A historic building at Fort Sam Houston is expected to undergo roughly $40 million in renovations as part of San Antonio’s effort to court a major relocation of jobs from the Defense Health Agency (DHA).
The project has been in the works for years, but local leaders suddenly face mounting pressure to assemble the funding as other jobs look poised to leave.
DHA manages medical enterprise services for the U.S. military around the world and has roughly 130,000 employees across the country, including a headquarters in Falls Church, Va.
Two years ago that gave San Antonio a strategic advantage when the Biden Administration was looking for opportunities to save money, and the Air Force deemed Joint Base San Antonio-Fort Sam Houston its “preferred location” for a DHA consolidation to cheaper digs.
“They were looking for a place where they could get out of high-cost leases, to include Falls Church and Washington, D.C.,” retired Maj. Gen. Juan Ayala, the director of San Antonio’s Office of Military and Veteran Affairs, told San Antonio’s City Council Thursday. “They picked San Antonio … [but] the building at Fort Sam requires major renovation, major modernization.”
Since then, the Trump administration has undergone its own cost saving initiatives, including an Army inefficiency reduction in which preliminary recommendations call for about 200 positions at Fort Sam Houston to move to North Carolina.
The DHA consolidation is expected to bring more than triple that many new jobs to San Antonio, but Ayala said there’s no timeline until funding for the renovation is secured.
And like all economic development negotiations, leaders stress the situation is delicate — particularly when politics are involved.
“Now the Department of War is making some decisions about how best to invest in and protect the country,” Mayor Gina Ortiz Jones said Thursday. “We have to adjust accordingly.”
Preliminary work has already gone into assessing what it will take to convert what’s known as the South Beach Pavilion into a modern office. The historic, four-story building was built in the 1930s and later used as a hospital during WWII.
That location would put the agency near Brooke Army Medical Center (BAMC) — in a city that’s also home to the U.S. Army Institute of Surgical Research and a growing health and bioscience industry.
Plans are already underway to make sure the region capitalizes on other military medical installments and private investments that are expected to follow.
For example, the nonprofit VelocityTX envisions the agency becoming an “anchor tenant” for the seven-acre G.J. Sutton property just a block south of the redeveloped Merchants Ice building.
“This has been a tangible investment. It is something that we’ve committed to,” Ayala told the council Thursday. “Every uniform that comes to our city is a job, … [plus] the folks that come with them … go to school, buy houses, go to grocery stores. These kinds of things infuse millions of dollars in the local economy.”
Despite tight budgets, this year the city and Bexar County put a total of $20 million aside to help accommodate renovations at Fort Sam Houston. On Thursday the council voted unanimously to seek state funding as well, something the county plans to do soon.
DHA did not respond to a request for comment Thursday due to the ongoing government shutdown.
Fresh off a role at the Pentagon, where she was involved in such spending and efficiency conversations, Jones stressed the need for San Antonio to be seen as a team player for the new administration’s goals.
“Having been on the other side of this, it’s about, how do we make sure folks understand we are ready and willing to partner?” she said.
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