TONY MARTINEZ

Oh, for the days when San Antonio's luxury home builders offered such amenities as 40-foot waterfalls and rooms that rotated in homes that didn't yet have buyers.

Today, in a market glutted with million-dollar properties, many high-end custom home builders are trading down to remodeling jobs, small commercial work and a slightly more affordable product: the half-million-dollar home.

Something few builders are doing: putting an empty million-dollar home on the market in hopes of finding a buyer.

“People are doing whatever it takes to survive and pay the bills and create a bridge to when things are better,” said Jack Inselmann, vice president of the U.S. Central Division of housing research company Metrostudy. “It's been a difficult, challenging year.”

Custom builders have been hurt by an abundance of inventory — more than four years of it available in the resale market for million-dollar homes — and the difficulties buyers face trying to get a jumbo mortgage. Prospective luxury buyers are exactly the people who lost the most money in the stock market collapse last year, too.

As a result, the owners of these family businesses known for showy houses have had to get creative.

Jack Uptmore of Uptmore Custom Homes usually participates in the annual Parade of Homes and has built plenty of million-dollar-plus properties.

But he has focused more of his business on building in the $200,000-to-$500,000 market. And in the past year, he's done a muffler shop, pool houses and remodeling work — “any project that creates cash flow,” he said. “I know other builders that have gone into real estate brokerage.”

Adam Sanchez of Diamante Custom Homes sold his last spec home in 2007, and has gone the past two years without building anything before he has a client under contract. As the luxury market has slowed, commercial construction work has grown from 10 percent of his business to about 30 percent.

“We've had to scramble around a little bit just like everybody else,” Sanchez said.

A few years ago, clients would add expensive granite countertops or custom lighting systems to every part of a home without thinking. Today, Sanchez said, that's not the case.

Kyle Lindsey of Kyle Lindsey Custom Homes passed on participating in the Parade of Homes earlier this year, due in part to the fact that his 2008 Parade entry in Cibolo Canyons still is on the market.

“I'll be glad when that person comes through who has the money to back it up,” he said.

Builders say holding a luxury home can cost between $4,000 and $6,000 a month in interest payments.

But Lindsey considers himself one of the fortunate custom builders. He said he has only one such property for sale and has enough work to keep busy through 2010.

“I think that was part of the key to survival,” he said. “I didn't have that inventory on the ground or that monthly overhead expense of upkeep or making those interest payments.”

Don Craighead of Don Craighead Homes has a $1.6 million house and a $1.1 million house on the market in Cibolo Canyons.

He said his father, who used to be in the building business with him, told him that difficult times make him a better person.

“I said, ‘I don't think so,'” Craighead said. “I don't need quite this much stress.”

But with the stock market up, luxury builders say they hope the worst has passed.

Even with 11,000 homes for sale in San Antonio, it's safe to say there's nothing on the market quite like the penthouse at CampStreet Residences.

The former home of arts patron and artist Linda Pace blurs the line between home and art gallery, somehow mixing the elements of a comfortable residence with the vast space needed to house and display a world-class art collection.

Hallways become art galleries, natural light floods the two-story space from every direction and windows frame the best art of all: a 360-degree view of downtown San Antonio.

The only thing missing: a new owner. The two-story penthouse is on the market for $5.7 million.

“One of the things people don't realize is how sophisticated San Antonio is,” said Ann Van Pelt, a real estate agent with the Phyllis Browning Co. and who is listing the property. “They never see spaces like this.”

The loft, in the 100 block of Camp Street just west of South Flores Street, was designed by architect Jim Poteet for Pace, the developer of the CampStreet Residences.

Her investment in the building — and the fact that she also moved in — is widely credited for spurring a revitalization of the entire SoFlo area.

“She wanted to live in a creative environment, and so she built one,” said Julie Hooper of King William Realty. “Creative people followed.”

Pace, who died in 2007, is best known as an heir to the Pace Foods fortune and the founder of ArtPace, a residential program for local, national and international artists.

But she was also a real estate developer ahead of the curve. Pace was among the first to spot the potential of the SoFlo area, which is close to the King William Historic District but has a funky industrial and commercial feel.

