now moving forward, we still remain open to negotiating with Mr. Cantu outside of court proceedings.
The bar’s owner, Vince Cantu, and his attorney, Dan Eldredge Jr., have maintained the city does not actually have the authority to use eminent domain in this instance.
“The City of San Antonio has picked this fight and we intend to fight them back every, single step of the way,” Eldredge said in an emailed statement Wednesday.
Cantu has said he’s open to selling, but he wants to be well-compensated. At one point, he had put his “happy price” at $17 million.
The Alamo Trust says Cantu rejected multiple offers in the past worth up to $3.5 million for his property, which was appraised at $2.1 million currently and $2.8 million in 10 years.
In a 9-2 vote on Jan. 26, the San Antonio City Council approved using the city’s eminent domain power to acquire the property on the GLO’s behalf. The plan, though, was to try to negotiate a deal first.
In February, the city offered $4 million for the property and another $100,000 to move the business into a nearby building the GLO was trying to acquire. Documents Cantu provided show the city also said “additional funding for projected lost revenue will be offered” if he didn’t want to relocate the business.
The stipulation, though, was he had to open his books to a third-party appraiser. The Alamo Trust brought on RSI & Associates, which valued Cantu’s business at $1.26 million.
That valuation appeared to be part of the city’s final Apr. 19 offer of $5.26 million, which Cantu rejected.
He and his lawyer called foul play in an interview on May 2. Eldredge and Cantu said an anonymous source told them that the city, the Texas General Land Office, and Alamo Trust forced RSI to use a discounted portion of the bar’s projected lost revenue. Cantu and Eldredge have filed a lawsuit hoping to get depositions from Alamo Trust and RSI regarding the allegation.
Eldredge said at the time the valuation was “at least $4 million lower than it would have been otherwise.”
However, on Wednesday night after this story was originally published, Cantu sent KSAT an email that claimed that if the net revenue hadn’t been discounted, his business would have been valued at $4.64 million - meaning the final offer should have been $8.64 million.
Asked in a phone interview on Wednesday whether the Alamo Trust had told his company to use a formula that would arrive at a lower number, RSI Senior Appraiser and President Gerald Brown Sr. told KSAT “absolutely not.”
Brown said his company was hired to provide a business valuation, which took projected lost revenue itno accoutn. While the bar’s estimated net revenue before taxes was part of that calculation, he said, they are not the end result and it was not ever what RSI had been asked to present.
He also said in a follow-up interview on Thursday that discounting that estimated revenue is the only way it can be used for a business valuation.
Brown said that during his firm’s interview with Alamo Trust to discuss the proposal before they were hired - RSI asked the Trust to define what they wanted as “lost revenue.” Brown said RSI explained what was included in a fair market business evaluation and that one of the formulas, which they ended up using, uses the future earnings. He says the Trust told him was exactly what they needed to be part of the report.
An email exchange from March that Cantu provided to KSAT and other media shows the Trust’s general counsel telling Eldredge:
“Projected lost revenue was included in the RFP (request for proposal) per your request, and RSI asked ATI (Alamo Trust, Inc.) to provide the scope and definition of projected lost revenue upon engagement. However, ATI defers to RSI’s judgment and expertise in deciding whether and to what extent RSI wants to rely upon your client’s past or projected revenue in preparing the requested business valuation. Therefore, we are moving forward with the Business Valuation Report that is standard to RSI’s consulting services. Please let me know if you would like to discuss further.”
Note: This article has been updated after additional emails and conversations with Gerald Brown and Vince Cantu
You can read the court filing below: