If approved by the city council, apartments would no longer be allowed east of Packers Street and Niles City Boulevard without a zoning change.

The rule is a response to concerns from Stockyards business groups about a proposed 730-unit apartment complex from San Antonio-based developer Kaori Residential.

The apartments, along with a 50,000 square foot office building, will be built on the site of the old Swift Armour Meat Packing Plant at Packers Street and East Exchange Street.

Business owners said they weren’t opposed to some residential development, but worried about how the size of the project would impact traffic and the Stockyards’ culture.

The number of permits for apartments in the city has gone up 50% in the past five years, according to the city’s Development Services Department. The city approved 685 multifamily permits through July, more than it did in all of 2021.

Despite inspiring the rule change, the Kaori development won’t be impacted by it.

Both phases are already in the city’s development pipeline, meaning they’re grandfathered in with the old zoning rules, a spokesperson for the city’s development services department said.

Still, Kaori’s vice president of development Tyler Sibley told the zoning commission Wednesday the proposed rule would have negative impacts on the Stockyards as a whole.

Residential development is a key component of the live, work and play environment that makes entertainment districts like the Stockyards successful, Sibley said.

Mom and pop businesses in the Stockyards rely on foot traffic from tourists, and residential developments can help those businesses during times when there aren’t as many tourists around, he said.

However, Cheryl West, president of the Stockyards business association, said the Stockyard needs to be protected as a tourist destination.

West argued the district is already facing challenges from tourist traffic on Friday and Saturday nights, and said that adding 1,000 new residents would only exacerbate those issues.

“We’re happy with 4,000 people for a parade or festival, but the residential on top of that would be a nightmare,” West said.

The proposed rule is not a blanket ban on apartments.

Developers can still submit to the city’s rezoning process, but that process requires approval of the city council.

Kaori real estate attorney Tommy Mann expressed skepticism that any apartment projects would be approved by the city given its approach to the proposed rule change.

“Whatever community outreach has occurred here hasn’t included us,” Mann told the zoning commission Wednesday.

Kaori presented several alternatives for a mixed use development after receiving initial push-back on its proposal to make the project entirely residential, he said.

He added that the city was initially receptive to these proposals, but abruptly changed course without explanation.

While the Kaori development won’t be affected by the proposed rule change, Mann said it could still be detrimental to the project.

“It affects our motivation to maintain and operate the property of highest value possible long-term when we know from Day One that the city doesn’t really want us here,” he said.

The city council will take up the proposed rule change at its meeting Dec. 13.