“It inspired a lot of people to look hard at the buildings along Flores Street,” said Poteet, whose boutique firm also worked on the renovation of the entire CampStreet building and several other lofts there. “It's a neat, light-industrial corridor with a main street quality to it.”

The CampStreet building was designed by Herff & Jones architects and constructed in 1926 for a candy company. In 1932, Edgar Tobin bought the building and turned it into the headquarters for Tobin Aerial Surveys, the aerial mapping company.

Pace bought the 83,000-square-foot building in 2001 from a partnership that had planned to use it to house switching equipment for telecommunications companies.

Nearby, the city's One Stop Center, headquarters for the Development Services Department, anchors the intersection of Flores and Alamo streets. Some other existing and in-the-works housing developments now include the South End Lofts at 1331 S. Flores St. and the Steel House Lofts at 1401 S. Flores St. and the Judson's Candy Factory Lofts at 831 S. Flores St.

The CampStreet penthouse is one of the most expensive homes for sale in the San Antonio area, and the only listing in the upper echelon that doesn't fit neatly into the traditional category of a single-family home with a yard attached.

But the amenities and custom details are nearly as numerous as Pace's civic contributions.

A Crestron automation system controls everything from the loft's security to televisions, music and lighting. Key cards — or the right person's fingerprints — are required to use the elevators to get to the fifth and sixth floors.

Original concrete floors were resurfaced with ultra-high-gloss white epoxy. The commercial-grade epoxy is similar to what's used in private airplane hangers. And while the floors can be scuffed, they can also be cleaned by a small Zamboni.

Really, the loft comes with its own Zamboni.

Most of the living spaces are on the fifth floor. It has three bedrooms, four full bathrooms and one half-bath, two Fire on Ice fireplaces built with crushed glass, plaster and stainless steel. The master bedroom has his-and-hers bathrooms and a breakfast bar with a Sub-Zero refrigerator.

The kitchen includes a Poliform cabinetry system, two dishwashers, double ovens, two Sub-Zero refrigerators, four freezer drawers, two full-size wine refrigerators, three sinks, an espresso bar, a butler's pantry with silver closet and a large terrazzo kitchen island.

An office off the kitchen operates as a sort of command central for the house, with desks and floor-to-ceiling storage.

The sixth floor was designed as an art gallery, but also has a catering kitchen and a three-bedroom, two-bathroom apartment.

A media gallery has three monumental projection screen displays used for displaying video art. But the screens also could be used to show movies or watch three different TV channels at once.

The loft feels surprisingly inviting for a space with white walls and white floors.

“People don't realize you can have a space as large as this and as modern as it is and have it still be warm,” Van Pelt said. “The first time I saw it I thought it really felt good to be here. It's a space that makes your heart sing. The more I come here, the more I love this space.”

Poteet said the abundance of natural light — pouring through enormous windows and from above thanks to large light wells — warms the space, along with the art collection (the only part of the space that's not for sale). Staircases have glass railings so they don't block the light.

“We went to great lengths to bring in natural light,” said Poteet. “The art and the light warm the space. Because there's such an abundance of natural light, there are no jarring changes and you move around. The light has a balanced quality.”

Because the penthouse was designed for living, entertaining and artwork, one design goal was adding enough interior walls — without interrupting the flow of natural light — to hang a large collection.

On the sixth floor, 18-foot walls can house museum-sized works.

“It's the space to hang art that people who are true collectors long for,” Van Pelt said.

The entire 15,000-plus-square-foot space is lit by museum-quality lighting and interior walls are designed to bear the weight of large works of art. Storage tucked into interior spaces in the loft is secure and climate-controlled for the preservation of artwork.

Although it's a penthouse, the property comes with more outdoor spaces and parking than most traditional homes.

The penthouse's private roof terrace includes landscaping, a small green lawn for a dog and a resistance pool. A multilevel deck has 360-degree views of downtown and is made of Brazilian Ipe wood, which naturally resists rot, decay, insects and mold.

