Brooks Development Authority Challenges ICE Office Leases at WatersEdge II

The Brooks Development Authority, which oversees the former Air Force base on San Antonio's Southeast Side, has moved to block U.S. Immigration and Customs Enforcement from opening offices in a building there. The authority's board authorized legal counsel to issue a formal notice of default to BOZ III-WatersEdge, an entity tied to Dallas-based Preston Hollow Community Capital, which controls the WatersEdge II office building.

Federal documents earlier revealed two 15-year leases worth $51 million covering 75,000 square feet across three of the building's four floors. The space is expected to house the Office of the Principal Legal Advisor and the Executive Office for Immigration Review, which handle immigration legal proceedings.

Brooks says the use is not permitted under its existing lease and that it did not negotiate the sublease. Preston Hollow disputes the allegations and says it is considering its options. The company has 60 days to address the alleged violation before Brooks could pursue further action. The notice does not immediately halt the federal leases, and the next steps remain unclear.

For developers and lenders, the case highlights how use restrictions in ground and master leases on federal-adjacent property can become a point of dispute after a sublease is signed.