The Brooks Development Authority (BDA) announced Tuesday that it has formally notified BOZ III‑WatersEdge, an entity linked to Dallas‑based Preston Hollow Community Capital, of a default on the lease for the WatersEdge II office tower on San Antonio’s Southeast Side. The notice gives the developer 60 days to cure what BDA says is a violation of the original lease agreement.

Background on the federal lease

Federal documents obtained earlier this month revealed two 15‑year leases worth a total of $51 million for roughly 75,000 square feet of space in WatersEdge II. The leases are intended to house the Office of the Principal Legal Advisor and the Executive Office for Immigration Review, two agencies that conduct immigration‑related legal proceedings and hearings.

According to the documents, the leases cover three of the building’s four floors. The agreements were negotiated directly by Preston Hollow and its brokerage partner, Transwestern, without any involvement from BDA.

BDA’s objection

“Brooks did not negotiate or approve this sublease, and we oppose the proposed use of the property,” a BDA spokesperson said in a statement. “We are taking action to protect the long‑term interests of the Brooks community.”

BDA argues that the use of the building for federal immigration hearings is not permitted under its existing lease with Preston Hollow. The authority has not identified the specific lease clause it believes has been breached, but it maintains that the sub‑lease undermines the community’s interests.

Developer’s response

Preston Hollow disputed BDA’s claims. A company spokesperson said, “We don’t agree with the letter’s contentions, but this action by BDA gives rise to several options and we are considering them.” No further details were provided about how the developer might address the notice.

City involvement

Mayor Gina Ortiz Jones contacted BDA President and CEO Leo Gomez on Oct. 8 to request confirmation of the agreements and to learn more about the federal government’s plans for the property. Gomez clarified that while BDA was not involved in negotiating the leases, the authority was reaching out to Preston Hollow and Transwestern for information.

On Oct. 15, the San Antonio City Council approved a resolution directing city officials to explore ways to prevent or delay the ICE leases, expanding the city’s broader opposition to ICE facilities, including a proposed detention and processing center on the East Side.

Potential next steps

The 60‑day notice does not automatically halt the federal leases. If Preston Hollow does not remedy the alleged breach within the allotted time, BDA said it could pursue further legal action, though no specific remedies were outlined.

ICE currently operates two field offices in the San Antonio area, and the outcome of this dispute could affect how federal immigration services are housed locally.

What residents should know

The dispute centers on whether a private‑sector lease can be sub‑leased to a federal agency without violating the original agreement with the property’s developer. Residents concerned about the presence of ICE offices in their neighborhood should monitor city council meetings and any forthcoming legal filings for updates.

Original reporting: San Antonio Report — read the source article.