“I think it has the best view of downtown, especially at night, that you could possibly have,” said Poteet. “You see all of San Antonio's best older buildings in front of you. It's really special.”

Hooper called the rooftop a peaceful spot despite its urban location. “You're on an island almost,” said Hooper. “It's very quiet.”

Across the street, ChrisPark is an urban 1-acre park honoring Pace's son. Artpace artist Teresita Fernandez designed the gardens with meandering paths and colorful landscaping.

ChrisPark is open to the public, but has a playground and a dog run just for residents.

“ChrisPark was an asphalt nothing before,” Hooper said. “She was so generous. She did it for all San Antonio and for downtown San Antonio.”

Outdoor spaces

Natural light

Amenities

SoFlo impact

The holiday season has brought more than a little good cheer: It's led to a surge in retail hiring that has shrunk the ranks of the unemployed in San Antonio.

The eight-county area registered a net gain of 2,400 nonfarm jobs in November, dropping the unemployment rate to 6.8 percent from 7 percent a month ago.

The rate is up from 5.2 percent in November 2008, however. San Antonio has lost 6,200 jobs since then, a decline of 0.7 percent.

Statewide, the unemployment rate fell to 8 percent from 8.3 percent in October. Texas added 17,300 jobs last month, after adding 52,300 in October.

It marks the second straight month both San Antonio and Texas have reported declines in unemployment.

The city and state continue to outperform the nation, which posted a 10 percent unemployment rate for November after hitting a 26-year high of 10.2 percent in October.

Locally and across Texas, “It looks very encouraging, with sequential growth,” said Dan Hill, owner of River Walk Search Group, a recruitment firm. “I'm not surprised Texas continues to register a lower unemployment rate (than the nation), and San Antonio relative to the state as well. Services are clearly the backbone of our success in San Antonio.”

Hiring by retailers accounted for 2,200 new jobs in the San Antonio area last month, figures from the Texas Workforce Commission show. The agency attributed the jump to hiring in anticipation of the holiday shopping season.

Historically, November is a strong month for retail hiring. Over the past 20 years, San Antonio has added no fewer than 1,600 jobs in the month. November hiring peaked at 3,600 in 2007 when the economy was more robust, said Veronica Downey, a labor market analyst with the commission.

The improved employment picture wasn't any solace, though, for Ashley Lee, 24, of San Antonio. She was looking for work Friday at the Workforce Solutions Alamo Career Center at 4535 E. Houston St. after an eight-week job with the San Antonio Housing Authority recently ended. She'd been unemployed for a year before that temporary assignment.

“It's hard trying to find a job,” she lamented. “I've probably filled out 20 applications (in the past year). Nobody called back or nobody wanted to work with my schedule.” She has a 6-year-old daughter.

Besides retail, other sectors that added jobs last month in San Antonio include professional and business services with 800 jobs and government with 400.

Those gains were offset by losses in the tourism and hospitality business and in construction. Tourism and hospitality lost 800 jobs last month as the result of seasonal dismissals, the Workforce Commission said, and construction lost 600 jobs.

There was no change in employment in the manufacturing sector, perhaps an encouraging sign given it has shed 4,200 jobs in the past 12 months — the most of any business category in San Antonio.

Local jobless numbers, unlike the state and national figures, are not adjusted to remove the effects of normal seasonal changes.

Year over year, Houston had the biggest drop in employment, losing 88,900 jobs, or 3.4 percent. It was followed by Dallas, which lost 43,900 jobs, or 2.1 percent.

Statewide, the mining and logging, financial activities and hospitality sectors each added at least 4,000 jobs last month.

“What's good about Texas is we are a diverse state,” said labor market analyst Downey. “I think we learned our lesson after the 1980s when we were too dependent on oil.”

The holiday party season in San Antonio was no bell ringer, but it was no party pooper, either.

The party season got busy in recent weeks and has caterers and event planners hoping that business sentiments are brightening. Local business officials said that while a few companies spent more than before, most spent the same or a little less, and still others used the fetes to help the less fortunate.

“Things are generally picking up,” said Wendy Welsh, CEO of Outside the Box Event Productions, which experienced a hefty demand for party planning at the last minute this year.

She said holiday spending may have fallen by double-digit levels this year, but that it was still better than expected.

“San Antonio is doing better than other places. People are still gathering,” said Janet Holliday, CEO and president of the CE Group, an event marketer. “They're just spending less money.”

Holliday said CE did not lose any clients, but clients did cut back on some pricier items.

Officials said fewer open bars and less fine linens were offered and more disc jockeys provided entertainment.

“A big thing is perception,” Holliday said. “If companies had layoffs, they don't want to be seen as throwing around money.”

Employment agency Challenger, Gray & Christmas predicted a slowdown in its annual survey of holiday party spending plans.

That survey showed that 62 percent of the companies were planning parties this year, down from 77 percent last year. More than 28 percent of the companies said they would spend less this year.

Still, some companies are planning to spend at the same levels as previous years.

“We see it as a morale booster,” said Merry Raba, corporate employee services manager for Raba-Kistner Consultants, which did not reduce its holiday party budget.

USAA also kept its holiday party expenses at the same level as recent years. Its Alamodome celebration included a performance by rockers REO Speedwagon, USAA Spokesman Paul Berry said.

“The absence of a holiday party could be seen as a more alarming thing than anything else,” said John Dickson, principal and owner of the Denim Group, a software developer and digital security firm.

Its holiday party cost less not because that was a goal but because it was planned better, Dickson said.

He said his company celebrated with a Casino Night that gave employees more to do and took the focus away from alcohol.

“It came out well,” Dickson said.

And at least one caterer is reporting that business is actually growing. Di-Anna Arias, director of sales for Don Strange of Texas Inc., said December sales were “unbelievable,” with two or three large companies spending heavily on special party features to recognize how difficult the year has been for employees.

Its business could have grown this season by 30 percent, Arias said.

Several companies continued their tradition of using the holidays for charitable purposes.

H-E-B is hosting free Feast of Sharing dinners for Thanksgiving and Christmas in San Antonio and 23 other communities, and volunteers from various departments are helping nonprofit agencies in other ways. Spokeswoman Dya Campos said more people are turning out for the meals.

The Boeing Co. operations in San Antonio have partnered with three nonprofit groups to provide Christmas gifts and food to families and individuals they serve. Spokeswoman Deborah VanNierop said the company has no trouble finding employees willing to support the initiative, which includes buying the gifts.

Valero Energy Corp. also continued its tradition of throwing a holiday party for senior citizens and youths from a local children's home.

“People look forward to volunteering for it,” Valero spokesman Bill Day said.

San Antonio's economy remained among the nation's strongest in the third quarter, a study by the Brookings Institution found.

The Alamo City performed well in employment, housing prices and production output, three of the five indicators Brookings used to track economic performance in the nation's 100 largest metropolitan areas.

San Antonio also had relatively low unemployment and a modest amount of real estate acquired by lenders through foreclosure, the other two indicators Brookings considered in its study.

San Antonio was one of five Texas markets to rank among the 20 strongest-performing metro areas. The others were Austin, Dallas, El Paso and Houston. No Texas cities were among the weakest areas.

San Antonio hasn't been as harmed by the recession as some other areas of the country, said Alan Berube, a co-author of the report and research director for the institution's Metropolitan Policy Program. Such industries as insurance and health care, along with the military and military contracting, have helped San Antonio fend off the recession's effects, he said.

Berube said he had expected to see an increase in employment in the third quarter in San Antonio after the area posted a small decline in the second quarter. Instead, employment fell again, this time 0.3 percent from the second quarter, despite production output rising 1.4 percent.

“In the third quarter, I expected employment to rise and it continued to drop a little bit even though the economy continued to grow,” Berube said. “It's not a huge strike against the region ... but it means the recovery isn't quite as robust in the region yet. It wasn't enough in the third quarter to begin adding jobs.”

But Berube expects an increase in employment this quarter.

Nationally, Brookings called the recovery from the recession “fragile.” It raised the possibility that a recovery could slow or give way to another recession or period of economic stagnation after the effects of the economic stimulus program and the first-time home buyer tax credit begin to recede.